Proceedings of the Standing Senate Committee on
Foreign Affairs

Issue 32 - Evidence

OTTAWA, Tuesday, April 22, 1997

The Standing Senate Committee on Foreign Affairs, to which was referred Bill C-77, concerning an order in council under the International Development (Financial Institutions) Assistance Act, met this day at 4:13 p.m. to give consideration to the bill.

Senator John B. Stewart (Chairman) in the Chair.

[English]

The Chairman: Honourable senators, I call the committee to order. We have for consideration Bill C-77, concerning an order under the International Development (Financial Institutions) Assistance Act. That bill was read the second time in the Senate this afternoon.

We have with us today two witnesses from CIDA: Mr. Mark Gawn, Program Manager with the International Financial Institutions Directorate, and Mr. Roch Levesque, Counsel.

Those of you who heard the second reading debate in the Senate probably know what the bill is about. Is it reasonable to assume that members of the committee know the substance of the bill, or do you want us to go over it again?

Senator Corbin: I want to make sure these people say the same thing as was said in the house.

The Chairman: All right.

Senator Corbin: I have a question. Is the Royal Recommendation attached to this bill?

The Chairman: This bill does not appropriate money, so there is no need for a Royal Recommendation.

Please proceed.

Mr. Roch Levesque, Senior Counsel, Canadian International Development Agency: The International Development (Financial Institutions) Assistance Act gives us the authority to add to the schedule international financial institutions which can be funded by Canada. An amendment to the schedule to add an institution that is to be funded by Canada is done by order in council. The first order in council was approved by the Governor in Council in November, 1994, and a oversight was made. Everyone thought it was in force, like every other order in council. The problem is that the International Development (Financial Institutions) Assistance Act has an unusual provision in it which we do not find very often. It says that an order in council must be laid before Parliament not later than the fifteenth sitting day of Parliament after the order in council is made, and then it comes into force after another delay.

Some payments were made to two institutions, the Montreal Protocol and the Global Environmental Facility Trust Fund. Then we were told by the Scrutiny of Regulations Committee that the order in council was not tabled, and that any payments would be illegal. In the meantime, we hastened to make another order in council which was tabled in Parliament last December. At the same time, we took an act of Parliament to approve retroactively the illegal payments which were made. That is why we have this bill, to regularize payments which were made without any legal basis.

The Chairman: Illegal payments, in other words?

Mr. Levesque: Yes, payments made without specific authority.

Senator Andreychuk: I am rather thankful that we had in place a committee which caught this, and was careful about this sort of thing. Our involvement in the environmental protocol and how we would fund it was really a top priority. I can understand, when something has become routine, where you have a number of steps to go through, year in and year out, how it can get lost in the shuffle. However, this was a totally new initiative. It was an important initiative. There was a lot of discussion on it. How could this procedure have slipped through the cracks? Can we be assured that this is a one-of-a-kind situation, so unusual that it will never happen again? We see the cracks coming. To me, a good functioning system has a double check. The double check here was a parliamentary double check. Why was there not a bureaucratic double check so that this thing could not happen?

In the name of good governance, we have often told other countries that these things are so important that they should carry them out by the book, that they should involve their Parliaments, that their presidents should not just give us their assurance and then say, "Do not worry, I can get this through Parliament." We say we pay attention to those things in our country. In other words, I think the other problem is that we are not setting a good example.

How did it happen? Can you give us an assurance that it really is an aberration and not becoming routine?

Mr. Levesque: What I can tell you is that when an order in council is approved by the Governor in Council and published, it enters into force. I made a quick search, when we were told that this had happened, to see if this kind of provision existed in other acts. I have been told it that was rather unusual, but that there had been a few acts in Canada which have had this special provision where the order in council must be laid before Parliament, both the House of Commons and the Senate, and where it must then be on the books for a specific period of time before it enters into force.

