Contents
Government Mismanagement: Minister Besieged
An audit of the federal job-creation grant program reveals what
has been described at best as sloppy bookkeeping. As the
current Minister for the Department of Human Resources, Jane
Stewart must defend not only her own political reputation but that
of the entire Liberal government. This story reveals how
ministers of the Crown become especially accountable to the
general public, the media, and opposition forces whether or not
they personally are responsible for perceived errors or
mismanagement. This aspect of political noblesse oblige and the
parliamentary tradition of not holding a minister responsible for
policy and practices once he or she has left a particular portfolio
highlight the degree of responsibility that elected government
officials must assume in order that the integrity of the democratic
process be protected.
Introduction
Allegations and Accountability
Her Majestys Loyal Opposition
Whos Responsible?
The Patronage Issue
Ghosts and Skeletons
Creating Employment
Discussion, Research, and Essay Questions
Comprehensive News in Review Study Modules
Using both the print and non-print material from various issues of News in Review, teachers and
students can create comprehensive, thematic modules that are excellent for research purposes,
independent assignments, and small group study. We recommend the stories indicated below for the
universal issues they represent and for the archival and historic material they contain.
Cigarette Smuggling: Beating the Tax, November 1993
Medicare: The Cost of Caring, November 1993
Overdrawn: Understanding the Deficit, December 1994
Other Related Videos Available from CBC Learning
Does Your Resource Collection Include These CBC Videos?
Spin Cycle
Introduction
Government Mismanagement: Minister Besieged
In his first public comment on the way the current federal
government has managed its money, Auditor General Denis
Desautels delivered this message to the House of Commons
Committee on Human Resources on March 23, 2000: This is an
unacceptable way, in my opinion, to spend public funds. Large
amounts of public funds were spent without the appropriate
controls, making it difficult to know whether the funds were used
as intended, spent wisely, and produced desired results.
Desautels was referring to the scandal that erupted four days
earlier following the release of an internal audit detailing largescale mismanagement of money in the Ministry of Human
Resources, specifically from a fund called the Transitional Jobs
Fund. In the ensuing outcry, Jane Stewart, the minister in charge
of this portfolio, was, on behalf of herself, her department, and
the government, the target of relentless questioning from media
and accusations of incompetence and misconduct by the
opposition parties. At the time of this writing, she has thus far
withstood the intense public scrutiny and relentless demands for
her resignation. The scandal, however, is not going away; an
investigation by the Auditor General is expected to be completed
by October 2000.
The allegations are very embarrassing for the Chrétien
government. During their two terms in power, the Liberals have
carefully cultivated an image as sound financial managers who
eliminated the deficit and returned Canada to fiscal health. The
original mandate of the program in question, the Transitional
Jobs Fund, was clear and understandable: to assist communities
in dealing with the tighter restrictions imposed on Employment
Insurance by the Liberals. The $300-million of funding was to be
given for worthy projects in ridings with unemployment rates
above 10 percent. Made permanent under the name The
Canada Jobs Fund in 1999; the funds annual budget has been
set at $110-million.
The principal criticism of the funds management is what critics
have called sloppy accounting; the majority of the applicants for
the jobs grants were private companies, but few checks were
made to determine the viability of their business plans. As well,
according to critics, the follow-up assessment of the grants was
either poorly done or non-existent. The projects ranged from
educational programs and the establishment of textile factories
to cultural events such as the Groundhog Day festival. Many of
the programs, however, are generally considered to be excellent
ones that do indeed create jobs. But as the Auditor General
noted, Jane Stewart and the Ministry of Human Resources
cannot always demonstrate that the programs accomplish what
they were intended to.
An auditor examines financial records to see if an organization
can accurately account for its financial transactions. A minister of
the Crown must be accountable to the general public for the
operations of his or her department. In light of such serious
criticisms, Jane Stewart must, on behalf of her department and
the government, speak to the issues of public accountability and
political credibility.
Contents
Introduction
Allegations and Accountability
Her Majestys Loyal Opposition
Whos Responsible?
The Patronage Issue
Ghosts and Skeletons
Creating Employment
Discussion, Research, and Essay Questions
Comprehensive News in Review Study Modules
Using both the print and non-print material from various issues of News in Review, teachers and
students can create comprehensive, thematic modules that are excellent for research purposes,
independent assignments, and small group study. We recommend the stories indicated below for the
universal issues they represent and for the archival and historic material they contain.
