Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs
Issue 8 - Evidence, September 20, 2006 - Afternoon meeting
OTTAWA, Wednesday, September 20, 2006
The Standing Senate Committee on Legal and Constitutional Affairs, to which was referred Bill C-2, providing for conflict of interest rules, restrictions on election financing and measures respecting administrative transparency, oversight and accountability, met this day at 1:49 p.m. to give consideration to the bill.
Senator Donald H. Oliver (Chairman) in the chair.
[English]
The Chairman: Honourable senators, I would like to call this meeting of the Standing Senate Committee on Legal and Constitutional Affairs to order.
We are meeting today to continue our study of Bill C-2, an act providing for conflict of interest rules, restrictions on election financing and measures respecting administrative transparency, oversight and accountability. The bill is more commonly known as the federal accountability act.
As senators, our witnesses and members of the public both here in the room and across Canada on television know, this bill reflects the central portion of the new government's agenda and it is one of the most significant pieces of legislation brought before Parliament in recent years.
The committee is giving the bill very extensive, careful and detailed study. This week we will continue to look at various aspects of the bill, including accountability, ethics, conflict of interest, political financing, the Parliamentary Budget Office and access to information and privacy.
This morning we were considering issues of access to information and privacy, and we are continuing with this theme this afternoon with two panels of different groups. It is therefore a pleasure for me to welcome, from the Canada Foundation for Innovation, Mr. Eliot A. Phillipson, President and Chief Executive Officer; and Suzanne Corbeil, Vice- President, External Relations.
We also have with us this afternoon Mr. Norman Riddell, Executive Director and Chief Executive Officer of the Canadian Millennium Scholarship Foundation; Ken Ritter, Chair of the Board of Directors; and Mr. Jim McLandress, General Counsel, for the Canadian Wheat Board.
Thank you for joining us here today.
[Translation]
I will turn it over to you now and following that, there will be questions and discussion which I have no doubt will be extremely enlightening for Committee members.
[English]
Eliot A. Phillipson, President and Chief Executive Officer, Canada Foundation for Innovation: I want to thank the Standing Senate Committee on Legal and Constitutional Affairs for the opportunity to appear today. This is the nineteenth appearance by the Canada Foundation for Innovation before a committee of Parliament since we were created. It is my third appearance, but my predecessor also appeared before Senate committees.
Nine years into its mandate, the Canada Foundation for Innovation, CFI, has committed $3 billion to 4,700 research infrastructure projects at 128 institutions in 62 municipalities across the country. These investments are made on the basis of a rigorous assessment of merit, using international standards to determine the potential of the project, to increase the capacity of Canadian universities, colleges, research hospitals and non-profit institutions, to compete internationally and to enhance research productivity that will bring benefits to all Canadians.
The Canada Foundation for Innovation is committed to the principle of accountability and, therefore, we are comfortable with the broad objectives of the accountability act. I would note that CFI has always acted within the spirit of the legislation that the act addresses.
By way of background, CFI was created by an Act of Parliament in 1997 as an independent corporation. The funding agreement between the Canada Foundation for Innovation and the Government of Canada, which is approved by Treasury Board, sets out the terms and the conditions under which the CFI must operate. A board of directors that sets strategic objectives in the context of the funding agreement governs the Canada Foundation for Innovation, and it makes the final decisions on the projects that are to be funded, based on a rigorous merit review. As such, our key concern will be to ensure that Bill C-2 does not inadvertently jeopardize the integrity of the merit-based awards system that is fundamental to Canada Foundation for Innovation's mandate. Our particular concern is the current wording of the access act that is to be amended pursuant to Bill C-2, which will create difficulties in dealing with requests for access to the contents of applications and the review records.
Canada Foundation for Innovation has established a highly respected international merit review process that relies on candid opinions from expert reviewers who understand that their identities will be protected. This process represents a long, time-honoured system in research and scholarship and in the evaluation and publication of original research.
The current privacy legislation exempts the disclosure of the identity of reviewers of grants that are made to individuals. However, the CFI's applicants are institutions, not individual researchers. Therefore, we would request that the relevant section of Bill C-2 dealing with the Canada Foundation for Innovation be amended to include two simple words: ``individuals or institutions.'' The Canada Foundation for Innovation has numerous accountability measures already in place and it incorporates the principles of accountability into every facet of its operations. As such, the addition of the accountability act represents no substantial issues for the CFI at this time, other than the one I have mentioned.
From its inception, the board of the Canada Foundation for Innovation has taken prudent measures to ensure sound accountability and governance practices. We have implemented a strong internal control environment to carry out our activities. The controls that we use are widely accepted in the business and the public community, and they are reviewed by external auditors. Furthermore, independent audit firms conduct contribution audits of our funded projects to ensure the proper use of public funds.
The Canada Foundation for Innovation promotes an open and transparent approach to communications with a focus on information sharing, while respecting the privacy of its client institutions and their researchers.
To conclude, the key concern from the perspective of our board of directors is the need to ensure that Bill C-2 does not jeopardize the very nature of the foundation and the principles on which it was created. The foundation governance model, as it exists, has allowed the Canada Foundation for Innovation to be efficient, accountable, transparent and flexible enough to adapt to emerging needs in a highly competitive global research environment.
Norman Riddell, Executive Director and Chief Executive Officer, Canada Millennium Scholarship Foundation: Thank you, Mr. Chairman, for the invitation to present to you this afternoon.
The Canada Millennium Scholarship Foundation supports the objectives of the Accountability Act, which it understands to be enhanced public participation in the development and delivery of programs, enhanced accountability for actions and spending, and more efficient and effective use of public resources. The foundation also believes that accountability is not only a matter of action, but also a matter of perception.
Beginning with the public consultation held in 1998-99, the foundation has consistently gone beyond the reporting requirements of its legislation in order to provide the public with both a detailed account of its operations and with opportunities to become involved in the development and delivery of its programs. Since that time, the foundation has used the endowment it received from Parliament to facilitate access to higher education.
With respect to detailed accounts of the foundation's operations, I would like to draw the attention of senators to the foundation's website, on which you will find a map of Canada. By clicking on that map, you can determine exactly how much foundation money has gone to how many students, by constituency and by educational institution. In other words, 95.5 per cent of the foundation's expenditures since it was created in 1998 are available, on a constantly evolving basis, on a public website at all times.
With respect to opportunities to become involved in the development and delivery of programs, the foundation involves a wide range of citizens in making decisions about who should receive its excellence awards. Public groups have been involved in the development of the foundation's programs, and we are involved in partnerships with universities, colleges, school boards, provincial governments and business associations in the development of our programs.
We believe that one of the most important effects of the proposed legislation will be not really to enhance accountability but to enhance the perception of accountability. It will do so by replacing voluntary transparency on the part of the foundation with legislated transparency. Henceforth, the foundation will not only need to make its actions transparent, it will also need to be in a position to demonstrate that it is prepared to do so in accordance with standards established by an external authority, the Parliament of Canada.
As the government recognized in its discussion paper, meeting the standards established in the proposed legislation will require some effort and will incur some costs. Having a relatively small staff of roughly 40 people, whose energies are focused on delivering more than $340 million of student financial assistance to approximately 120,000 students a year, the foundation has needed to engage the services of consultants to advise it on how best it can meet the requirements of Bill C-2. We are working with the consultant to be in a position to be able to meet the requirements of the government's legislation when it is proclaimed.
One potential area of difficulty may be in meeting the time deadlines established for access to information. You will understand that the foundation, having a very small staff, did not at the beginning develop an archiving system such that we may be able to produce information very rapidly. We have always replied to requests for information, fully giving the requested details, but we have not always been able to do it in 30 days. That said, we will certainly be doing our very best to meet those requirements. We will be discussing with the Information Commissioner how we can obtain extensions if they are necessary.
The foundation is pleased to participate in the government's effort to make it easier for the public and its elected representatives to understand its work of improving access to higher education for all Canadians. The foundation does not consider that the additional requirements for accountability and transparency imposed by the proposed legislation are in any way incompatible with its status as a private government financed charitable foundation at arm's length from government. The foundation has been entrusted with a great deal of the public's money and, like any other foundation that takes money from a donor it must expect to give an account with and their elected representatives.
Ken Ritter, Chair of the Board of Directors, Canadian Wheat Board: Mr. Chairman, I farm in the Kindersley area of west central Saskatchewan. I am now in my third term as the elected representative of farmers in my district.
As an organization we, too, support the intent behind the federal accountability act. However, as I am about to state, I do not think on a common sense argument we belong under the act.
We have requested the opportunity to meet with the Standing Senate Committee on Legal and Constitutional Affairs to discuss the access to information provisions of the federal accountability act, specifically the proposed amendment that has added our organization to the list of entities designated as ``other government agencies'' that are subject to the Access to Information Act.
Simply stated, our position is that the CWB does not belong on the list. The reasons for this position are numerous. First, the CWB is no longer a government agency. In 1998, the structure of the CWB was changed so that it would be governed by an independent board where 10 of the 15 directors are elected by farmers. I have been chair of that board since its inception. The act that created the new CWB specifically states that it is neither an agent of the Crown nor a Crown corporation. The CWB is accountable to farmers of Western Canada who sell their grain through the CWB. Those farmers, not the taxpayers of Canada, pay the corporation's operating costs. We do not possess government information, nor is our information under the control of the Government of Canada.
Second, we already have in place an information policy that gives farmers ready access to the information that they need to evaluate for themselves the value the CWB creates for them. The implementation of this policy was one of the first things we did as a board. It is designed to strike a balance between farmers' need for pertinent information and our need to protect the sensitive information that we gather as one of the world's largest grain marketers.
Just to give a bit of sense of how important this consideration can be, please keep in mind that the CWB markets 18 to 20 million tonnes of grain per year. We have annual sales of over $4 billion and that in markets for commodities like high quality spring wheat and durum wheat we supply as much as 50 per cent to 60 per cent of world trade.
The CWB's information policy, which is posted on our website, states that we will disclose, for example, market performance and delivery related information. At the same time, the policy also clearly lays out the areas where requests for information will be declined, including personal information about farmers and employees and commercially or strategically sensitive matters.
Many producers, however, simply pick up the phone or speak directly to elected directors like me about their concerns. I have access to CWB sales and financial information and I help to set the strategic direction for the organization. It is my job, as a director, to serve as farmers' eyes and ears within the CWB. It is a job that I take seriously, as do my colleagues around the board table.
Adding the CWB to the list of government institutions will not enhance farmers' access to the information they need. What it will do is hamper the independence of the CWB and increase the administrative costs that farmers will be forced to incur. Specifically, subjecting the CWB to the provisions of the Access to Information Act will put it at a disadvantage with its commercial competitors who could gain access to types of information about the CWB that we could not obtain from them. It would also open up sensitive information to access by groups in other countries like the United States who are bent on pursuing a policy of trade harassment toward Prairie grain producers.
Farmers in Western Canada have already spent in excess of $15 million defending themselves against no less than 14 groundless trade actions by the American administration. They hardly need to be subjected to further harassment because of this proposed amendment.
Our preference is that the CWB should not be made subject to the access to information provisions. However, if the CWB is to be made subject to the provisions of the Access to Information Act, then it should be given the same protection provided to four other organizations listed in the proposed section 18.1, namely, Canada Post, Export Development Canada, the Public Sector Pension Investment Board and VIA Rail Canada Inc. Because of the additional protection these agencies will get under the proposed legislation, they do not have to prove that commercially sensitive information that they decline to provide is of ``substantive value'' to their organization. This will help them control the cost of compliance with the legislation and will protect them from having to release bits of information that in aggregate would be prejudicial to them even if the individual requests are not. At the very least, the CWB should be afforded the same protection, although, for the reasons cited above, we maintain that access to information should not apply at all.
In addition, it should be noted that any further requirements placed on an organization like ours, in terms of compliance with access to information regulations, should not be implemented overnight. It will take time for the CWB to ramp up for the compliance. Therefore, a suitable phase-in period should be included in any legislative package that imposes further requirements on our business.
I thank you very much for this opportunity to appear before the committee today. I trust that in the course of your deliberations you will give due consideration to the concerns that I have expressed.
If you have any questions about these issues, I would be glad to answer and offer any clarification that I can. With me is our legal counsel, Jim McLandress, who will assist me in that endeavour.
The Chairman: You said that you have in place at the moment a number of mechanisms so that the public can have access to the CWB. You also have a website. However, you also said there is certain information that you do not want to have to release. You refer to ``commercially strategic matters.'' What is included in a commercially strategic matter?
Mr. Ritter: For instance, it would be our marketing plan for the coming year. When we sell to customers around the world, we obviously have a marketing that includes the sale of the whole crop that farmers have agreed that the CWB will sell for them. hat information were accessible to our competitors, such as the large international grain traders, AWB, or any other competitors we might face, they could utilize it for commercial gain.
As we found out in recent years, we have these commodity fund managers and so forth who utilize grain markets for gain. The information we provide might be useful to them. We feel this is inappropriate. No other competitor does this sort of thing. If we are captured by the provisions of this bill and have to do these kinds of things, it would ensure that our competitiveness would be significantly impaired.
Mr. McLandress, do you have anything to add?
Jim McLandress, General Counsel, Canadian Wheat Board: Like EDC, VIA Rail and the others, the Wheat Board is engaged in significant commercial activities. As Mr. Ritter said with regard to any business sharing what it considers to be business confidential information, any businessman would say, ``That is preposterous. We would not do that.''
That is the situation we are in. We are a major player in the world grain trade, which is highly competitive and highly concentrated. Teeny bits of information can move millions of dollars. Our concern is that we will not be able to add value to farmers if we are placed at a competitive disadvantage. With such a highly competitive industry, any edge is a big edge.
Senator Milne: Mr. Riddell, you spoke of several problems, including meeting the time deadline of 30 days. Do you suggest an amendment in that area, or do you hope that it might be softened a bit in the regulations?
Mr. Riddell: The difficulty occurs because when we collected the information we did not collect it with a view to providing it to some public inquirer within a period of 30 days. As the foundation has been operating for seven years, a good deal of material has been archived in boxes with lists of what is in them. However, they are not complete and we do not have a central filing system.
Therefore, if I received a request for all the contracts the foundation has issued since it was created — who got them, how much money they were for, what they were for and what method I used to award them — it would be difficult for me to reply quickly.
We have received such a request in the past. We replied in detail completely, but it took me several months to get the information.
When the legislation comes into effect I hope we would have some grace in meeting those time limits from the Information Commissioner, understanding that information was collected before the bill was even conceived.