I cannot say anything more, other than that it was an oversight, because I presume that people working on this at the time looked at the first page, which says that an amendment of a schedule is done this way, and did not go further because, as I say, it is unique.

Senator Andreychuk: However, it moves from CIDA to where, to the Department of Justice?

Mr. Levesque: It goes from CIDA to the regulation section of the Department of Justice. Then it goes to PCO and it is approved by PCO, by the Governor in Council. After that, it should have been tabled, as happened for the previous one last November, in the House of Commons and the Senate.

Senator Andreychuk: Your role was obviously managing the programs, as I recall. The role of the Department of Justice was to ensure what?

Mr. Levesque: The role of the Department of Justice was to draft the order in council and send it to the Privy Council Office for approval. It was mainly Legal Services and CIDA that were supposed to carry the ball and have it laid before Parliament.

The Chairman: Who is the responsible minister?

Mr. Levesque: Presently, it is Mr. Axworthy.

The Chairman: Who was it?

Mr. Levesque: Mr. Ouellet.

Senator Corbin: What is the significance of clause 2 of the bill, where it says that this bill will not apply to any action taken after?

Mr. Levesque: It was only to correct the past. We had some payments to make at the end of December and early this year, so we had another order in council approved in 1996. It was made; it was tabled in Parliament, including the Senate; and it came into force in February. After February, we had the specific authority to make any payment under that order in council. This bill is to cover specific payments which were made without the necessary authority last year, and the authority should not survive longer than required to achieve that purpose. No other payments will be made under this bill.

Senator Corbin: I would like to make a comment on Senator Andreychuk's comments. In spite of the fact that someone in the bureaucracy did not catch it, I am still amazed that these things do not happen more often. In view of the mass of paper and decisions that are shuffled around Ottawa in the course of a year, or in the course of a session of Parliament, it is still marvellous that in recent times, to my knowledge, we have had only two instances of this sort of thing.

Senator Andreychuk: That is why I say if something becomes routine, then it seems problems occur. I think any of us who have studied public administration are well aware of that fact, but here was an initiative that was a very unusual from a program point of view. We have had nothing previously similar to the Montreal Protocol and the models that were being proposed at that time. It was not one of those routine things that lawyers go through every day. It was unique, yet it did not seem to trigger a caution in anybody's mind.

I wondered what the role of the Department of Justice was. CIDA is the coordinator; it is their program and they are piloting it, but they turn the legal aspects over to the Department of Justice, whose role is to ensure that we comply with the law, not to worry about the program. This was a very unusual order in council.

The Chairman: On the matter of appropriation, as I understand it, money would have been appropriated by way of a normal appropriation bill for the international institutions, the names of which were set forth in the schedule. The problem was that the names of these two institutions were not properly in the schedule?

Mr. Levesque: Yes.

The Chairman: All right. I understand that, then.

Senator Corbin: How much money was involved here?

Mr. Mark Gawn, Senior Program Manager, International Financial Institutions Directorate, Canadian International Development Agency: There were two types of money, if you will. We fund our participation in the Montreal Protocol and the Global Environment Facility through the issuance of promissory notes that are non-budgetary items. We issued promissory notes that are covered by this statute to the tune of about $70 million. We made payments of about $9 million.

Senator Corbin: Thank you.

The Chairman: Honourable senators, is there anything more that you want to say?

Senator Stollery: It might be a good idea to deal with this quickly, because this is a relatively routine matter. I move that we approve the bill.

The Chairman: All right. The suggestion is that clause 1 stand as part of the bill. Is it agreed?

Hon. Senators: Agreed.

The Chairman: Shall clause 2 stand as part of the bill?

Hon. Senators: Agreed.

The Chairman: Shall the title stand as part of the bill?

Hon. Senators: Agreed.

The Chairman: Your motion is that I report the bill without amendment?

Senator Stollery: Yes.

The Chairman: Is that agreed?

Hon. Senators: Agreed.

The Chairman: Carried. Thank you very much.

The committee proceeded in camera.