CBC In Depth
Auditor General's Report 2004
CBC News Online | February 11, 2004

Auditor General Sheila Fraser
Here are some of the major findings reported by Auditor General Sheila Fraser:
  • Senior government officials running the federal government's advertising and sponsorship contracts in Quebec, as well as five Crown corporations – the RCMP, Via Rail, Canada Post, the Business Development Bank of Canada and the Old Port of Montreal – wasted money and showed disregard for rules, mishandling millions of dollars since 1995.

    More than $100 million was paid to various communications agencies in the form of fees and commissions, Fraser found. In most cases the agencies did little more than hand over the cheques.

    The sponsorship program was designed to generate commissions for private companies, while hiding the source of the funding, rather than providing any benefit for Canadians, Fraser said.

    "I think this is such a blatant misuse of public funds that it is shocking. I am actually appalled by what we've found."

    "I am deeply disturbed that such practices were allowed to happen in the first place. I don't think anybody can take this lightly."

    Details of some of the sponsorship programs:

  • The government's $3-million sponsorship of the RCMP's 125th anniversary celebrations was wasteful, because the Mounties were already required to display the "Canada" word mark. Three ad agencies – Lafleur, Media/I.D.A. Vision and Gosselin – deducted $1.3 million of the money before passing the remaining $1.7 million to the Mounties. Some bank records of Quebec Mounties were destroyed.

  • In the $5-million sponsorship of a television series about Maurice Richard, to be produced by the private firm L'information essentielle, communication firms, including Lafleur, Media/I.D.A. Vision, Gosselin and Groupaction, received $440,000 in commissions without signing any contracts or doing any work. The program also used Via Rail as a conduit to transfer nearly $1 million to the television series through a "fictitious contract," reimbursing the Crown corporation for all but $160,000 of the money. Lafleur received $112,500 to handle the transfer. In addition, Canada Post paid $1.6 million to sponsor the series without any deal being signed or any documentation whatsoever, breaking the corporation's own rules.

  • Communications Canada gave $1.5 million to the Old Port of Montreal to buy a new screen for its science centre, but funnelled the money through Lafleur and Media/I.D.A. Vision, which collected $225,000 in commissions. The auditor general's other findings:

  • The Department of Indian Affairs didn't properly track its spending in land claims settlements worth $1.2 billion. The department also failed to follow guidelines in hiring outside budget managers, paying $7 million to managers who didn't go through a public tender process.

  • Contracts worth $101 million to buy two government VIP jets, used to transport the prime minister, cabinet members and other VIPs, were untendered and unnecessary. Fraser said the Department of Defence was satisfied with the performance of the existing planes.

  • While the surplus of the Employment Insurance system reaches a record $43.8 billion, 65 per cent of people calling EI centres for assistance get busy signals.

    "Service in some regions was significantly and chronically below targets, and repeated efforts to improve services have had little impact."

  • The government has been neglecting Canada's parks and its heritage documents. Some historically important documents are rotting because of improper storage, others are being snapped up by private collectors. The 170-year-old Fort Henry in Kingston, Ont., could crumble in two years, she said.

    "Once a piece of history is lost, it's lost forever, and the situation is not improving."

Report of the Auditor General to the House of Commons
(The following is in pdf format)



CBC News Sunday: Interview with Sheila Fraser

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