Going forward, we will put foundation mechanisms in place that we believe would enable us to comply with the terms of the legislation and the deadlines provided. In fact, we are preparing now to be able to do that. With respect to what was done seven years ago, I might not be so fast.
Senator Milne: Only the retrospective aspects of this bill give you concern?
Mr. Riddell: Yes: It is not that the legislation is retroactive. According to the lawyers I have consulted, the legislation will affect all the information in my possession. I have the information now and I will be required to produce it. The problem is that I did not prepare to do that seven years ago because I was not subject to this legislation.
Senator Milne: That aspect will negatively affect you for quite some time?
Mr. Riddell: I am not sure for how long. I hope we can get some understanding from the Information Commissioner about the circumstances in which we are operating. We will provide the information. However, we may need a little more time than 30 days. There is a provision in the law already for a 30-day extension. We will probably require at least those 30 days, which means 60 days from the original request, and perhaps a bit more time. If we could be offered that by the Information Commissioner, we would be grateful. Of course, we are willing to explain why we would have difficulty in doing this.
I mentioned that there are costs with respect to implementing this legislation. I have a small staff, and they have plenty to do in providing $340 million of assistance to roughly 120,000 students a year as well as conducting research, managing the foundation's resources and all the other things we do. We will need additional people to do this job, but we must also remember that the money came from the public, from Parliament. We are accountable for it, and we are pleased to provide information on what we are doing. As I mentioned, 95.5 per cent of everything the foundation has spent to date is posted on the website and can be identified by constituency or educational institution. We intend to continue to meet that standard.
Senator Milne: That is good. We heard this morning from Office of the Information Commissioner. Representatives testified that they felt that the access to information provisions of this bill were drafted hastily and not thought through. Do you agree with this assessment in how it has affected you?
Mr. Riddell: First, the foundation is not part of government, so the government is not part of the operations. Therefore, it would have been difficult to take into account the detailed circumstances of the foundation's life in drafting the legislation.
The provisions are reasonable in terms of what is asked. We have nothing that should not be made available to the public. The only problem I perceive is making it available in the timely manner required. Going forward I believe that we will have no difficulty meeting those time restrictions. Looking backward, perhaps we will need a bit of cooperation from the Information Commissioner. I understand that there are provisions that allow the Information Commissioner to give me a bit of flexibility. If the committee and the government in its wisdom see fit to provide for even a bit more flexibility in the first year, perhaps, we would gratefully accept it.
Senator Milne: Do you have Governor-in-Council appointed members on your board?
Mr. Riddell: I do. Six members of the foundation's board are appointed by the Governor-in-Council, including the chair.
Senator Milne: Are they part-time?
Mr. Riddell: Yes.
Senator Milne: Are they paid on an annual basis?
Mr. Riddell: No.
Senator Milne: That removes you from the problems that one of our presenters told us about this morning.
Mr. Riddell: Yes: I consulted the foundation's lawyers because two types of public office-holders are set out in the legislation. They are public office-holders and reporting public office-holders. The restrictions on a reporting public office-holder are significantly more onerous than restrictions on a public office-holder, so it was important for us to understand whether they were public or reporting.
The advice I received from the foundation's legal counsel is that our board members are public office-holders but not reporting public office-holders.
Senator Milne: Mr. Phillips, will you please respond to the same question?
Mr. Phillipson: We have a 15-member board of whom seven, including the chair, are GIC appointments. The other eight are appointed by a group of individuals called the members, who are analogous to the shareholders of a company. The members of our board of directors are not paid. We cover their expenses, and they are eligible to receive a small honorarium, which some accept and some do not.
Senator Milne: Have you asked legal counsel whether they can be classified as reporting public office-holders or just public office-holders?
Mr. Phillipson: We have, and my recollection is that they are classed as public office-holders.
Senator Milne: You are not bothered with that particular issue either.
Mr. Ritter, you have recommended that we delete clause 165, which amends Schedule 1 of the act. That is on page 126 of this act. Under ``Other Government Institutions,'' Canadian Wheat Board is added to the act.
You want that either to be deleted or that the Canadian Wheat Board be added to clause 147 on page 119 as the fifth entity?
Mr. Ritter: Yes, with the Export Development Corporation, VIA Rail and so forth.
Senator Milne: We heard from a group this morning that also feel they should be included in section 147. That makes you number six on the list, for some of the same reasons that you have spoken about, namely, releasing confidential information. It seems to me that there are two issues, because your situation is quite different. You say that you are no longer a government agency, even though the government appoints people to your board.
Mr. Ritter: That is right.
Senator Milne: Some are appointed; some are elected. I will ask you the same question about your board members in a minute, but you are completely separate from the government in that you receive no public funding. Is that correct?
Mr. Ritter: We do not receive any public funding. However, we have a federal guarantee for some of our borrowings.
Senator Milne: That is where it comes in.
Mr. Ritter: But our act, senator, specifically states that.
Senator Milne: That is right, you are neither an agent of the Crown nor a Crown corporation, and you are accountable to the farmers of Western Canada who sell their grain through your offices.
I am not sure how we should deal with this matter because the Canadian Wheat Board is another completely different kind of entity that is being grouped with various reporting groups, and reporting public office-holders as well.
Are your board members reporting public office-holders?
Mr. Ritter: No, they are not.
Senator Milne: Your legal advice here says that they are not reporting.
Mr. McLandress: They are part time. It sounds similar to the millennium foundation. They are part-time Governor- in-Council appointees.
Senator Milne: Are they paid on a yearly basis?
Mr. Ritter: No, senator. They are given a retainer, the same as any other director, and then a per diem. That is how we pay all our directors. They are no different from the other directors. All directors have the same status. We are governed by best practices that we view in the corporate world, and directors do not report to Parliament. We have a fiduciary duty to CWB and that is how we function, as would any other publicly traded corporation in this country.
Senator Milne: I do not imagine you were here this morning when the representative of the Information Commissioner appeared before us. Their office strongly recommended that proposed section 147 be removed from this act because it becomes too restrictive and allows government, government boards and government agencies to keep too much private for too long. In fact, the representatives contended that, under the new provisions of this act, information that should be eventually released to the public could be kept indefinitely — that is, more than just 15 years, 5 years or 20 years, indefinitely — under the provisions of this act. Do any of you agree? The floor is open.
Mr. Ritter: There are a number of differences in our organization. First, the money the CWB uses, or has used, comes from the marketplace. It is farmers' money. Once in a blue moon, like once in 15 years, there may be a call on the government guarantees because of market conditions, which would work out to a de minimus little number like one cent a bushel or two cents a bushel over that whole term. The huge amount of money that we deal with comes from the marketplace. We are a commercial organization, in competition with other commercial organizations from around the world. Accordingly, to have us open to access to information when they are not would put us at a competitive disadvantage.
Senator Milne: You want to keep your strategy secret?
Mr. Ritter: Absolutely. They keep theirs secret. They certainly do.
Senator Milne: They certainly do, yes. To all three of you, are you afraid that if Bill C-2 passes and you attempt to refuse disclosure order under proposed section 18(b) of this bill that competitors or individuals will tie up your organizations in court in an effort to force you to release sensitive information? Perhaps this question is mainly for the representatives from the Canadian Wheat Board, but I would like to hear from the other two groups as well.
Mr. McLandress: At the risk of sounding cynical, if I were them, I would do it. It is business. It is fierce competition, and in many ways they would be foolish not to try.
Senator Milne: They will not be shy in trying it.
Mr. McLandress: Certainly not. It is a highly competitive business; I would expect them to do it. It would become part of our business. My department would get a little bigger. I do not want a bigger department.
Senator Milne: The farmers would get a little poorer, too.
Mr. Ritter: That is right. We do our best to find out what our competitors are selling their grain for, but we do not have a tool like this Access to Information Act to find that out. We find out more general information rather than specific details of any sales. From the customer's point of view, it is like buying a car. I do not want my dealer to tell everyone what I paid for my car, largely because I would probably get taken on it. That information is viewed in the commercial world as confidential. Also, my dealer has never told me what he sold a similar car to my neighbour for. That is the reality of how business is done. Customers would feel jeopardized and harmed if that information were released through us.
Mr. Riddell: The business of the Canada Millennium Scholarship Foundation is significantly different from that of the Canadian Wheat Board.
Senator Milne: That is why I directed my commercial questions to Mr. Ritter.
Mr. Riddell: First, almost all our money comes from government. We have had donations from private companies, but they were relatively small compared to the $2.5 billion we received from the Government of Canada.
Second, the information that we hold at the foundation is largely information on individuals. As such, it is protected by the privacy legislation. I hold information with respect to family incomes, students' need, and the amount of financial assistance students receive. If they were not protected by privacy legislation, I would be here expressing concerns about being required to hand over that kind of information. That simply is not being proposed here. That information is protected by law, so the information I have is not normally of a sort that we would be expected to divulge.
Third, unfortunately I do not have any competitors. I would be happy to have competitors to help students, because students do not get enough from me. If they could get more from someone else, I would be delighted.
Senator Milne: More power to them. Mr. Phillipson, and the Canada Foundation for Innovation, you do hold confidential information. You have some commercial applications.
Mr. Phillipson: No, senator. Our funding, like the millennium scholarship foundation, comes from government. When we award a grant for infrastructure to a university or college, we are allowed to provide up to 40 per cent of the capital. It is up to the institution to get the other 60 per cent.
Senator Milne: They then own the information?
Mr. Phillipson: Often they receive funding from a private sector partner, but that information as to where the total funding comes from must be divulged to us before we disburse our funds because we must be comfortable that they have the other 60 per cent. That information is public.
Every grant that we award is public. It is on our website, in a user-friendly fashion, so that people do not even have to write if they do not wish to do so.
Senator Milne: I realize that, but then the information that this research leads to is then owned by the person who does the research or the institution under which they do it?
Mr. Phillipson: Yes.
Senator Milne: You do not get feedback on that research whatsoever?
Mr. Phillipson: That is right. We do not own the research activity. Of course, the research usually becomes public because most researchers like to publish their work.
Senator Milne: As long as it is funded by a public institution, but if it is funded partially by a private company, that is a different matter.
Mr. Phillipson: There are good guidelines and rules in place at universities.
This is really beyond our jurisdiction what restrictions private sector partners can place on the publication and the release.
Senator Milne: There have been court cases over it.
Mr. Phillipson: Absolutely. The essence of our operation is the merit-review system. We award grants based on merit and we use about 1,000 experts around the world. We have peer review. The actual reviews of the content are sent to each of the applicants following the adjudication. We do not wait for them to ask. What we do not provide are the names of the reviewers, and that is a time-honoured mechanism in the academic and research system.
That was understood in the privacy and access legislation because it indicated that grants made to individuals are exempt, but our grants are made to institutions, not to individual researchers. That is why I have indicated the addition of two words, ``and institutions.'' We should be allowed to withhold the identity of the reviewer, as we currently do. Without that confidentiality we would either not have the 1,000 expert reviewers or, of even greater concern, that they would be less than candid in their reviews, knowing that their identity will be made known to the applicants.
Senator Milne: Do you mean to their peers?
Mr. Phillipson: Exactly.
Senator Joyal: What distinguishes your situation from that of the Canada Council for the Arts? The Canada Council for the Arts grants to individual artists and individual institutions, like the Toronto Symphony Orchestra or the Nova Scotia Museum or the Winnipeg Art Gallery, there are thousands of them.
The various Canadian research councils give grants to individuals and sometimes to institutions on the basis of merit, of peer review. What distinguishes your status from the other institutions?
Mr. Phillipson: I cannot speak about the Canada Council of the Arts; I am not sufficiently familiar with its modus operandi. However the three research-granting councils, the social sciences and humanities, natural sciences and engineering, and Canadian institutes of health research, make their grants available to individuals. It may be one individual or a group, but they are the ones to whom the grants are awarded.
Our applicants are the institutions, with researchers behind the grant, and we have to know who they are and their research records. However, the official applicants are the institutions and the exemption currently is for grants made to individuals. Therefore the three granting councils are exempt. In other words, they do not have to divulge the identity of the reviewers. They do have to provide the content of the review, and they all do it without being asked.
Senator Joyal: It would be worthwhile to know how the Canada Council for the Arts operates, because it gives to museums, orchestras, and opera houses; I can name many.
Mr. Phillipson: If it is made on the basis of a merit-review system using experts, then I would assume it is similar, but I do not have that information.
Senator Joyal: Could you inquire and come back to us with more information? It would be helpful to know of a parallel body that received its money from the government. Our chair is involved in the Art Gallery of Nova Scotia, as I recall.
Sometimes a museum applies for a budget, and has to provide fundraising from private sources and government- matching scenarios, and there are double sources of financing which puts the institution in competition with other museums and so on. It would be helpful for us to understand your case as it is distinguished from other cases.
The Chairman: Perhaps you could send a reply to the clerk of the committee.
Senator Zimmer: If I could just add to that, as the past President of the Royal Winnipeg Ballet, one of the things we protected very carefully were the donors and any information on donations. I can sympathize with your situation because it is a competitive world now, especially since governments cannot fund all of these organizations anymore, so there is more private fundraising going on. We protected our donors' information and the amounts that they gave.
Mr. Phillipson: It is important to distinguish us from the Canadian Wheat Board where their concern, which I can understand, is one of competition. We are not concerned about the competition getting access to our reviewers, but we are concerned that the reviewers will not give us a frank opinion of an application if they know that their identities will be made known to their colleagues around the world.
Senator Cowan: Dr. Phillipson, I have a question with respect to the amendments that you are proposing on the first page of the brief of Canada Foundation for Innovation. You request that the relevant sections of Bill C-2 be amended. I could not find those quickly; are you able to give us a reference?
Mr. Phillipson: I would have to provide that to you.
Senator Cochrane: I have a question for Mr. Riddell, from the Millennium Scholarship Foundation. If you spoke to this in your address I apologize, but I read recently that the Canada Millennium Scholarship Foundation has used the services of consultants to understand how this proposed legislation will affect it, and to propose systems that will permit the foundation to meet the requirements of Bill C-2. Have you been able to determine how this proposed legislation will affect you? If so, could you indicate how long you think you will need in order to comply with this proposed legislation.
Mr. Riddell: We engaged the services of Consulting and Audit Canada to advise the foundation on procedures and systems we would need to put in place. They analyzed the legislation for us, as did our lawyers, and we came up with a list of things we need to do.
We have subsequently hired another consultant who is working for other government departments to assist us. In other words, I am assuming that this will become law sooner rather than later, and we are taking all the steps necessary so that when the law is put into force we will be able to comply with every detail of it. We are building the systems so we will be able to comply.