Cigarette Smuggling: Beating the Tax, November 1993
Medicare: The Cost of Caring, November 1993
Overdrawn: Understanding the Deficit, December 1994
Other Related Videos Available from CBC Learning
Does Your Resource Collection Include These CBC Videos?
Spin Cycle
Allegations and Accountability
Government Mismanagement: Minister Besieged
For the Record
1. What is an allegation? What connotation does this word often
have? Research the word carefully.
2. What does it mean when we hold someone accountable? Why
is accountability so important in a democratic society?
The Allegations
In this situation, critics allege that government mismanagement
occurred. They have pointed to examples of projects partially or
fully funded by federal grants that struggle financially and are, in
the opinion of the critics, poor financial risks; 51 companies
funded have declared bankruptcy. There are suggestions as well
that some projects applied for the easily obtained grants when
they could have used federal loans or even paid their own way.
This is not the image that the deficit-cutting Liberals wish to
portray.
Allegations of reckless spending aside, the greater focus has
been upon the alleged use of the grants program as a slush fund
to channel money to projects in Liberal ridings. Many costly
projects have apparently been created with grant money in
primarily Liberal regions. Stewart contends that programs have
been funded in all ridings right across Canada. The Auditor
General himself noted, however, that federal MPs have been
involved too much in the decision-making process, blurring the
lines of accountability. The police as well are currently
investigating 10 of the job grant projects, three of them in Prime
Minister Jean Chrétiens riding.
The Burden of Accountability
The question of accountability is at the centre of this scandal.
Will Jane Stewart become the scapegoat for this situation or will
other ministers, party members, or civil servants be forced to
share the responsibility?
There is nothing like the hint of a scandal to start the slang words
flowing. The parties sitting in opposition to the Liberals used
terms like billion-dollar boondoggle (a wasteful or impractical
project or activity involving graft; the dishonest acquisition of
gain) and Liberal slush fund. Slush fund refers to government
projects or appropriations yielding rich patronage benefits. In
response, the government accused its critics of implementing a
witch-hunt. The Liberals, specifically the Ministry of Human
Resources, stands accused of mismanaging hundreds of millions
of dollars. The Liberals, for their part, maintain that their critics
have falsely accused them, much as innocent people were
accused of witchcraft hundreds of years ago.
Jane Stewart is the cabinet minister responsible for Human
Resources Development Canada, a portfolio created in 1993. It
is responsible for administering more money than any other
ministry, approximately $60-billion. Human Resources has the
enormous mandate of administering programs such as welfare,
employment insurance, the Canada Pension Plan payments and
the Millennium student scholarships. It is also accountable for
the broadly termed Human Resources Investment, the focus of
the current scandal. Jane Stewarts vast ministry allocates money
to create jobs and spur investment across Canada. While
reducing unemployment is a laudable goal, critics have charged
that the Human Resources bureaucracy was slipshod, allowing
millions of dollars to be paid out with little idea of where it went or
whether the project was valid in the first place. They also
maintain that much of the money from Human Resources has
been funnelled toward Liberal ridings, including Prime Minister
Chrétiens.
Seeing For Yourself
The people involved in this issue all have specific political roles
to fulfill. As you watch this New In Review, note what each of the
following individuals has to say about the mismanagement crisis,
be prepared to suggest why and how each is involved, and
formulate your overall assessment of this news event.
Jane Stewart, Minister of Human Resources
Diane Ablonczy, Alberta Reform MP
Maria Barrados, Assistant Auditor General
Jean Chrétien, Prime Minister
Pierre Pettigrew, International Trade Minister
Preston Manning, Leader of the Opposition (at the time)
Follow-up Discussion
The furor surrounding the mismanagement scandal was intense
for weeks, longer than the Liberal government expected or
wanted. Calls for the resignations of Jane Stewart, Pierre
Pettigrew, and Human Resources managers were repeatedly
made. However, following intense media coverage, the issue
slowly began to diminish in priority in the coverage. What does
this suggest to you? Was this scandal a tempest in a teapot?
Was it an administrative error blown out of proportion or
exploited by the Opposition? Did the government weather the
storm and manage to hide the worst details behind bureaucratic
barriers? Does the general public have a limited attention span
for this kind of political crisis?
Contents
Introduction
Allegations and Accountability
Her Majestys Loyal Opposition
Whos Responsible?
