Tories misinformed Parliament on G8 fund, may have broken law: auditor general

Canadian Press:

The Harper government misinformed Parliament to win approval for a $50-million G8 fund that lavished money on dubious projects in a Conservative riding, the auditor general has concluded.

And she suggests the process by which the funding was approved may have been illegal.

The findings are contained in the draft of a confidential report Sheila Fraser was to have tabled in Parliament on April 5. The report analyzed the $1-billion cost of staging last June's G8 summit in Ontario cottage country and a subsequent gathering of G20 leaders in downtown Toronto.

... The draft reveals that a local "G8 summit liaison and implementation team" — Industry Minister Tony Clement, the mayor of Huntsville, and the general manager of Deerhurst Resort which hosted the summit — chose the 32 projects that received funding. It says there was no apparent regard for the needs of the summit or the conditions laid down by the government.

Among the questionable projects funded were:

— $274,000 on public toilets 20 km from the summit site.

— $100,000 on a gazebo an hour's drive away.

— $1.1 million for sidewalk and tree upgrades 100 km away.

— $194,000 for a park 100 km away.

— $745,000 on downtown improvements for three towns nearly 70 km away.

The report provides campaign fodder for opposition critics who've long maintained the legacy fund was a thinly disguised slush fund for Clement to dole out federal largesse in his riding.

... The draft report says that in November 2009, the government tabled supplementary spending estimates which requested $83 million for a Border Infrastructure Fund aimed at reducing congestion at border crossings. But the government did not reveal that it intended to devote $50 million of that money to a G8 legacy fund, even though Huntsville is nowhere near the Canada-U.S. border.

... In the draft chapter on the legacy fund, Fraser notes the Appropriations Act stipulates that funding is supposed to be allocated based on the items presented in the estimates.

"This ensures that public funds are spent as authorized by Parliament for the purposes intended by Parliament," she writes.

"We found that money expended for the G8 infrastructure projects under the Border Infrastructure Fund were approved by Parliament without any indication that $50 million of the appropriations for border congestion reduction would be spent on G8 legacy projects.

"Therefore, in our opinion, Parliament was misinformed."

The report says the government disagrees with the auditor general's finding. Treasury Board officials maintain it's "normal practice" to aggregate expenditure information in the supplementary estimates and say it was done in this case "to avoid any delays that might occur if a new funding mechanism was created for the one-time (G8) event."

But Fraser says lumping the legacy fund into the border fund "created a lack of transparency about the purpose of the request for funding and, in our view, Parliament was not provided with a clear explanation of the nature of the approval being sought."

She adds that "this matter raises broader legal questions related to the use of appropriated funds by government. Parliament may wish to examine these competing interpretations to ensure that vote wording reflects Parliament's intentions."

The legacy fund was intended to help Parry Sound-Muskoka, the host riding represented by Clement, "enhance local infrastructure and showcase its natural beauty and support a safe, secure and successful hosting of the G8 summit."

The report notes that similar legacy funds have been set up in the past but the amounts allocated were much smaller. For instance, Quebec City got $4.5 million to host the Summit of the Americas in 2001. And Alberta's Kananaskis region got $5 million to host the G8 in 2001.

In an attempt to find out why $50 million was deemed necessary for Parry Sound-Muskoka, Fraser's auditors interviewed senior officials at Infrastructure Canada, Industry Canada, Foreign Affairs, the RCMP and the office responsible for co-ordinating security for the summit.

"Senior officials were not able to provide us with an explanation as they explained that their input was not sought as part of the process," the report says.

That proved to be a pattern as Fraser's team attempted to find out how projects were chosen and what possible support they might have provided to the summit.

Clement's local liaison team was responsible for identifying and proposing projects worthy of funding. To win approval, the team was supposed to work with Foreign Affairs' summit management office to ensure the proposed projects supported the needs of the summit.

"We asked the Summit Management Office to provide us with any documentation showing how they were involved in the review of projects but were informed that they were not involved," Fraser says.

Fraser's auditors also asked Infrastructure Canada, which provided the funds, for documentation demonstrating how the projects were chosen and how they fit with the purpose of the fund.

"The department was not able to provide us with any documentation as they were not part of the selection process and informed us they were not provided with supporting documentation when given the recommended list of projects to be funded."

Indeed, the report notes that Clement announced several projects would receive funding before the government actually spelled out the conditions for funding.

"We are concerned by the lack of documentation around the selection of projects for funding," Fraser says, adding that documentation is vital to "demonstrate transparency, accountability and value for money" in the expenditure of public money.

Fraser's team also examined the list of 32 projects that received funding but "(we) were not able to determine how they supported the needs of the summit or met the conditions set out by government."

For instance, the report notes the government devoted $26 million to create a Huntsville G8 Centre, which was supposed to be the command centre for co-ordinating logistics for the summit.

"We were informed that at the time of the announcement for this project, (Foreign Affairs) had already determined the centre would not be suitable as it was not expected to be completed on time," Fraser says.

In the end, other facilities were rented for the command centre.

The report is likely to turn up the heat on Clement, who's already been accused of funnelling disproportionate amounts of federal cash into his riding.

The Liberal party has calculated that Clement's riding has received about $92 million in federal infrastructure funding, including the legacy fund and other economic stimulus programs — more than four times the average $15 million to $20 million most ridings in the country received.

The Globe and Mail: millions mismanaged, Parliament misled

Two buildings that cost $27-million in the lead-up to last year’s G8 meeting in Muskoka have become symbols of a new political headache for the Conservatives as they fight an election campaign in which they are accused of failure to be accountable and transparent with Parliament.

... some of the “legacy” items are largely unused. The University of Waterloo’s environmental research centre, completed 11 months ago, remains deserted and without signage. The echoing hallways of a summit centre are largely bare save for pieces of community art, while a brand-new seniors centre, banquet hall and drop-in daycare were empty on Monday afternoon.