Senator Cochrane: Tell me about your auditing. Do you have the Auditor General come in and audit everything that you do? Does the Auditor General come in and look at the whole of the foundation?
Mr. Riddell: When we received the money from the Government of Canada the operations of the foundation were not subject to audit by the Auditor General of Canada. Her audit was completed when she determined that the money has passed correctly from the Government of Canada to the foundation.
The foundation is not part of the Government of Canada. It is an independent and arm's-length body. The previous government, in its budget in 2005, amended legislation which allowed the Auditor General to conduct program audits of the foundation and the Auditor General is currently at the foundation conducting a performance audit. She is conducting that audit as part of a general audit of the federal government's activities in supporting students in such a way that their access is enhanced or made more equitable. She is primarily looking at the controls that the foundation has in place to ensure that the roughly $350 million that we pay to students each year is paid according to the legislation under which we operate and under the policies established by both the Government of Canada and the board.
Senator Cochrane: How often will she come? Will she come every year?
Mr. Riddell: No, she will not come every year. Under the legislation in which she is coming, that is not what the government of the day proposed. She is there and she is able to come and look at what we do. We are audited annually by our own auditors. They are appointed by the members of the foundation, so there is an external auditor appointed by the members of the foundation. There is also an internal auditor who is appointed by the board who conducts internal audits which are available to the external audit. The financial statements of the foundation, together with the report of the auditor, are made available in the foundation's annual report each year.
Senator Cochrane: When were you established?
Mr. Riddell: We were established in 1998, in preparation for Canada's celebration of the new millennium. The money was transferred to the foundation in late summer of 1998. We began operations after having conducted public consultations on how the money should be used at the end of 1999.
Senator Comeau: As I understand, Mr. Phillipson, the CFI funds projects in order to prepare universities and other research institutions to better conduct research projects. I understand the research project is not the end to a means; it is the research itself that is being sought, is it?
Mr. Phillipson: Our mandate is to fund the infrastructure, which includes equipment, facilities, laboratories, databases and computing equipment. We fund only the infrastructure. The operating costs to actually do the research have to be funded from other sources, such as the three granting councils or other sources.
Senator Comeau: I am a little bit off the subject of accountability at this point, but I find it interesting what you are doing. If an application were to be made, a research project itself would not be submitted. It would be: Here is the University of Ottawa; we wish to enhance our research capabilities because we have X number of professors who we think will be able to develop new and innovative projects. However, you would not look at projects themselves?
Mr. Phillipson: Not quite. To be eligible to apply the CFI, the institution first has to provide us with their strategic research plan, and then their applications, subsequently, have to align with their research plan. Whether they apply for funding for infrastructure, equipment or a new laboratory, the focus is on the infrastructure, but they have to indicate, in detail, what type of research they will conduct and the researchers. There is a whole section of the application that deals with the research that will be conducted. In other words, it is not simply a case of buying a piece of equipment or funding a piece of equipment for the university and then hoping they will put it to good use. The applications are assessed on the excellence of the research that is to be conducted and on the need for the particular infrastructure.
Senator Comeau: The result, as I understand it, is to enhance research productivity for the benefit of all Canadians. Should that not read ``humanity''? If you do a research project, the goal is to publish.
Mr. Phillipson: Yes.
Senator Comeau: Therefore, we are offering something to humanity, rather than just to Canada.
Mr. Phillipson: Certainly, knowledge, which is transmitted usually the day it is discovered, is there for the benefit of humanity. Some of our other projects which are more applied technology development — because our mandate includes both research and technology development — the impact may be on a more local level, may help a Canadian citizen.
Senator Comeau: That is when the private sector may be one of the partners?
Mr. Phillipson: Exactly. The legislation and our funding agreement say that our research should ultimately produce benefits for Canadians, but you are quite right that it often produces benefits for humanity worldwide. One can think of many examples. Canadian scientists were the ones who sequenced the SARS virus during the SARS outbreak. That knowledge was transmitted around the world within 10 minutes and the other countries which were experiencing SARS benefited from it immediately. If there is anything that is global today, it is certainly research and knowledge.
Senator Comeau: My next question is for Mr. Riddell. You mentioned that you had a public consultation some years ago when you were setting up the Millennium Scholarship Fund, and this was obviously to seek views of Canadians as to how and to whom the scholarship should be directed. Do you have these public consultations or do you have a plan to have such consultations in the future in order to establish whether requirements or desires have changed, and how often would these consultations happen?
Mr. Riddell: First, before any Canada Millennium Scholarship Foundation major program is put in place, there are public consultations. The public consultation in 1998 was with respect to the use of the money that the foundation would provide to people on the basis of need. These are commonly called bursaries. There followed a public consultation in 1999-2000, prior to the establishment of the foundation's Excellence Award Program, which are awards granted on the basis of merit, without consideration of financial situation, commonly referred to as scholarships. We held another public consultation in 2003, prior to establishing the foundation's research program, to determine the people who were most knowledgeable about the need for information about student financial assistance and how its design affects student behaviour, what was needed to be known, following which we put in place the foundation's research program.
Then, in accordance with the foundation's legislation, we were required to produce a midterm review of the operations of the foundation. Actually, the legislation simply required a report on the foundation's operations. Since the foundation was already making annual reports in quite a lot of detail about what it was doing, my board decided to commission an external review which would be essentially a compliance audit, a performance audit and an evaluation rolled into one. That was done by an independent team led by Queen's University but involving people from a number of institutions across Canada. That was completed.
Then, in 2004, we held a public consultation on what the Queens' review team had found. As a result of that, there was a change in the foundation's funding for some of its bursaries. Previously we had been providing bursaries solely on the basis of need, need being the cost of attendance minus the resources at a person's disposal. What happens, strangely, when you do that in the Canadian situation — and the foundation was not unique in this — is that you end up giving interest-free loans and grants to middle-class people and interest-free loans to poor people. They do not get grants. That is because the poor tend to minimize their costs.
As a result of the consultation that we conducted in 2004, the foundation introduced a new program, which began its operation last year, to provide bursaries to students not necessarily on the basis of their need — they must still have need — but on the basis of their family income to ensure people from lower incomes actually receive their share of non- repayable student financial assistance. There has been a regular history at the foundation of holding public consultations on any program before it is put into place.
In addition, each year we hold an annual general meeting to discuss the operations of the foundation. To ensure people are there to discuss what we are doing and to be able to critique it properly, we hold it in conjunction with the Canadian Association of Student Financial Aid Administrators. This means that we guarantee an audience of roughly 80 people who are among the most knowledgeable people about student financial assistance because they have these students in their offices all year long. They know what their problems are. They are able to provide advice to the foundation about the programs we are running, what better information might be communicated to students about them and how they can be improved.
I would like to come back to the question Senator Cochrane asked. I am rather proud to say the foundation has now had eight audits, every one of which has been absolutely clean. There has been no comment of any kind that there was any problem at the foundation with respect to any of our operations. These audits are done by the external auditor, Ernst & Young, the results of which are published in our annual general report.
Senator Joyal: I wish to come back to Mr. Phillipson to discuss the analogy I was referring to concerning the Canada Council. I want to point out to you that clause 164 of the bill states:
Schedule I of the Act —
It is referring to the Access to Information Act.
— is amended by striking out the following under the heading ``OTHER GOVERNMENT INSTITUTIONS'':
The Canada Council for the Arts is included in that list. You might want to review that with your legal advisor. There is some conclusion to draw from that considering that the Canada Council is removed from ``other government institutions.'' That comes back to Mr. Ritter because in the following clause the Canadian Wheat Board is brought back in.
Mr. McLandress is the legal advisor to the CWB. What triggers my interest here is that Mr. Ritter stated in the third paragraph of his presentation that the act that created the new CWB specifically states that it is neither an agent of the Crown nor a Crown corporation. That is very compelling in terms of legal status. What are you exactly?
Mr. Ritter: We are called a mixed entity.
Mr. McLandress: Shared governance corporation is the parlance that has been applied. It does not have a defined legal meaning. It is a term that exists. Someone needed to come up with a way of describing an entity where the Government of Canada has the ability to appoint board members. That is essentially what a shared governance corporation is.
Senator Joyal: I understand the government appoints one third of the 15. Ten members are elected like you, Mr. Ritter, by the farmers. You are in a position of control of the Wheat Board. You have a minority partner that happens to be the Government of Canada who brings to the Canadian Wheat Board the capacity to provide you with a guarantee.
Mr. Ritter: To be fair, senator, the government gives the CWB the single desk mandate, too. That is included in our statute.
Senator Joyal: You have the responsibility to market wheat. You are in the hands of a majority of farmers who are part of your consortium. You have a minority partner who brings you, as assets, a bank guarantee. Am I describing correctly what you are?
Mr. McLandress: That certainly covers part of it. As Mr. Ritter said, legally, we are a statutory corporation. The CWB Act creates a single desk. Some describe it as a monopoly. We could debate whether it truly is or not. However, it creates the single desk. It is also the vehicle by which the members are appointed. In that sense, yes, the government is like a banker, in part. It is also the act that gives the mandate. The farmers elect the directors.
Mr. Ritter: There is a further complexity. The government appointees do not and cannot act as a voice for the government. Like any other director on the board, they have the fiduciary duty to act in the best interests of the CWB. They are not representing the government.
Senator Joyal: That was to be my second question. What is your link with the Minister of Agriculture?
Mr. McLandress: The act defines a minister responsible for the Canadian Wheat Board. Currently, it is the Minister of Agriculture. It has not always been. Sometimes it is and sometimes it is not. The act designates that there will be a person who is the minister responsible.
Ultimately, cabinet makes the appointments. That is the main contact, if you will. There are other links. The minister has to present the annual report to Parliament, for example. We prepare an annual report, just like anyone else's. There are other connections but that is really the link.
Mr. Ritter: The minister can ask for information from the CWB. If he does, we have to provide it. He can also give direction to the CWB, but that has to be through an Order-in-Council.
Senator Joyal: So it cannot be through his members on the board.
Mr. Ritter: Not through his members on the board or even through himself. It has to be through Order-in-Council. It has to be a cabinet decision.
Senator Joyal: I am trying to see where we should draw the line between the protection you need with your competitors and access to information. I would certainly be concerned to expose you to vulnerability in the market because I understand that you are in a competitive world. When I say that, I look at the ceiling; I do not look south of the border. I understand that you need some protection.
On one hand, if you are to be guaranteed by public funds, then the Canadian public should have access to information in the same way that is normal in our free and open society. On the other hand, we do not want to jeopardize your capacity to compete. It is a question of balance between your capacity to compete and the right of the public to know about your operation, taking into account your public status.
I am trying to see how we can establish parameters that are of a comparable nature whereby we could consider other examples in the list of Crown corporations, even though you are not, or government agencies, even though you are not, that could help us to define the proper regime under which you should be guided. That is what I am wrestling with. I do that to be fair with you and with the Canadian public. That is essentially our conundrum.
Mr. Ritter: When we looked at this, our first obvious choice was not to be included. There are so many other avenues by which information can be garnered from the CWB, including our annual report which is audited every single year. We have had the Auditor General look at our operation. We report to Parliament. Directors run for election. We have to be accountable to the growers.
We get 3,000 calls a week for information, both from farmers for personal information and from grain companies. We already provide a plethora of information to virtually everyone. That is our first choice.
Our second choice would be to be included in the group that we describe there and that Senator Milne has now indicated may be in some jeopardy. Nevertheless, we are in a competitive business and we need some competitive protections similar to what we face in the commercial world. To put us in jeopardy there certainly would cause us and the farmers of Western Canada serious harm. We share your dilemma and trust that we can find a way to conquer both issues.
Senator Joyal: Did you make those representations in the other place when the House of Commons was studying this bill?
Mr. Ritter: I do not recall us making a presentation before the House standing committee.
Mr. McLandress: We were not in the bill as it was originally framed.
Senator Milne: You were added in committee.
Senator Joyal: You make it more difficult for me and perhaps other members of the committee.
Mr. Riddell, with regard to the participation of Quebec in the Canada Millennium Scholarship Foundation, how would this bill affect the agreement you have with Quebec? Which part of the information that you give to Quebec could be made available under your status in this bill?
Mr. Riddell: The information provided to us by the Government of Quebec under the agreement they have with us to administer millennium bursaries in the province on our behalf is essentially information about individuals. It includes the SIN number of the proposed recipient and information about that person's need. As such, that information is protected by privacy. I cannot conceive of any circumstance in which information provided to the foundation for the operation of our program from the Government of Quebec could be accessed through an access to information request.
Senator Joyal: In other words, a student in Quebec who requested a scholarship from the regular programs of the Quebec government would have exactly the same protection as a student who received a grant from the Canada Millennium Scholarship Foundation?
Mr. McLandress: Exactly. Perhaps I should explain how the foundation's program works, and it works the same way in every province.
To avoid the cost of a separate application process and to ensure that we would get the widest possible number of applicants for the foundation's awards, we signed agreements with all the provinces and territories stating that if a student applied for student financial assistance in his or her province, his information would be transmitted by the province to us, and by virtue of applying for student financial assistance in his or her province they had de facto made an application to the foundation.
The information is collected at the provincial level. The provinces understand who is eligible for the foundation's awards. They take from the pool of applicants they have for their own financial assistance the names of people whom they nominate to the foundation. When they make the nomination, they provide information such as the SIN number, the need and so on, sufficient to justify the foundation's making an award to that person.
That information comes electronically to the foundation. It comes several times a year. It is very carefully protected at the foundation because obviously this is sensitive information about people. However, as I said, I have seen nothing in the legislation — in fact I have seen things to the contrary — that would ever compel the foundation to make this information available to anyone except the person whose information it is. It is in the privacy part of the bill that we are now required to publish, probably on our website, information about the banks of information we hold on individuals and to create a procedure whereby individuals on whom we hold information could apply to the foundation to see their information and to tell us whether the information is correct.
Senator Joyal: They could probably apply to find out, for instance, whether their name has been transferred by their provincial government to be part of your evaluation.
Are the protections in the provincial access to information acts comparable in all provinces?
Mr. Riddell: They are comparable. The foundation actually operates under 14 privacy laws, and we respect all of them in detail.
Senator Joyal: That is important.
Senator Zimmer: I had three questions. The first was directed to Mr. Ritter, and the chair asked that question. The next question was directed to Mr. Riddell, and Senator Milne and Senator Joyal asked that question.
I would like to say to Mr. Riddell that it is a great program and to wish him continued success.
I will offer a point of clarification to Mr. Phillipson. I made reference to the grants, and I do recognize you had the identity of reviewers of grants. Although your system is a little different, I am drawing an analogy.
