To End Scandals, Dump Some Crowns

Worth A Look, Role of Government, Frontier Centre

If one consequence of the Gomery inquiry and last week’s allegations of sweetheart contracts and bribes is that nothing will ever change, the wrong lesson will have been learned.

That conclusion would be easy, understandable, and cynical. It would also be a mistaken resignation to what is not inevitable.

That corruption can always occur in fallible human beings who have access to power and who then trade it for cash is a given– that it is guaranteed is not.

If it were a fait accompli, Canada’s level of corruption would be much like Robert Mugabe’s Zimbabwe, though I grant that Liberals from Quebec look little different these days.

Independent courts, a free press, strong opposition parties, independent offices such as the auditor general, a certain division of powers and responsibilities, a professional civil service among other useful items, separate relatively corruption-free jurisdictions from those that are not. So perspective is needed in part to combat cynicism that can be fatal to necessary reforms.

That the Liberal party deserves an electoral thwacking is true. But should the Conservatives replace the Liberals in the next election, to get there and to lessen the chances of their own Gomery inquiry one day, it will help to be clear about a few needed systemic changes.

As it concerns government advertising and “sponsorships,” it’s not difficult to cut out the non-essentials. Just about any sponsorship falls under the category of easily abused pork. Let the private sector pay for events, not bureaucrats playing with tax dollars as if it were monopoly money.

Advertising should be subject to withering skepticism. The federal government bought ads in Ottawa’s Corel Centre for years in order to fatten up the ad revenues of the Ottawa Senators, advertising itself and Crown corporations, as if fans in the capital city didn’t know the government existed. That’s legal, routine and also unnecessary.

Governments have necessary advertising: to warn of us the next Asian flu virus. But that doesn’t include lectures on emissions, commercials to tell us what a great job they’re doing on health care, or the promotion of Canada in Quebec — the favoured $250-million Jean Chretien reason.

But for the willing, take another step. If Martin and Co. or their replacements desire to prevent similar future waste and corruption, there are at least three unnecessary Crown corporations involved in the sponsorship scandal that can be chucked into the private sector.

It’s been lately overlooked, but chunks of the cash “lost” in the sponsorship debacle were funneled through Crowns. They were used as political conduits for illicit taxpayer cash transfers, including the use of fake invoices and fake contracts.

To prevent that from re-occurring, a permanent severing from government is the only measure that will forever remove Crowns from the political-bureaucratic axis that allowed for the sponsorship debacle in the first place. Here are three prime candidates.

In 1998, the Business Development Bank of Canada transferred $250,000 to the Quebec sponsorship firm L’information. There was no written contract. In 2000, BDC again transferred $125,000, this time to Lafleur Communications. There was also no contract with Lafleur.

The BDC has long argued it is not a pork-laden agency, though prior to 1998, BDC used to receive as much as $27 million annually from Parliament. It has since claimed it is self-sustaining. Wonderful. So there is no reason for government ownership any longer of the sort that could be used to rip off taxpayers.

Then there is Via Rail, which has been a substantial drain on government coffers for years, uses its subsidies to compete for passengers with private-sector airline and bus companies, and has taken in almost $1.5 billion in operating subsidies between 1996 and 2003 (the latter being the last year for which it has reported).

The company has been part of the sponsorship scandal and channeled $862,500 to the Quebec ad agency, L’Information via a fictitious contract. It also contravened the Financial Administration Act. Cut the subsidies and sell its assets.

Or Canada Post. The auditor general noted that more than $1.6 million went through Canada Post to L’Information with no signed contract and expressed concern about a lack of proper documentation. And then there was the little matter of Liberal hack Andre Ouellet, once president of Canada Post, and his $2 million in “expenses” over eight years.

As with BDC, Canada Post is now self-sufficient (since 1987). So let’s turn it into the equivalent of an airport authority, out of the reach of the political-bureaucratic axis and subject it to regulatory oversight.

There’s no compelling reason for these particular Crowns to remain government entities. In fact, there is an excellent business and taxpayer case to be made for subjecting them to competition.

And as a bonus, they would no longer be in the service of questionable bureaucrats and politicians.