The Patronage Issue
Ghosts and Skeletons
Creating Employment
Discussion, Research, and Essay Questions
Comprehensive News in Review Study Modules
Using both the print and non-print material from various issues of News in Review, teachers and
students can create comprehensive, thematic modules that are excellent for research purposes,
independent assignments, and small group study. We recommend the stories indicated below for the
universal issues they represent and for the archival and historic material they contain.
Cigarette Smuggling: Beating the Tax, November 1993
Medicare: The Cost of Caring, November 1993
Overdrawn: Understanding the Deficit, December 1994
Other Related Videos Available from CBC Learning
Does Your Resource Collection Include These CBC Videos?
Spin Cycle
Her Majestys Loyal Opposition
Government Mismanagement: Minister Besieged
For the Record
1. What is an allegation? What connotation does this word often
have? Research the word carefully.
2. What does it mean when we hold someone accountable? Why
is accountability so important in a democratic society?
The Allegations
In this situation, critics allege that government mismanagement
occurred. They have pointed to examples of projects partially or
fully funded by federal grants that struggle financially and are, in
the opinion of the critics, poor financial risks; 51 companies
funded have declared bankruptcy. There are suggestions as well
that some projects applied for the easily obtained grants when
they could have used federal loans or even paid their own way.
This is not the image that the deficit-cutting Liberals wish to
portray.
Allegations of reckless spending aside, the greater focus has
been upon the alleged use of the grants program as a slush fund
to channel money to projects in Liberal ridings. Many costly
projects have apparently been created with grant money in
primarily Liberal regions. Stewart contends that programs have
been funded in all ridings right across Canada. The Auditor
General himself noted, however, that federal MPs have been
involved too much in the decision-making process, blurring the
lines of accountability. The police as well are currently
investigating 10 of the job grant projects, three of them in Prime
Minister Jean Chrétiens riding.
The Burden of Accountability
The question of accountability is at the centre of this scandal.
Will Jane Stewart become the scapegoat for this situation or will
other ministers, party members, or civil servants be forced to
share the responsibility?
There is nothing like the hint of a scandal to start the slang words
flowing. The parties sitting in opposition to the Liberals used
terms like billion-dollar boondoggle (a wasteful or impractical
project or activity involving graft; the dishonest acquisition of
gain) and Liberal slush fund. Slush fund refers to government
projects or appropriations yielding rich patronage benefits. In
response, the government accused its critics of implementing a
witch-hunt. The Liberals, specifically the Ministry of Human
Resources, stands accused of mismanaging hundreds of millions
of dollars. The Liberals, for their part, maintain that their critics
have falsely accused them, much as innocent people were
accused of witchcraft hundreds of years ago.
Jane Stewart is the cabinet minister responsible for Human
Resources Development Canada, a portfolio created in 1993. It
is responsible for administering more money than any other
ministry, approximately $60-billion. Human Resources has the
enormous mandate of administering programs such as welfare,
employment insurance, the Canada Pension Plan payments and
the Millennium student scholarships. It is also accountable for
the broadly termed Human Resources Investment, the focus of
the current scandal. Jane Stewarts vast ministry allocates money
to create jobs and spur investment across Canada. While
reducing unemployment is a laudable goal, critics have charged
that the Human Resources bureaucracy was slipshod, allowing
millions of dollars to be paid out with little idea of where it went or
whether the project was valid in the first place. They also
maintain that much of the money from Human Resources has
been funnelled toward Liberal ridings, including Prime Minister
Chrétiens.
Seeing For Yourself
The people involved in this issue all have specific political roles
to fulfill. As you watch this New In Review, note what each of the
following individuals has to say about the mismanagement crisis,
be prepared to suggest why and how each is involved, and
formulate your overall assessment of this news event.
Jane Stewart, Minister of Human Resources
Diane Ablonczy, Alberta Reform MP
Maria Barrados, Assistant Auditor General
Jean Chrétien, Prime Minister
Pierre Pettigrew, International Trade Minister
Preston Manning, Leader of the Opposition (at the time)
Follow-up Discussion
The furor surrounding the mismanagement scandal was intense
for weeks, longer than the Liberal government expected or
wanted. Calls for the resignations of Jane Stewart, Pierre
Pettigrew, and Human Resources managers were repeatedly
made. However, following intense media coverage, the issue
slowly began to diminish in priority in the coverage. What does
this suggest to you? Was this scandal a tempest in a teapot?