Senator Day: I would like to follow up with the Canadian Wheat Board. Under your statute, how much is the federal government obligated to transfer to the Canadian Wheat Board on an annual basis?
Mr. Ritter: Nothing. It is a guarantee in case of a loss, and in our history, losses have only occurred after events far beyond our control.
Senator Day: In the normal course, there is no federal government funding?
Mr. Ritter: No money.
Senator Day: Usually one of the most important reasons for disclosure is that there is public money involved. You are dealing with farmers' money.
Mr. Ritter: Yes.
Senator Day: I as well have great difficulty understanding why you are being included under the Access to Information Act. I was amazed to hear you say to Senator Joyal that the Canadian Wheat Board was added at the committee stage. Were you consulted? Did you lobby to be included?
Mr. Ritter: No, we did not.
Senator Day: You think you should not be there and you do not know how you got there. Do you know who suggested you should be there?
Mr. McLandress: Pat Martin, an MP, moved for the addition. I would suggest that the original drafters clearly did not contemplate including the Canadian Wheat Board. I cannot imagine that leaving it out was an oversight on their part, given the length of the list of the entities they have included. I think the act was framed with a view to not including the CWB. We were slipped in partway through the process and we would rather slip back out.
Senator Day: We try to understand the policy basis for changes in the law. You are telling me that the only way to get to the policy basis for that change at committee is to ask the NDP member, Pat Martin, why he moved an amendment there. Is that correct?
Mr. Ritter: Yes. We do not know ourselves.
Senator Day: Have you had any discussions with him?
Mr. Ritter: I have not, that is for sure.
Mr. McLandress: I have not spoken to him.
Mr. Ritter: I am not sure if other members of our board have.
Senator Day: He did not write you a note saying he got you in?
Mr. Ritter: No, he did not.
The Chairman: Before you move on, Senator Zimmer would like to ask a supplemental question.
Senator Zimmer: Did he indicate his rationale?
Mr. Ritter: No: I do not recall it, anyway. I should not say there is nothing.
Senator Day: My only other area of questioning is with respect to Mr. Phillipson. Mr. Riddell, you are fine, you are happy with everything, so I will keep up the good work.
With respect to the Canada Foundation for Innovation, in my mind, and perhaps incorrectly, I feel you probably need the same kind of protection that the Canada Foundation for Sustainable Development needed, and has requested. The foundation has asked for two things. It feels it should be listed. This was the fallback position for the Canadian Wheat Board. At page 119 of Bill C-2, clause 147, which amends section 18.1 of the Access to Information Act, states, ``The head of a government institution.'' Since you are in the schedule, you are a government institution. Once you are there and once this bill passes, you are deemed to be. The proposed amendment goes on to state that the head ``may refuse to disclose a record requested under this Act that contains trade secrets or financial, commercial, scientific or technical information that belongs to, and has consistently been treated as confidential...''
There is then a list of various organizations, including Export Development Canada and VIA Rail Canada. The Canada Foundation for Sustainable Development group wishes to be put in there. They think that is part of what they need. You do not think you need to be there?
Mr. Phillipson: I cannot be dogmatic that we need to be there. I can envision some difference between us and the sustainable development foundation in that the foundation funds, if I am not mistaken, the private sector. Our funding is limited to public non-profit institutions, universities, colleges and research hospitals. The foundation does have a merit review system so, in that sense, we are comparable.
Senator Day: The foundation had another request. They requested that they come in under the new section 18.1, and they also requested that, like Export Development Canada, they be under Schedule II rather than Schedule I. The foundation is still a government institution in Schedule II but Schedule II provides for certain other provisions where these organizations do not have to divulge proprietary information. They do not have to divulge their methodology for choosing where their grants will go, the people involved and that kind of thing. They felt they needed both those clauses for protection.
You will get back to us in any event with respect to what you propose as a change. You said two simple words: ``individual'' or ``institution.'' I cannot find the section in which you wanted these words changed. In relation to a question by Senator Cowan, you have undertaken to do that. Will you undertake to consider their position and tell us whether you think you should have the same category of privileges or whether you are content with adding the word ``institution''?
Mr. Phillipson: We will look into your suggestion. If putting us under that same subsection provides the protection we seek in divulging the name of reviewers, that would be sufficient.
Senator Day: I understand what you are trying to protect. It may well be similar to the foundation, and we do not want to provide the protection in two different ways. Putting two foundations in under this exception is as easy as one.
Mr. Phillipson: Thank you. I appreciate the suggestion. We will look into it. When we respond to Senator Cowan's question, we will do that.
Senator Day: If you need the transcript, our clerk can help you with that, and provide you with their actual wording.
The Chairman: Senator Joyal had also asked the clerk for information with respect to the Canada Council for the Arts.
Senator Day: Was that before Senator Joyal noticed that Canada Council will not be part of Schedule I or was that after that?
Senator Joyal: Before and after.
Senator Day: Senator Joyal posed that question before he found that section that excluded them, but I could not find the other granting councils in there one way or another. I suspect they are not caught by the act, but I cannot tell you that because I could not find it in here.
Mr. Phillipson: The other granting councils are not caught by the act because their applicants are individuals. The wording already excludes them. It said that they are not obligated to provide the names of reviewers on grants made to individuals.
The Chairman: That is why the word ``institution'' is there.
Mr. Phillipson: Our grants are made to institutions. If the wording said grants made to individuals or public non- profit institutions, that would cover us.
Senator Day: I will let you answer his question because I suspect that those who drafted the accountability act do not really care whether the federal government money goes to institutions or individuals. They are concerned about how the money is used by whoever receives it.
Mr. Phillipson: Absolutely: We viewed this as simply unforeseen consequences of what the act might do. I certainly do not think there was any intention of impairing the merit review system, which is at the heart and soul of our operation.
Senator Day: We would never impute dishonest or unfounded intentions here, but we find a lot of unforeseen consequences when you make changes and put an organization under a regime that existed with broad scope.
Another piece in here gives extended powers to the Auditor General to follow the money. Does that apply to your foundation? Does that cause you any concern or discomfort?
Mr. Phillipson: No: In fact, our position is similar to the Canada Millennium Scholarship Foundation. The original legislation funding agreement required that our members and board appoint external auditors, and that is the case. Our audited statements and our annual report are tabled in Parliament by the Minister of Industry.
In the most recent funding agreement arrived at last fall, the Auditor General has been given the authority to audit whatever she feels is necessary. At the moment, we are also part of an audit similar to the Canada Millennium Scholarship Foundation. Ours is part of the innovation audit. There is a horizontal audit. There are seven organizations and government-related institutions such as the Canada Foundation for Innovation. The audit involves Industry Canada and some of the granting councils that she is auditing as part of an entire innovation audit. She certainly has the authority to undertake audits of the foundation.
Senator Day: Yes: You continue to have your financial audits internally. I understand that. I am not talking so much about a compliance audit. A lot of different types of audits are going on here. This audit looks at who you gave the money to and whether they used that money in the manner that they should have used the money.
Mr. Phillipson: To whom we give the money is on our website. We are happy to provide it to anyone who asks. We have external auditors who perform contribution audits; that is, they go to the institutions to audit how the institutions use the funds to ensure that it is in compliance with the agreement and the purpose for which the money was given.
Senator Day: That is part of your granting agreement. Do you make provision for that?
Mr. Phillipson: Absolutely.
Senator Day: It would not matter if an external auditor or the Auditor General did that, then. Are you the same in the Canada Millennium Scholarship Foundation?
Mr. Riddell: The Auditor General now has the ability to audit the foundation. As I indicated, she is conducting a performance audit of the major part of our operations at the moment.
Senator Day: This new right has been given to the Auditor General.
Mr. Riddell: That is right.
Senator Day: To follow the money beyond your institution. Will that cause any discomfort to a student?
Mr. Riddell: No. I do not anticipate any difficulty at all.
Mr. Ritter: The Canadian Wheat Board is a controversial organization. There is a lot of controversy around it, and we admit to that. In 1998, in order to determine the future of the organization, the Government of Canada passed an act that allowed for director election, where this controversy could be battled out in the public domain and directors would be elected based on a platform.
Our directors do not run as political party members or anything. They are all independents; they all run as independents. We had the director election to determine which way this organization should go. We also have a plebiscite within our legislation under section 47, so that any growers of either wheat or barley, if there is a substantive change to the act, the government has to do a plebiscite of those growers to determine whether that is acceptable to them.
We got into this act by mistake, quite frankly. In the euphoria of inclusiveness, some of the consequences of including us were not considered. That is why it is very important that you, as senators, who are viewed as having sober second thought on legislation and its applicability, have an opportunity to do the right thing. That is simply what we are asking of you.
Senator Cowan: Are those audits publicly available and accessible?
Mr. Phillipson: We have a number of audits. I was referring to the contribution audits, which is the audit of how the institution utilizes the funds. We do have another type of audit related to performance.
Senator Cowan: Is the contribution audit an audit of how the institution has spent the money that you awarded to it?
Mr. Phillipson: That is an audit to ensure it was spent exactly in accordance with the terms under which the funds were granted.
Senator Cowan: Those audits are accessible by the public?
Mr. Phillipson: Certainly those audits would be accessible through a request for information.
Senator Milne: Mr. Ritter, it seems to me that you do not fall under this bill, or should not fall under this bill, and yet you are there. You receive no federal monies, or have not very often. Why are you audited by the Auditor General when it is all farmers' money that you are using? There was a one-time audit that was placed in legislation, just to clear up the perceptions that were out there. I believe the audit year was 2001. Was it built into the legislation to set up the new form of the board?
Mr. Ritter: Yes.
Senator Milne: Mr. Phillipson, you suggested amending the relevant sections of Bill C-2 that deal with CFI to include two words, ``or institutions.'' Would you provide us a listing of those particular sections of the bill so that you will do the work rather than us?
Mr. Phillipson: Yes. In fact, I think that was what Senator Cowan requested. I do not have that in front of me, but we will be happy to provide that information.
I would like to amend the answer I gave to Senator Cowan's question, if I may. Before we can divulge the contribution audit, because we provide only 40 per cent of the funding, the institution and whatever other partners they have, have to agree to it. In other words, we do not do it unilaterally. The information is available, but we must obtain consent. In general, that is not an issue.
Senator Stratton: Welcome, gentlemen. I want to thank you for appearing because it is important that we hear from you. It would appear that both of you are in favour of this proposed legislation because it gives the perception of being open and accountable. That is the essential ingredient. We see the nodding of heads.
Mr. Ritter, the perception that your organization is open and accountable; why would you not want the same thing?
Mr. Ritter: We are open and accountable.
Senator Stratton: That is not the perception. You know there is a controversy out there in the West about your organization. This is hearsay, but some view it as a highly secretive organization. You know the litany far better than I do.
I am putting words in the mouth of Mr. Martin, and perhaps other MPs from out west, because this is a Western organization only. If you were in Ontario or Quebec you could sell your wheat openly.
Senator Day: What about the wood products marking board in the East? It is very similar.
Senator Stratton: If it makes you appear more open and accountable, why would you not be in favour of it?
Mr. Ritter: We are not at all concerned about being open and accountable, senator. The difficulty we have is that we are a commercial organization in competition with other commercial organizations from around the world. If we are put into a commercially-disadvantageous position, farmers will suffer financial harm. That is the dilemma we have. As a taxpayer, yes, I want openness. Any government money that is spent, I would love to see openness. Rarely, if ever, is government money involved, and secondly, as a commercial entity, we have to function in the real world and we cannot have our commercial activities open to our competitors where theirs are not open to us.
Senator Stratton: I would not disagree with that at all. If you look at the other witnesses this morning that had similar concerns about the security of their commercial assets and the competition knowing about their assets, they felt quite comfortable. They felt quite comfortable with being included, perhaps with an addendum, but nevertheless they felt quite comfortable. Why would you not feel the same way? I am just curious.
Senator Joyal: I am sorry, I do not want to answer for the witness, but understand that Mr. Ritter wants the CWB to receive the same protection provided to the other four organizations.
Senator Stratton: That is exactly my point. Why would you not feel comfortable if the other groups do? As a Westerner, one becomes very aware of the Canadian Wheat Board at a very young age. The biggest problem is the perception of whether it is open and accountable.
You can say that, but you are one of them, so you are not an independent, outside source saying that you are independent, open and accountable.
Mr. Ritter: That is what we said in our presentation. I think it was a mistake that we were placed in Bill C-2. Even so, our second-tier position is that we should be considered in the same category as VIA Rail, which obviously is in commercial competition with the airlines and bus companies and so on. We should be placed in at least that position.
The Chairman: Honourable senators, that brings this panel to an end. I would like to thank the presenters very much. This is an area where there is a lot of concern by a number of Canadian groups and we deeply appreciate your taking the time to come here and explain your position to us. It has been helpful.
Honourable senators, our next witnesses will also deal with issues relating to access to information and privacy. We are joined now by representatives from the National Arts Centre, Canada Post and Genome Canada.
Welcome to our meetings on this bill. We would like a brief presentation from our witnesses. Following that, honourable senators will pose questions and we will engage in a question-and-answer period.
Ms. Greene, you have the floor.
Moya Greene, President and Chief Executive Officer, Canada Post Corporation: Mr. Chairman, with me today is Mr. Gerard Power, who is legal counsel for Canada Post. He has spent considerable time studying the very piece of legislation that has been turned over to you for your deliberations. I am sure you will find it of help to put some of your questions to him.
Honourable senators, I thank you for giving me and my colleague an opportunity to appear before you.
[Translation]
First of all, allow me to thank you for this opportunity to appear before the Committee this afternoon.
[English]
As you know, senators, I was given an opportunity earlier in the year to speak to the House of Commons committee which was studying Bill C-2, this very significant piece of legislation. As senators, it has come to you for your sober second reflection. I am pleased to have an opportunity to make a few comments on the bill to you as well.
I appreciate this time that you have given me to share our perspective on Canada Post and on the bill, which I am certain will strengthen accountability generally throughout the Government of Canada. At the outset, therefore, I would like to stress and emphasize that Canada Post fully supports the draft legislation. I believe it will make a significant and positive impact on public administration.
My purpose today is to provide you with a little insight into Canada Post, both of the massive scale of our operations and of the intensity of the competitive environment in which Canada Post operates. I would like to give you a greater understanding of why these factors will be important while you deliberate the bill and consider how best to apply it to Canada Post.
Canada Post has been proactive in the area of strengthening accountability and oversight. We have introduced various measures, including a whistle-blowing policy that came into effect in January of this year. We have a renewed conflict of interest policy as well, which provides clarity and guidance to all of our people on how we expect them to conduct themselves, the level of personal integrity and the standards for honesty and diligence that go with performing duties at Canada Post. Our board of directors and the governance committee, led by our chairman, Mr. Gordon Feeney, who is a very respected and non-partisan businessman, has put in place a rigorous business process. All travel and hospitality expenses that apply to board members and to all members of senior management must be approved and carefully recorded.
[Translation]
Canada Post understands the goal being pursued by the Government of Canada — namely, greater transparency and accountability — and supports the principles laid out in Bill C-2.
As you know, Canada Post generates almost $7 billion in revenues annually, 95 per cent of which comes from large corporations. We deliver to 14 million addresses in Canada. Every day, the Corporation delivers more than 40 million messages, parcels and other mail items.
Our network includes some 7,000 post offices all across the country. That extensive network makes for a very strong presence nationally.
[English]
However, Canada Post operates in a vigorously competitive environment. Our competitors are large, multinational and very well financed — some of the biggest corporations in the world. They include companies like UPS, DHL and FedEx, as well as other national post-led administrations competing in the international market.
About one half of the revenues of Canada Post are fully open to direct competition. Our markets in the direct marketing mail and parcels businesses are completely competitive businesses. In addition, it is important to know that much has changed even in the letters business, or the transaction mail business. While once Canada Post enjoyed an exclusive privilege in these businesses, that is shrinking with the advent of new and important technologies such as email, fax and other methods of electronic substitution. The competitive environment for Canada Post is intense and has changed. Bill C-2 brings Canada Post under the purview of the Access to Information Act for the first time. The corporation will be one of the largest organizations in Canada subject to this legislation.
Canada Post has over 71,000 employees. It is the sixth-largest employer in the country. Canada Post operates in every town, village and city. It has almost 7,000 retail outlets in the retail network alone. To put this into perspective, that is 500 more sites than Wal-Mart has in its network all over the world. As you know, Wal-Mart is one of the largest companies in the world and is certainly considered to be the largest retail network. That gives you a sense of the scale of Canada Post's operations.
It is an enormous organization. As such, we need to be properly prepared. We need to train a large number of people on the obligations that are now upon us under the Access to Information Act.
[Translation]
Committee members can certainly understand that our competitors will undoubtedly use access to information to obtain commercially sensitive information, thus causing serious financial harm to the Corporation and third parties with whom we have dealings.
[English]
To put this in perspective, Canada Post has emerged as a major enabler in the Canadian economy. Canada Post spends almost $3 billion annually on goods and services throughout this economy. Our total revenues are now more than $7 billion. More than 50 per cent comes from 200 of Canada's largest commercial entities. Canada Post has 155,000 multi-year contracts with Canadian businesses. That again gives you a sense of the scale on which we are an economic enabler in partnership with most Canadian business.
Within these agreements there is significant third-party financial and operational information. No other organization subject to the Access to Information Act will have to take on the obligation to safeguard such a huge amount of commercial information. This is a difficult task, but I am very confident that with proper preparation and management we will do it well. However, this is why I believe you must be very vigilant and exercise due diligence in looking at this bill to ensure that the time frames for application of the legislation to companies like Canada Post are reasonable.
We will have to spend a great deal of time in the next 12 months preparing ourselves in order to raise the awareness of our management and all of our people on the new requirements of the legislation. We have to have the time to respond to the requests that I am sure will come to us just as they have come to other organizations subject to this and similar legislation. In order to be certain that we can be in full compliance with the Access to Information Act, we are now recruiting expert help to get us ready for what I believe will be a very large managerial task. We are also recruiting people to help us train our staff, which is a necessary component of the preparation that is underway. The critical challenge will be to ensure that our embedded processes and the training will allow us to be ready to comply with the legislation when it is formally made applicable to us.
When I appeared in front of the House of Commons legislative committee, I expressed the hope that Canada Post would be given 18 to 24 months to put all this preparatory work into action and to ensure that we get it right and that we are fully ready for the complex nature of Canada Post. It is commercial, it is large, and it has many, many relationships both on the supplier side and on the customer side, which we need to bring into the sweep of this legislation.
We hope, therefore, that the government will take into consideration the time frames that I mentioned in deciding when the access to information legislation comes into force for Canada Post Corporation. We ask that this consideration form part of your deliberations and the recommendations that you bring back to the government on this bill.
The Chairman: Thank you for that presentation. I have several questions myself, but first I want to hear from the other presenters. Perhaps, Ms. Foster, we can hear from you on behalf of the National Arts Centre.
[Translation]
Julia E. Foster, Chair of the Board of Trustees, National Arts Centre: Mr. Chairman, thank you for the opportunity to meet with you today. I am pleased to be here to comment on the proposed amendments to the Access to Information Act, from the perspective of a chair who holds the NAC in great affection and respect.
Allow me to introduce my NAC colleague who is with me today. Ms. Gregersen is the National Arts Centre's Executive Director of Development and CEO of its Foundation.
We will be able to answer any questions you may have at the end of my brief presentation.
[English]
The National Arts Centre supports the move to bring NAC under access to information. We congratulate the government on finding a balance between the need to provide greater levels of transparency for Crown corporations and the need to provide some degree of confidentiality for information not germane to the public interest.
The draft legislation provides some degree of added protection for certain types of information for certain Crown corporations. For example, CBC has protection for journalistic sources and EDC has protection for its customers and confidential data. In the draft bill presented to the House of Commons committee, the NAC was also to be provided with a carve-out for information related to artists and donors.
When we made our presentation to the House committee studying Bill C-2, our concerns appeared to have been understood. However, at the last minute, this carve-out was removed from the final version of the bill. We urge senators to take a closer look at the legislation and reinstate the added protections the National Arts Centre sought that were once included in the bill.
The original legislation recognized that all contracts negotiated between the NAC and individual artists in a confidential manner remain so. It is necessary to continue to provide protection against the disclosure of the amount we pay a director, designer or performer. An artistic contract varies based on the size of the venue; the discipline, for example, classical music versus theatre; the size of the role; and the reputation of the artist. As all artists are not paid the same fees, there is a need to keep individual contracts confidential. Many leading artists would not want to perform at the National Arts Centre if this information were to be made public. In addition, if the fees the NAC pays for artists were to become public, it would seriously undermine our ability to secure certain artists and to negotiate fair terms.
The other area where the original legislation provided some protection was for our ability to fundraise in the private sector with individual donors and corporate partners.
The National Arts Centre now generates approximately 50 per cent of its revenue from non-government sources and expects that percentage to go up to 60 per cent by the end of the decade. In 2010, we project an annual contribution level of $10 million in fundraising revenues, which would be 15 per cent of our total budget.
In fundraising, as you well know, the relationship between donor and recipient organization is highly personal. The donor must believe that the institution to which financial and other resources are being entrusted is willing and able to ensure the highest standards of confidentiality, should the donor so wish. Any breach of the trust between donor and recipient would severely damage the donor-NAC relationship.
Individual donors often disclose highly personal, family and financial information when discussing possible support for our organization. They do so knowing that professional fundraising staff needs this information to suggest the most appropriate level and asset for this individual to contribute and the most beneficial tax treatment available. Such information often includes their entire annual income; their estate plans and that of their spouse; their personal health status; what issues they have with family members in relation to their wills, and so on. We need to be able to give donors an absolute assurance of confidentiality.
The National Arts Centre has at least 10 such donors and sponsors at this moment who make anonymity and non- disclosure of the investment amount an explicit part of their contract or letter of agreement. Investment amounts in this category frequently total 10 per cent or more of the annual fundraising results for the year.
Given our increasing emphasis on sponsorship and donations as a source of revenue, the impact of even the possibility of forced disclosure would severely impact our ability to raise funds. The type of information we need to protect is specialized Shielding it from access should not materially affect the broad public interest.
In conclusion, we urge the committee and the Senate to reinstate the protections originally proposed for the NAC related to the confidential information for artists and donors within the final legislation. Thank you. I welcome your questions.
Martin Godbout, O.C., Ph.D., President and Chief Executive Officer, Genome Canada: It is an honour to be here today to represent Genome Canada and to answer your questions relating to Bill C-12.
Last week, you received a package in French and English summarizing all the documents related to governance and accountability from Genome Canada. We also provided you with a one-page summary of all our governance and accountability procedures, and I want to direct your attention to these.
[Translation]
Genome Canada is governed by a sixteen-member board of directors and follows the same procedures as those laid out in Sarbanes-Oxley. Since our creation in February 2000, we have operated Genome Canada as a corporation.
[English]
I want to draw your attention to the bottom of that page. I will read it with you, because that will put Genome Canada in context for Bill C-2.
Genome Canada is a private, not-for-profit corporation incorporated in February 2000 under the Canada Corporations Act, Part II. Genome Canada operates at arm's length from the government. It is not a department, agency, Crown corporation — and I can add here — or foundation created under the federal statutes.
It is not subject to the federal administration act. We report to Industry Canada, and the relationship between the Government of Canada and Genome Canada is governed by a founding agreement.
When you look at the summary sheet, you will see on the left-hand side all of the committees and subcommittees that we have under corporate governance. We also have policies and, in the scientific field, conflict of interest and confidentiality are primordial. We also have whistle-blowing.
The accountability side is governed by a founding agreement between Industry Canada and Genome Canada, and we have to report annually on our corporate plan, annual report and strategic plan. We also have several compliance audits. We also have a performance audit, and under the agreement that we have with Industry Canada we are submitted indirectly to the Official Languages Act, Access to Information Act, and the Lobbyists Registration Act. We comply with most of the points raised in Bill C-2.
As my predecessor mentioned, confidentiality and conflict of interest in the scientific field are primordial for several reasons, the most important being intellectual property. We received, in the last competition, over $1.4 billion requests. If we had released all these applications into the public domain when we received them, we would have received no applications.
We have a peer review committee that reviews the science. We have a peer review committee that reviews the financials, as well as the management of all the projects. These reviewers are not Canadian. They all come from outside Canada. They all sign a confidentiality agreement. We ensure also for the applicants that those who review the proposals are not in the position of a conflict of interest. For us, without confidentiality and conflict of interest, we would not survive.
As for the access to information, at the request of the government, or Industry Canada, we comply when asked for information. Similarly, we are not under the umbrella of Ms. Fraser, the Auditor General, but at her request or at the request of Industry Canada, it is written that we open our books for any type of audit.
It is very transparent. We manage public money; not only federal money but also provincial money. From the provincial government in the past six years we have received over $600 million, but we have matched that with over $840 million from other sources, including Wellcome Trust in the U.K., the Wallenberg Foundation in Sweden, the NIH, the Gates Foundation and, as I said, the provincial government.
For us, transparency is extremely important. As soon as we get money from any one of these organizations we are pleased and we put it on the website, so it is very open access.
We will not be too affected by Bill C-2. We do not see any major issues and, again, on one side or the other, it is not a political issue for us; it is fundamental. Without confidentiality or conflict of interest policies we would not survive in this field.
The Chairman: Ms. Foster, when you were giving your presentation you used the word a ``carve-out'' of information. At the bottom of page 1, it says:
Section 20.1: The head of the National Arts Centre Corporation shall refuse to disclose a record requested under this act if the disclosure would reveal the terms of a contract for the services of a performing artist or the identity of a donor who has made a donation in confidence and if the corporation has consistently treated the information as confidential.
Are you saying that that was in the original bill?
Ms. Foster: Yes, that is correct, it was in the first reading, proposed amendment 20.1.
The Chairman: In the carve-out, could you tell us what happened at the committee that it is no longer there? It is not in the bill now. What happened?
Ms. Foster: I will ask my colleague, because I was not there at the time.
Darrell Louise Gregersen, Chief Executive Officer, NAC Foundation, National Arts Centre: I was present at the presentation to the committee when it was agreed to, and I do not know what happened between that time and the time it was removed. There were no questions. I do not know what happened. It was perhaps negotiated between individuals. I do not know, but it was not there at the next iteration. We are seeking to have just that exact paragraph that you read reinstated.
Senator Zimmer: Mr. Chairman, you must be peeking over my shoulder, because I had the same question, but I would like to go a little further. Based on the carve-out in the previous legislation to protect artists and donors only, are you simply asking us to restore this protection and do you have practices in place to provide disclosure on all other matters?
Ms. Foster: Absolutely. We are seeking only protection as stated in the previous iteration of this bill and we are fully compliant with all transparencies required of us.
Senator Day: Perhaps we should stop talking about section 20.1, because as it currently appears at page 119, section 20.1 is an exception for the Public Sector Pension Investment Board, and so we will have to get you a new number. They have bumped you.
The Chairman: They replaced her section with that section. Ms. Greene, I have been interested for some time in Canada Post Corporation for several reasons. You said you were recruiting, because you want 24 months to get ready for Bill C-2, and I am interested to know if there are efforts to recruit visible minorities at Canada Post to fill some of these positions.
Ms. Greene: Absolutely. Let me give you the most recent example, senator. We had a shortage of front-line leadership in our operations. Right now we have about 3,000 supervisors who work in our plants and our letter-carrier depots all across the country. It had been, over the past several years, very difficult to recruit replacements for people when they were retiring or when they moved to other positions.
This year we had a drive on to recruit supervisory expertise for the whole organization. As we needed about 600 supervisors this year, we put together a very different, dedicated recruitment program which included, by design, the necessity to make sure that our supervisory recruits represented the diversity in the Canadian population, particularly the diversity that exists in the cities in which they would be working. I can tell you that with the recruitment expertise outside the company working with us, we have done very well to date on that score.
The Chairman: In terms of visible minorities?
Ms. Greene: Yes, in terms of visible minorities.
The Chairman: What per cent are we talking about?
Ms. Greene: I would like to get that number for you out of the 600, because I do not have it right off the top of my head. I do remember being briefed on this several months ago when the program was in full swing, and we were doing quite well.
As you know, senator, this has been an issue for Canada Post for some time.
The Chairman: I am painfully aware of that.
Ms. Greene: However, we are doing much better. I will get that number for you. In terms of the recruitment of our expertise for access to information, diversity is a principle that the company will definitely adhere to, and we need different sets of skills to round out that function in the corporation. We need people who will train throughout the company. As I mentioned, we have a large number of employees who need to be made aware of the new obligations pertaining to records retention and records management. At the head office we will need a senior official who understands how to manage a commercial company of the scale of Canada Post inside this new set of responsibilities as laid out in the Access to Information Act. The diversity of people in that new function is a consideration that is uppermost in my mind.
Senator Milne: Thank you, Mr. Chairman.
Ms. Greene, I will start with you because you are first on my list and you spoke first. You talked about 155,000 multi-year contracts.
Ms. Greene: They are commercial contracts.
Senator Milne: They are commercial contracts that Canada Post is now involved in. Are these contracts all with Canadian businesses?
Ms. Greene: Yes: I would say in 98 per cent of the cases, yes. Some are multinational businesses that have Canadian operations, but Canada Post Corporation is primarily a Canadian company.
Senator Milne: Do all these contracts include third-party confidential information?
Ms. Greene: In many cases they do, not in all cases, but they all include important commercial confidential information.
Senator Milne: Under Bill C-2, would that information then become public?
Ms. Greene: No: We think that the carve-out to protect commercial information is sufficiently strong that we will be able to protect that information under the wording of the draft legislation.
Our issue is not the ability to protect the information, senator. Given the scale of the organization, the kinds of records, the scale of the records that we are talking about, our issue is the time that we will be given to prepare 71,000 employees to manage that access to information. We will probably be the largest organization to come under the act. We will certainly be the largest corporation in Canada to ever be made subject to an act such as this.
Senator Milne: I understand that you told the House committee that it would take perhaps a year just to recruit a person with the necessary seniority to be able to oversee this kind of operation.
Ms. Greene: Yes: I know that that sounds like a long time, but allow me to explain. Given the greater demand for transparency imposed in many contexts on corporations, a move which has gathered momentum in the past five years as a result of developments that have taken place in the private sector — Sarbanes-Oxley was mentioned by our colleague from Genome Canada — access to information and managers of that function are in high demand, just as auditors are right now. It is almost impossible, senator, in Ottawa right now to recruit auditors to look after the many new audit functions that corporations must now manage.
The same is true of the kind of expertise that is necessary to manage the retention and certainly disclosure of these kinds of information.
Access to information expertise is hard to secure right now, and our estimate to recruit someone with the experience to build a whole organization for an organization of the scale of Canada Post Corporation is 9 to 12 months.
Senator Milne: What are you asking for, specifically, in this bill? Are you asking for an extension of the time frame?
Ms. Greene: No, we are asking for the time frame that we mentioned when we were in front of the parliamentary committee. If you could give us 18 to 24 months before the bill actually applies to Canada Post, I can assure you I will be ready in that time frame.
Senator Milne: Where does that time frame come into this bill, though? I am asking you to do the work for me.
Ms. Greene: I will turn exactly how we draft it over to our legal counsel.
Gerard Power, Vice President, General Counsel and Corporate Secretary, Canada Post Corporation: It is in terms of the coming into force, as one would have in many provisions of bills, particular provisions, it is a question of the coming into force of its application to Canada Post. That is all we are looking for.
Senator Milne: Yes, but where in the bill does this apply? There are several throughout this bill and some that are missing.
Mr. Power: That is right. No specific provision states when the coming into force is for Canada Post, so it would come into force upon Royal Assent. Essentially, we are looking for a new provision.
Senator Milne: Have you suggested an amendment, then?
Mr. Power: We will provide that to you, yes.
Senator Milne: Thank you very much.
Ms. Foster, you spoke of the problems regarding the carve-out, which Senator Oliver spoke to. He asked you why the carve-out was taken out. It was carved out, but you do not know why it was put back or at what stage it went back in?
Ms. Gregersen: The carve-out was taken out just before the bill went back into the House.
Senator Milne: The carve-out was removed from the bill in clause by clause, was it? You are saying this carve-out was removed from the final version of the bill.
Ms. Foster: Is my colleague permitted to answer for me?
The Chairman: Would you mind giving us your name?
Jayne Watson, Director of Communications and Public Affairs, National Arts Centre: Thank you. Ms. Foster, as you know, only joined the National Arts Centre about two months ago, so I will answer on her behalf.
I was present at the committee. As Ms. Foster noted, the committee appeared to go well. We had no opposition at all. A member of the committee who was not present during our presentation, Member of Parliament Pat Martin showed up at a later point in the committee and proposed this amendment. The amendment was voted on and accepted. It completely caught us off guard, because we had been warmly received by the committee at that time.
Senator Day: We need more information. Mr. Martin heard none of the debate, none of the discussions, and he came in late in the event and proposed an amendment. Did he tell you why? Did he tell you he did not like the National Arts Centre?
Ms. Watson: No. I called Mr. Martin afterwards and tried to find out from him what his reasoning was, but I was not able to determine the thought process.
Senator Day: You mean you talked to Mr. Martin, but you could not understand what he was saying? What do you mean when you say that you could not understand his thought process?
Ms. Watson: Mr. Martin did not, in my view, have a strong justification for removing it. He could not explain why. He said that we did not need to worry about it, that it could be taken care of, that there are protections in the act. I argued that in our view and according to research we had done, by bringing donor information into access to information, there was always the possibility of a third-party appeal through the Information Commissioner, and that is what we are trying to avoid. He dismissed those concerns by saying he thought there were strong enough protections under the Access to Information Act.
Senator Day: Did Mr. Martin give you any indication that he was sorry he arrived late, so that he did not hear any of the discussion or debate as to why you felt it should be there?
Ms. Watson: We did not have that discussion, sir.
Senator Milne: If this bill goes through in its present form, it seems to me from what you have said that you would immediately lose 10 per cent of your annual donations, since you think 10 per cent of your donors will be affected by this.
Ms. Gregersen: There are donations under negotiation at any time. For example, we have just launched Quebec Scene that will take place in the spring of 2007 to celebrate Quebec artists. I have just negotiated two gifts as part of the funding for that festival, both of which are subject to anonymity. In one case, we are permitted to disclose the name of the corporate donor but not the amount. In the other case, we are permitted to disclose the amount by the individual donor but not the name. It is important that I am able to assure these donors that their information remains confidential. There is no doubt that Senator Joyal knows both donors. There is no doubt that he would know many other donors from Montreal. If those donors felt their gifts were in any kind of jeopardy, the word would spread to other donors in Montreal who are also looking at supporting this initiative. That would seriously damage our ability to raise funds.
Senator Milne: It could be up to as much as 10 per cent of your donations; is that right?
Ms. Gregersen: It could be significantly more than that in any one year. It could be significantly less than that. The real problem is that it sows a seed of doubt in the mind of any donor. It does not allow you to operate with the level of trust of donors that you will revere their wishes, whatever they happen to be. Trust is the most important aspect of it.
Ms. Foster: I have had a great deal of experience with many public institutions, such as arts, medical and hospital institutions. In no case is there a question of third party access to donor information. That is not part of the industry standard. You have your own standards in terms of approaching donors and what you would expect; but we are always able to assure donors that there is no third party access to the information we collect from them.
Senator Zimmer: I cannot stress enough what Ms. Foster just said. Senator Stratton will probably figure out who the person is. The person is a past president of the Royal Winnipeg Ballet, someone who had served on the board for 25 years. We have one donor who is anonymous. There is a condition on the donation, the result of which is not 10 per cent. In some years, it has been as high as 80 per cent to 100 per cent. Without that donor, the company would not survive. I cannot stress today how important that is. Senator Joyal may have a similar situation. It would not have survived. There have been years when we have been in deficit by a large amount. This person came in and cleaned off the deficit. Without that, we do not exist.
Senator Joyal: According to the Rules of the Senate, I have to declare that I have an interest with the National Arts Centre in the endeavours that the witness has just outlined. As such, I will refrain from asking questions of the witness. However, I will reserve my right to question Ms. Greene and Mr. Godbout.
Senator Milne: Ms. Foster, if Bill C-2 passes as it is written, would the NAC have the option of refusing the disclosure of contract information by citing proposed section 18(a) or (b) of the act?
Ms. Watson: I am not a lawyer, but I will do my best. As I understand it, we would have the right to refuse; however, it would be subject to appeal. The concern lies with when it is taken out of our hands and is put into the hands of the Information Commissioner. As I understand it, there have been cases when, on appeal, either donor information or other contractual information has become public.
Ms. Gregersen: To go beyond that, if it is known by anyone that there was an appeal concerning either donor information or artistic information, that would prejudice unfairly any other negotiations or discussions we may be having with other artists or donors.
Senator Milne: That is interesting and I thank you for that. It is a valid point.
With regard to another part of your presentation, do you think those involved with you in contract negotiations today would still require the need of protection for 50 years?
Ms. Foster: I hope so because the National Arts Centre will still be vibrant in 50 years.
Senator Milne: I retire defeated.
Mr. Godbout, you suggest that the application information that comes into you under this bill would have to be made public. What are you suggesting should be changed in Bill C-2?
Mr. Godbout: At the application stage, it will not be made public. You cannot make these applications public, pretty much for the same reason. No one will apply. We are in the scientific field where there is a lot of intellectual property involved. Thus the economic impact is huge, which is pretty much the same as donors to not-for-profit organizations. They simply will not apply. They do not want their research project to be divulged at large, not only nationally but internationally. We protect that part under confidentiality. We ensure that those who review the projects are also bound by confidentiality and conflict of interest. You do not want a $20-million project to be reviewed by someone who has an interest it and who then steals the information and publishes or patents it ahead of Canadians.
Two weeks before the review is done we provide to the investigator the name of those who will review the project. We provide the names of all on the committee. However, the scientists do not know who in particular is reviewing their project. If you have a committee of 15 to 20 people, certainly four or five people will review your project. You know the names of the 20 but you do not know who exactly is reviewing your project.
If the investigator feels there is a potential conflict of interest, they still have two weeks to notify us and, to be fair and equitable we will ensure that those individuals do not review the projects.
There is a full report which is provided to Genome Canada after the review. It is analysed by the board for final approval. These reports are made public. We allocate public funds. The final report is open to the public. They do not have to request information under the provisions of the Access to Information Act. They know 24 hours after the board's decision which projects will be funded and why. It is very transparent.
Senator Milne: That is what you are doing now. It is your present practice.
Mr. Godbout: Yes.
Senator Milne: Will that change under this new bill?
Mr. Godbout: It will not change.
Senator Milne: Ms. Greene, are you aware of any documented instance of where an access to information request has interfered with contractual or other negotiations of a government institution?
Ms. Greene: When I was a public servant many years ago in a large department with a lot of procurement and commercially sensitive information, that there was a lot of contest — if I can put it that way — over how much of that information could be disclosed. Access to information applied to the Department of Transport and these commercial contracts contained a lot of commercial information. It created a lot of friction, a lot of toing and froing. As you know, there is a whole access to information industry waiting and ready to go with a whole new group of organizations that can be tapped for new information.
I do not recall personally that the department ever disclosed information that would have been harmful. I recall working hard daily to ensure we did not do that. I recall a huge amount of conflict with regard to how information could go out. There were ridiculous situations where half sentences of reports would be released.
Senator Milne: I am looking at clauses 146 and 147 of the bill. Is Purolator Courier the only subsidiary of Canada Post that would be affected by the exception outlined in clause 147?
Ms. Greene: No: We have other subsidiaries that have minority interests. For example, Innovapost has private- sector participants. Intelcom has a minority interest as well. A couple of other subsidiaries that have minority interests would not be subject to the act.
Senator Comeau: Ms. Greene, Canada Post is indeed a big corporation, but unlike many corporations that are traded on the stock market, the Canadian taxpayer is the direct investor in Canada Post. Even though it is recognized that Canada Post functions in a competitive environment, the taxpayers need to have confidence in the corporation for it to be viable over the long term. I understand that you see the need for clarity on access to information and to regain the confidence that has been lost by your predecessor. Your predecessor received an annual salary of $310,000, a supplementary indemnity of $107,000, an annual bonus of 25 per cent of his base salary, a vehicle allocation of $30,000 — which is roughly the average salary of a Canadian, payment of all his club and association fees, $46,000 at the end of his contract and $7,500 for employment counselling. As well, there were unsubstantiated expense claims of $2 million during his term.
That situation is probably what led to the requirement for measures to ensure that this kind of thing does not suddenly enter the public domain as a surprise.
Are these kinds of deals made with current employees? Can Canadian taxpayers feel confident that this kind of contract for salary is not being awarded now?
Ms. Greene: With the greatest of respect, I do not understand what that has to do with this issue at all. It is my understanding that the salary range in personal contractual arrangements of senior executives is made public. It has always been made public for executives of banks. In any prospectus you will see the salaries of the top four or five executives. Their salaries are made public under securities legislation, but I do not think that the bill is directly aimed at the details of the employment contract. I think it is aimed at much more substantive notions of transparency. It is aimed at ensuring that the corporations are governed in a proper way and that measures are taken to disclose appropriate information and to protect appropriate information.
I do not think it would be appropriate for me to get into a discussion about an individual's employment contract. I think that is personal information.
Senator Comeau: This information is not currently available?
Ms. Greene: I do not think all that information is available under access to information. Salary ranges, which have always been available, would be, but I do not think the contents of an employment contract between a senior executive and a fully commercial entity such as Canada Post or Export Development Canada would be. I do not think that would be the purpose of the Access to Information Act. I would want advice from legal counsel, but I see that as personal information and not at all inside the purview of access to information.
Senator Comeau: Are the entitlements of a president personal information between the president and the board that decides on the contract?
Ms. Greene: I do not see any change in that. I believe that the purpose of the Access to Information Act is to ensure that the business processes carried on inside a corporation, processes critical to carrying out the mandate of that corporation — shares of that corporation which are held by the government — are as transparent as they would be in a private sector corporation that is subject to requirements for disclosure under securities legislation or Sarbanes-Oxley.
In any sphere there is such a thing as personal information. I do not think that access to information would pertain to matters of privacy. I fact, I think there was a Supreme Court of Canada ruling on that as recently as March that said there is such a thing as privacy in Canada and that is not the purpose of access to information.
Senator Comeau: I think I have the message. The salary of the president is private.
Ms. Greene: No, with respect, that is exactly what I did not say. I said the salary range that applies to presidents of Crown corporations is now available, has been available in the past to my knowledge, and will be available in the future — although I am a relatively new CEO of Canada Post. The Order-in-Council information on the salary ranges of senior executives of anyone associated with the Government of Canada is available, I believe. However, I believe that the detail of the employment contract in place for executives is personal and private.
Senator Comeau: Are you talking about things like bonuses, and so on, apart from salary?
Ms. Greene: Yes. It is apart from the salary and it is all negotiated, as you know, by the Privy Council Office on behalf of the Crown. I would think that there is a certain measure of information that is not the kind of information that the Access to Information Act is all about. It is personal and private information.
Senator Comeau: Okay; that is fine.
[Translation]
Mr. Godbout, you said that you are not subject to the Official Languages Act. Is that correct?
Mr. Godbout: It is.
Senator Comeau: Is there a reason why Genome Canada should not be subject to the Official Languages Act?
Mr. Godbout: As a corporation, unlike a federal department, agency, Crown corporation or foundation, Genome Canada is not subject to the Official Languages Act. But under the agreement signed with Industry Canada, we will be subject to it. We are required to publish all our documents and contracts in both official languages. From a legal standpoint, we are not subject to the Official Languages Act, but through our contract with the government, we are.
Senator Comeau: Why did Industry Canada not make Genome Canada subject to the Official Languages Act?
Mr. Godbout: I believe it is really a legal matter. Genome Canada is not part of the government. Would it be appropriate to ask the Canadian Red Cross to be subject to bilingualism laws, as a corporation? I do not think so. But if Health Canada has a duly executed contract with the Red Cross, in the actual contract, they can be asked to prepare all documentation in both languages.
Senator Comeau: Should we not consider the fact that parliamentarians must vote appropriations of public money for Genome Canada and that this is a country that respects both of official languages?
Mr. Godbout: I fully agree with you.
Senator Comeau: And the contract you have with Industry Canada says that you are not subject to the Official Languages Act?
Mr. Godbout: No, it is the opposite. Section 17.1 of the contract reads as follows:
[English]
Section 17.1 of the Amended and Restated Funding Agreement between the Government of Canada and Genome Canada states,
Genome Canada shall provide its communications and services to the public in at least both official languages of Canada, (French and English) in accordance with the spirit and intent of Part IV of the Official Languages Act...
[Translation]
Therefore, under this contract, we are required to abide by the act. If we had no contract with Industry Canada, Genome Canada would not be subject to the act. I am providing a very legalistic answer to your question. Canada Post is automatically required to abide by the act because it is a government institution.
Senator Comeau: And you are subject as a result of this contract.
Mr. Godbout: Yes, and we comply fully.
[English]
Senator Day: There was reference to section 17.1 in the contract. I misunderstood that.
Senator Zimmer: I think my question might have been answered while I was out of the room. It was courageous to accept the act in that there are a lot of competitors around the world. There are a lot of competitors around the world and you handle a lot of pieces of mail around the world. Are you not concerned that they will get some inside information and use that against you as a competitor?
Ms. Greene: Absolutely, we were concerned and for that reason, we wanted to be very careful. As you know, we have some competitors that are extremely vigorous about finding out about our commercial contracts, and have many ways of doing it, including trade complaints under NAFTA; you name it. We have some pretty creative competitors out there and they are not subject to access to information.
Senator, I have looked at this carefully and having met with many of our customers and suppliers. I am satisfied that the protection that the act will afford us for commercial information is satisfactory, as long as the corporation is given enough preparatory time because of the volume of records that we are talking about. To put this in context, we have 150 million parcels that are fully competitive business. It is a $1.3 billion business and these are parcels that are being carried for some of the largest and most important corporations in the land. I want to be sure that I have enough time to prepare our organization. The same is true for the direct marketing mail. As honourable senators know, direct marketing mail is a huge business in Canada. I am pleased to tell you that Canada Post is probably the largest participant in that business for Canadian companies like Rogers and Bell, and great names like Citibank, which is one of our largest direct marketing mail customers. It is about a $40-million-a-year customer to Canada Post. Before you do anything that might in any way jeopardize a revenue stream and relationship with companies of this importance, they see Canada Post as a great partner to help them deepen relationships with existing customer bases or to acquire new customers. That is how these are growing in partnership with Canada Post. All of these things weighed heavily in our consideration of the bill, honourable senators. I am satisfied that if we get enough time to prepare and to go through the volumes of records, with the expertise that we will be retaining to help us in this matter, we will be successful in managing these new responsibilities.
Senator Zimmer: It speaks volumes of your organization and the confidence that you have in it. As they say in the industry, bring it on. Good luck. I wish you the best in your endeavours.
The Chairman: Honourable senators, Senator Joyal has made a declaration of private interest regarding the National Arts Centre. In accordance with the Rules of the Senate, the declaration that he made shall be recorded in the minutes of the committee. I now turn the floor to Senator Joyal.
Senator Joyal: Ms. Greene, maybe through your legal advisor, I would like to come back to the understanding of clause 147 of the Access to Information Act, at page 119 of the bill. Clause 147 states:
147. The Act is amended by adding the following after section 18:
18.1(1) The head of a government institution —
And, I underline the words I would like you to interpret for us. The proposed section continues to state:
— may refuse to disclose a record requested under this Act that contains trade secrets or financial, commercial, scientific or technical information that belongs to, and has consistently been treated as confidential by,
(a) The Canada Post Corporation;
From the day this proposed legislation is enacted, receives Royal Assent and comes into force, you will be governed by that exception.
Ms. Greene: That is correct.
Senator Joyal: That is, by that capacity that you have, 'may'.
Ms. Greene: To treat as confidential that which —
Senator Joyal: That you could refuse to disclose. That is a decision not to do so.
Ms. Greene: That is correct.
Senator Joyal: It is a negative decision not to disclose a record that contains financial information that belongs to you. The word ``belongs'' is important. It means information over which you have total control. That is the way I interpret ``belongs,'' unless I am mistaken on your interpretation.
Ms. Greene: No, I share your interpretation.
Senator Joyal: It is not information that could be held by a third party.
I will give you time to reflect upon this. The word ``belongs'' has legal meaning here. In French, the word ``belongs,'' or ``appartient,'' legally means that you are the owner of that record: it belongs to you. If I say this information belongs to you, it means that it is your property. There are elements of control over the information.
Ms. Greene: I agree.
Senator Joyal: We do not depend on someone else for it.
Then, the word ``consistently'' is an important adverb. It qualifies the time that you have been holding that information, and then ``has ... been treated as confidential.'' In other words, you have internal procedures that make this information confidential.
Mr. Power, you are the lawyer for Canada Post. Tomorrow, you must prepare a circular for all the top brass of the Canada Post Corporation, and down the pyramid. What kind of interpretation will you give so that people in the Canada Post Corporation know the new system under which they will now operate?
Mr. Power: Thank you, senator. I would not restrict myself to the proposed section 18.1 of the Access to Information Act. The act today contains protection for third-party information. Therefore, in providing advice to my colleagues within the company I will provide advice that says, not only do we have an obligation as officers and employees of the company to treat confidential information confidentially, and to do so consistently, but also I will include a reminder the we also have an obligation with respect to treating the information of our customers and our suppliers confidentially.
The application of the act to Canada Post Corporation will mean that if we receive a request for access to information that is the information of a third party, we must give the third party notice. That has been of concern to Canada Post because we know that some third parties, some of our customers, while they may have confidence that they will not have to disclose the information in the end, would rather not be required to go through the efforts of defending why their information should not be disclosed.
So there would be two parts to the communication: reminding people of their obligation to maintain confidence, and also the confidence with respect to the information of our customers and suppliers.
Senator Joyal: Besides the protection that is given to third parties in the Access to Information Act — and it is appropriate to state it — but this exception might address the question raised by Senator Comeau.
Let us put again the question of Senator Comeau. You may refuse to disclose the record and financial information that belongs to you, so the records are in your file. No third party has access to it; the information does not involve a third party per se. Let us take an example. Because you will have unions, there is no question that the union will look at that exception, to seek information.
Then you will have to interpret ``belongs'' and ``consistently been treated as confidential.'' In other words, you would have to exercise judgment on your internal past practice over matters and subjects that you have treated as confidential.
Ms. Greene: That is correct, senator. The way this provision is drafted causes us to think about how we have treated information in the past, and it causes us to think about at what point the information is ours that requires our treatment of it in a confidential way. It also requires us to think about whether we treat the information now in a consistent way, relative to what we had done in the past.
There is no doubt that, just like in my public-official days 12 or 15 years ago, there will be much toing and froing in many cases, and lots of sentences will go out without a verb or a predicate. The truth is, we think, with a lot of training and a lot of preparation, and it helps that I have some familiarity with the administration of access to information requirements, we will manage it.
I believe your question is, do I not find this ambiguous, and do I not find this difficult as a duty that is now imposed, upon which we can carry out effective training of all our people? That is a good question, senator, and we have thought about that inside the company quite a bit. On balance, I think it is fine. I am not saying there will never be any argument about what particular provisions in this bill mean. I suspect there will be, just like in the access to information legislation that was passed in the late 1980s, if my memory serves me well.
As you know, senator, many cases were litigated and that litigation helped us, over a period of time, to gather a body of law and gain a better understanding as to what that legislation actually meant: what was the scope of the duty to disclose that it imposed, and what was the scope of the duty to protect.
I believe the same process will happen here. However, we have the advantage that this legislation will at least be able to piggyback on the development of the law over the past 15 to 17 years.
I believe the thrust of your question is: Are you worried about the ambiguity in that, and will the ambiguity prevent you, in the preparation that you are about to undertake to train all our people and become more cognizant of the requirement? The answer is no. I agree that there is ambiguity, but the level of ambiguity is manageable.
Whatever might be the date of the coming into force of the act generally, I hope that it will come into force at a later date for Canada Post Corporation. Therefore, with the time I hope you will give us, we will be ready. Then I guess the contests, the debate and the argument over what is and is not protected will take place in other fora.
Senator Joyal: If I understand your explanation, when you say that you need to train your executive and the other persons who are involved in management...
Ms. Greene: Actually, about 7,000 people have records in Canada Post.
Senator Joyal: You definitely will need to establish guidelines, rules and an interpretation of that section.
Ms. Greene: Yes.
Senator Joyal: People need to be well aware of the limits of what is available to the public and what will be made available to the public from then on. They need to know which part of the information or the records, on the basis of the criteria that are included in proposed section 18.1, could remain confidential and which part you could refuse to make public even though you get a request. They need to be in a position to argue that their decision was based legally on the parameters of section 18.1.
Ms. Greene: We think so. Where we need to protect information, the language of that section is satisfactory. As you know, language is a frail thing, senator.
You may not remember this, but many years ago I had a discussion with you. You were particularly good at this on another piece of legislation.
Senator Joyal: I will have to declare another conflict!
Ms. Greene: This was many years ago, senator. Language has its frailties, and even with the most precise drafting expertise by your side, and even with years of development in a body of law, there will be times when the very same word which was used on many different occasions will take on a different colour and lustre, so it does, in fact, give rise to a new development in the law.
That said, we are satisfied, after giving it a lot of thought, that if we have the time that we need to prepare and to train, we can work with this.
Senator Joyal: To prevent additional problems, I will move on to Mr. Godbout.
Senator Day: Will you declare your interest now?
[Translation]
Senator Joyal: Mr. Godbout, we heard previously from the President of the Canada Foundation for Innovation, Mr. Eliot Phillipson. His primary concern is that the exceptions set out in the Access to Information Act provide protection for individuals, rather than institutions.
I understand that you also deal with institutions. Should you not have the same concerns as your colleague from the Canada Foundation for Innovation, who is seeking to ensure that the identity of those who deal with Genome Canada — in particular, the people who review the applications — will remain confidential?
Mr. Godbout: That is a very good question. I am aware of the claims made by Mr. Phillipson. As an organization, Genome Canada is, however, different from the Canada Foundation for Innovation. A document dealing with the Accountability Act and the government's Action Plan was recently published, and it states:
[English]
To promote a culture of openness and accessibility, the government will strengthen access to information legislation.
[Translation]
The Canada Foundation for Innovation is mentioned there. Genome Canada is not mentioned, however. Once again, Genome Canada is not involved in the implementation of Bill C-2, as other foundations may be.
Genome Canada has its own code of ethics and its own transparency rules. As an organization, it has signed more than 67 contracts with various universities and companies. The contract is a standard contract and is known to the organizations.
I do not believe Genome Canada would have any problem with reporting contracts signed with universities and corporations, insofar as intellectual property is protected.
Senator Joyal: On the left hand side of your agreement with the Treasury Board dated March 30, 2005, the heading is ``Internal Governance, Policies and Accountability.''
Mr. Godbout: That is correct.
Senator Joyal: In the chapter on accountability, there is reference to the ``Lobbyists Registration Act.'' Your agreement includes a very specific provision and articles 20.12 and 20.13 are the relevant provisions, but you do not refer directly to the Access to Information Act.
Mr. Godbout: That is correct.
Senator Joyal: Nor do you have an absolute obligation to ensure that your bylaws govern conflicts of interest involving your examiners. Perhaps you have taken that obligation on of your own volition, but I am trying to identify in which chapter you would have to ensure that your examiners do not have a conflict of interest and that the necessary confidentiality will be maintained, as you explained in your opening presentation.
Mr. Godbout: Confidentiality is dealt with under article 11, and conflict of interest, under article 4.6 and 18.
Senator Joyal: Could you read them out for us, so that they are part of the record of today's proceedings?
Mr. Godbout: With respect to conflict of interest, I will read out article 18.1:
Genome Canada shall include in its by-laws provisions that...
Under our contract, we are asked to go as far as our Letters Patent. We cannot go any higher than that.
[English]
(a) entitle an Eligible Recipient that has made a proposal for an Eligible Project to Genome Canada to request the Board to make a ruling as to the possible conflict of interest of a director on the Board in the consideration or disposal of the proposal; and establish procedures to be followed by the Board in responding to the request and giving the ruling.
[Translation]
Senator Joyal: That relates to conflict of interest.
Mr. Godbout: Genome Canada receives money from the government and must invest it. We also have to ensure that people responsible for managing that money do not have any conflict of interest. That is set out in article 4.6. Confidentiality is dealt with in article 11.
[English]
Genome Canada shall develop a policy relating to confidentiality which shall define what constitutes confidential information, the treatment to be given to such information and the circumstances under which such information may be disclosed by Genome Canada, Eligible Recipients and officers, employees, agents and representatives of Genome Canada, Eligible Recipients or other Persons. Genome Canada shall set out its confidentiality policy in its bylaws.
[Translation]
Industry Canada has responsibility for ensuring that Genome Canada abides by all the confidentiality and conflict of interest rules. To that end, we have been asked to record that in our Letters Patent. That is the reason why you see a connection between articles 11 and 25 in the document you have in front of you.
Senator Joyal: And are you subject to performance evaluations by the Auditor General of Canada?
Mr. Godbout: Yes, and that happens at her request. I could read this out to you: it is article 8.5. This has prompted a great deal of debate over the last three years, because the Auditor General did not have access to Genome Canada. The latest agreement reached with the government states the following:
[English]
Each of the Minister and the Auditor General may require that an audit of the books and records of Genome Canada be carried out, at their respective expense, by such person as the Minister or the Auditor General may appoint to ensure compliance with this Funding Agreement. Genome Canada will cooperate and provide access to the appropriate records to conduct such an audit. The Minister and the Auditor General, as the case may be, may share a copy of the resulting report with Genome Canada and agrees to discuss any concerns raised in the audit with Genome Canada.
[Translation]
One could even interpret this to mean that they have the right to make that public if they so desire, since it is the minister or the Auditor General doing the reporting and it is done at their request.
Senator Joyal: Under article 8.6, it says that the minister may choose to conduct his own evaluation, and article 8.7 talks about performance audit.
Mr. Godbout: Yes.
Senator Joyal: So, you are subject to more than one contribution audit.
Mr. Godbout: Absolutely.
Senator Joyal: In practice, it is simply a matter of determining whether the decision was the right one from an objective or a professional standpoint. It is possible the money was used properly, according to accounting standards, but in actual practice, the project was a bad project, and article 8.7 makes it possible to assess the project from that standpoint.
Mr. Godbout: We are responsible. If a project is failing, we do not have the right, as trustees of the government's money, to let it continue. We have procedures in place to end or expedite such projects.
Just for you information, in the documents we sent to you, you have Genome Canada's corporate plan. On page 22 of that plan, the heading is ``Performance monitoring and accountability.'' The graph you have here gives you an idea of the number of audits that have been carried out and that will be carried out over the next few years.
With respect to accountability, looking at this you can see that we have people who have been hired to do nothing but that, which is perfectly normal, and we have no complaint. That is due to the fact that we receive government funding and depend on that funding.
If you are the president of a company listed on the stock exchange, you are accountable to your shareholders. Well, it is the same for us, the shareholder in our case being the government and other foundations. We receive funding in the order of 15 billion pounds sterling from the Welcome Trust Foundation in England. We also have to be accountable to other foundations.
So this gives you an idea of the audits, annual reports and performance reports that are involved. Very few organizations are subject to performance audit.
[English]
Senator Day: It has been a long afternoon but we appreciate your coming out to help us. I would like to start with the National Arts Centre. I have been looking at the bill before us. I also have a copy of the Access to Information Act. I cannot see where the National Arts Centre falls under this legislation. Can you help me with that? I know you did not bring your lawyer, but that is good.
Ms. Watson: I do not have a copy of the bill with me. I believe in the appendix the National Arts Centre is identified as one of the new Crown corporations to be made subject to the Access to Information Act.
Senator Day: There is a new Schedule I, which is where I should look.
The Chairman: It is under the definition, ``Government Institutions.''
Senator Day: I was getting to that. I am not sure it is.
The Chairman: I do not want to anticipate.
Senator Day: You can, if you like.
In the bill itself, many companies, organizations and departments have been cut out. On page 124 of the bill, it states:
Schedule I to the Act is amended by striking out the following....
All kinds of institutions and organizations are struck out.
The previous legislation always directed the reader to Schedule I. The previous legislation said, ``Those who are subject to the Conflict of Interest Act are those listed in Schedule I.'' There is now a new definition of government institution: ``any department or ministry of state of the Government of Canada, or any body or office, listed in Schedule I....''
Is Schedule I the Schedule I that is in the act or do you have a new Schedule I? On page 116 is the definition of government institution. It is government institutions that are subject to the Access to Information Act.
Ms. Watson: As I understand it, the Access to Information Act is a separate piece of legislation.
Senator Day: Yes, the Access to Information Act is amended by Bill C-2. The part we are looking at here starts at page 116 of the bill. There is a change in the definition of government institution. Later on in this bill there is a change in the schedule. A number of foundations and various offices are added to Schedule I.
I would like to find the National Arts Centre.
Actually, I would rather we did not find the National Arts Centre.
Can I tell you what I have been told and then can you tell me whether you think that sounds good?
Government institution means any parent Crown corporation and any wholly owned subsidiary of such a corporation within the meaning of section 83 of the Financial Administration Act. Would that catch you?
Ms. Foster: The National Arts Centre is a Crown corporation.
Senator Day: So that definition brings in the NAC?
Ms. Foster: But could we make an accommodation?
Senator Day: I was trying to bring my mind around this whole thing. Section 3 of the Access to Information Act has been amended in this bill. That makes it clear. I now understand how the NAC is included. Now I know why you need certain exemptions.
I understand the section that you are looking for used to be section 20.1. I understand that was taken out in the manner you described earlier by an amendment by NDP member Pat Martin who came into the meeting late, had it removed and you did not know anything about it. I think that is all I need to know from you. Thank you.
I am sympathetic to your position.
Does Canada Post Corporation fit within one of these definitions?
Ms. Greene: We are a Crown corporation, yes.
Senator Day: You are a parent Crown corporation.
Ms. Greene: That is correct, senator.
Senator Day: Welcome to the Access to Information Act. I understood that what you are concerned about is the implementation date.
Ms. Greene: The date upon which it will apply to us, that is correct, senator.
Senator Day: Can we go to Genome Canada? I have been sitting here for some time trying to figure out why you are in here and now I have that clear in my mind. Is Genome Canada a Crown corporation?
Mr. Godbout: No.
Senator Day: You are not one of those other things here. You are not a department or a ministry either.
Mr. Godbout: That is why I stated at the beginning that we are not a foundation by an act of Parliament. We are not a Crown corporation. We are not an agency or a department. Our legal obligation with the Government of Canada is through a funding agreement that we signed recently.
Senator Day: I understood your dialogue with Senator Joyal.
Mr. Godbout: That is correct.
Senator Day: Your obligation to follow the Access to Information Act is based on a contract that you have with Industry Canada, is that right?
Mr. Godbout: It is more complicated than that. We have no obligation to follow the Access to Information Act, legally speaking.
Senator Day: That is my point. What about statutorily speaking?
Mr. Godbout: The Government of Canada, through Industry Canada, can ask at any time to have access to our books. If there is a request under the Access to Information Act through Industry Canada, as has happened in the past, we reply within 48 hours.
Senator Day: That is according to your funding agreement, which is a contract.
Mr. Godbout: Exactly.
Senator Day: You have taken on obligations in a contract. There are no statutory sanctions if you do not follow them; there are contractual sanctions.
Mr. Godbout: That is correct.
Senator Day: Therefore, you should not be looking for any amendments in this bill.
Mr. Godbout: I am not.
Senator Day: And we should not be thinking about them. That is perfect, thank you. However, it has been nice to have you.
Senator Cowan: I wish to follow up on a point that Senator Joyal made with Mr. Godbout about the identity of the reviewers and why you did not share the concerns that have been expressed to us earlier by CFI. I thought the answer might be that in your case, as I understand, you have a panel of reviewers. An applicant simply identifies anyone on the panel who they think might be in conflict, and that person will not review. However, the applicant still does not know which of the panel will be reviewing the application.
Mr. Godbout: That is correct.
Senator Cowan: It seemed to me that in CFI there was not such a panel. There is a single reviewer and to disclose the name of that reviewer would create some concern. Is it the panel concept that gives you comfort?
Mr. Godbout: I cannot answer for CFI, but in our last round of competition, we had 53 reviewers from around the world in one room. The applicants had the list of the 53, but they did not know which ones reviewed their project. That is to protect the reviewers and the applicants.
Two weeks in advance, we send the applicants a list of the 53 and ask whether they see any potential conflict of interest or have any concerns about confidentiality. If the applicants feel that Dr. X or Ms. Y is in a potential conflict of interest, we act accordingly.
The reviewers have to sign a legal form regarding confidentiality and conflict of interest. We protect the applicants and we protect Genome Canada against any lawsuits because, as you know, it is a competitive process. Not all the applicants receive funds and those who do not receive funds are the ones who complain.
Senator Cowan: It is just a different methodology for selecting the reviewers.
Ms. Greene, I understand that you mentioned the implementation schedule when you appeared before the House of Commons committee.
Ms. Greene: Yes.
Senator Cowan: What response did you receive in that committee? Did you have any consultations with government before the introduction of the bill, at the time of your presentation to the committee or subsequent to that about whether the government might be prepared to look at phasing this in or giving Canada Post a reasonable period of time to reach the point of compliance?
Ms. Greene: We have had some discussions, but I will go back. We did not receive any opposition to that point, as I recall, when we were before the House of Commons committee. It seemed to be a point that people understood, given the scale of the company. We did not dwell on it and I do not recall there being any questioning on that point.
Senator Cowan: Did you ask them, as you have asked us, to provide that time to prepare?
Ms. Greene: Yes. We were very clear; we said we would need time to prepare.
Senator Cowan: There was no undertaking?
Ms. Greene: There was no undertaking. I do not remember it being the subject of any queries. I do not think there was a single question on it. There were other questions, but none on that. Mr. Power had certain discussions. We pressed that point home with some officials in the Treasury Board of Canada before the summer break. I am not sure that they have as full an understanding as you now have of the scale that is involved for Canada Post. I believe that Senator Joyal understands this, having experience in various other places.
Mr. Power, please fill the senators in on conversations you have had.
Mr. Power: Our conversations have suggested that there is an understanding that the coming into force would not be on Royal Assent for all parts of the act and that we would be given some time. There is an ongoing debate as to how much time. Some people have said that we have known that this bill was coming forward since April and therefore we should be ready for it now. We have been preparing for this and we have engaged people to help us find the people we need to do the work. It is not that we are waiting for the bill to pass through both Houses and to be given Royal Assent before we start to do anything. We have taken this seriously but we are not being given the sense that there is an understanding that we need this 18-to-24-month period in order to be ready. It is the enormity of records that is the problem.
Senator Cowan: I understand your point and I do not want to go over that ground again. It is your understanding that there is an acknowledgement and acceptance of the fact that there will have to be a differentiation in terms of the coming-into-force date for various entities?
Mr. Power: No. It is, rather, that for all entities there would be a time for coming into force and it would not necessarily be immediately upon Royal Assent.
Ms. Greene: They would treat a 200-person organization the same way as they would treat a 71,000-person organization. They would treat an organization that has a small amount of commercial consideration in the same way as they would treat a $7-billion commercial corporation with 155,000 commercial —
Senator Cowan: Without going over that ground again, your sense is that there is a recognition that there would have to be a date in the future when it would come into force?
Ms. Greene: Yes.
Senator Cowan: Your understanding of the current thinking is that there will be a date in the future, but that date would be the same for all entities regardless of their size.
Ms. Greene: Yes.
The Chairman: Since April, have you started your preparations?
Ms. Greene: Yes.
The Chairman: Are you substantially under way and are you still asking for an additional 24 months?
Ms. Greene: Not necessarily 24 months. Eighteen months would be acceptable. Yes, we have started and are well underway. We have been documenting all of our records; ensuring that our policies and practices on confidentiality are well known. We have been ensuring that there is consistency in all our policies and practices between things like conflict of interest, whistle-blowing and our obligations under this act. We have been developing a training regimen for the people who deal with records in our company and we are starting to plough through the commercial considerations and training our sales force to let people know that this is coming. We are currently actively recruiting for a senior official and for training officials. We are not lying down.
The Chairman: Honourable senators, I want to thank the National Arts Centre, Canada Post and Genome Canada for coming here this afternoon and making their positions on Bill C-2 well known to us.
Before closing, I recognize Senator Stratton.
Senator Stratton: With respect to the point of order raised by Senator Day this morning concerning no response by the Conservative Party of Canada, I will read a letter into the record. Perhaps, chair, you will allow this?
The Chairman: Yes; thank you very much.
Senator Stratton: This letter is from Mike Donison, the Executive Director of the Conservative Party of Canada. It is dated today, September 20, 2006, and it is addressed as follows:
The Honourable Senator Donald Oliver
Chair, Senate Committee on Legal and
Constitutional AffairsRe: Committee appearance on Bill C-2.
Dear Senator Oliver:
This letter follows up on two matters relating to my appearance before the Senate Committee on Legal and Constitutional Affairs on September 7, 2006. First, I wish to provide additional information requested by the Committee regarding convention attendance and fees. Second, I want to correct erroneous allegations raised at Committee and reported in the media this morning that insinuated my testimony misled the Committee about recent dealings with Elections Canada regarding our convention.
Convention attendance
Our records indicate that 2,679 people attended the Conservative Convention as delegates, alternates and member observers. Depending on status (delegate, observer, student or not, et cetera), and time of payment (i.e., ``early bird'' or not), the fee charged ranged from $299 to $600.
Dealings with Elections Canada
Senator Zimmer asked whether the Conservative Party complied with the request from the Chief Electoral Officer to provide further information concerning our Convention. In reply, I referred to a Party statement issued on June 29, 2006 and then went on to say ``this matter is in fact with Elections Canada and we are working through it.''
To be clear — allegations filed by the Liberal Party of Canada were filed with the Commissioner of Canada Elections not the Chief Electoral Officer. The Commissioner of Canada Elections is the independent officer responsible under the Canada Elections Act for compliance and enforcement of that Act.
Subsequent to his request for such information by way of a Press Release on June 29, 2006, Mr. Kingsley's office confirmed to us that the matter is now with the office of the Commissioner of Canada Elections and further dealings would be with the latter office not Mr. Kingsley's. We subsequently received a letter from the Commissioner's Office confirming that they had carriage of this file and we are now in fact dealing with them. That is what I meant by ``working through Elections Canada.''
In short, the Liberal Party chose to escalate this matter into a complaint to the Commissioner, which is why Mr. Kingsley's office has not received, and will not be receiving, information from us on this matter as we are dealing with the Commissioner's office, exactly where the Liberal Party placed the matter.
In their complaint, the Liberal Party effectively asserted that Canadian taxpayers should fund their conventions by the receipting convention delegate fees even when the convention breaks even or loses money. This approach is using taxpayers to further subsidize political parties and the Conservative Party does not agree with that approach.
I did not mislead the Committee and I trust that this letter ends any confusion to the extent there is any.
Yours truly,
Michael D. Donison
Executive Director
Conservative Party of Canada
I will file that in both official languages with you, Mr. Chairman.
Senator Day: I would like to thank Mr. Donison in being so prompt in getting us this information. The next to the last paragraph is an indication that there is still clearly a difference of opinion as to interpretation and we should await the letter that we have requested from Mr. Kingsley's office to clarify the statement that he made after he left here yesterday. I look forward to that.
The Chairman: Honourable senators, that brings this committee meeting to an end. We will now adjourn until nine o'clock tomorrow morning. The witness at that time will be Jennifer Stoddart, the Privacy Commissioner.
The committee adjourned.