Was it an administrative error blown out of proportion or
exploited by the Opposition? Did the government weather the
storm and manage to hide the worst details behind bureaucratic
barriers? Does the general public have a limited attention span
for this kind of political crisis?
Contents
Introduction
Allegations and Accountability
Her Majestys Loyal Opposition
Whos Responsible?
The Patronage Issue
Ghosts and Skeletons
Creating Employment
Discussion, Research, and Essay Questions
Comprehensive News in Review Study Modules
Using both the print and non-print material from various issues of News in Review, teachers and
students can create comprehensive, thematic modules that are excellent for research purposes,
independent assignments, and small group study. We recommend the stories indicated below for the
universal issues they represent and for the archival and historic material they contain.
Cigarette Smuggling: Beating the Tax, November 1993
Medicare: The Cost of Caring, November 1993
Overdrawn: Understanding the Deficit, December 1994
Other Related Videos Available from CBC Learning
Does Your Resource Collection Include These CBC Videos?
Spin Cycle
Whos Responsible?
Government Mismanagement: Minister Besieged
While there is an immediate circle of high-profile individuals
implicated in this political scandal, the web of responsibility goes
beyond the members of the Human Resources ministry. Jane
Stewart, the Minister for Human Resources, has borne the brunt
of the pressure thus far. According to former Speaker of the
House, John Fraser, this is as it should be. In his book, The
House of Commons At Work, he writes:
Each Minister with a portfolio is the political head of a
department and is responsible for its activities. (S)he must be
willing to answer for any shortcomings of subordinates, and to
have the final word in all important decisions. If necessary, the
Minister must resign in the event of a serious failing: this what we
call ministerial responsibility.
Preliminary Discussion
1. Jane Stewart did not become Minister of Human Resources
until August 3, 1999, two years after the first allegations of
mismanagement of grants first emerged. Is it fair to have the
mantle of responsibility as outlined by John Fraser placed on her
shoulders? Why or why not?
2. List other jobs or roles in our society where individuals must
assume responsibility for the actions of others even if they
personally have not done anything wrong. Discuss your
examples and suggest why the concept of the buck stops here is
essential in political circles as well as others such as the
corporate sector. Who, likewise, must ultimately accept
responsibility for everything that happens in your school?
Pointing Fingers Or Demanding Answers?
Any time there is a scandal in government, the biggest challenge
for ordinary citizens is determining who did what and who is
responsible for what. Below is a list of some incidents that
occurred or allegedly occurred with regard to this scandal. How
might each be linked to the scandal? What key individuals are
implicated, and what is the nature or extent of that persons
involvement? What questions could you ask of each to clarify or
explain the incident or the individuals role in it?
Prime Minister Jean Chrétien created the Transitional Jobs
Fund in 1996 with a $300-million cache of funds to give to ridings
with high unemployment. The result was that civil servants had
to administer funds that at the very least were highly politicized.
At worst, as critics assert, it represents a slush fund.
In October 1997, the RCMP charged former Liberal fundraiser
Pierre Corbeil with seeking party contributions in exchange for
grants from the Jobs Fund.
From February to March 1999, allegations of inappropriate use
of the grants were levelled against Jean Chrétien for projects
created in his Saint-Maurice constituency.
An interim report from auditors outlining mismanagement went
to the Human Resources audit committee. Top officials were
made aware of its findings in July 1999.
The internal audit of a small fraction of the grants programs
revealed that in the 459 projects reviewed, 80 per cent of the
time there was insufficient monitoring to know if the programs
goals were achieved or not. This represents about $200-million
in spending.
According to the report, in 37 of these projects, there were
serious enough concerns about their eligibility that Ottawa might
request a return of the grant.
Eighty per cent of the grants had not been financially monitored
in any way.
According to the audit, 15 per cent of the projects reviewed
received approval even though the recipient of the Liberal
largesse did not submit an application. Other organizations had
grants approved despite failing to hand in budget proposals or
even a description of exactly what it was they planned to do with
the money. Some grant requests were topped up without the
applicant even asking for it. It is estimated that in 80 per cent of
the cases, government officials didnt bother to check to see if the
money was being properly spent.
Jane Stewart admitted she was briefed in general about the
audit when she took office in August 1999. She maintains that
she was not aware of the full implications until she received the
full audit on November 17, 1999. However, she continued to tell
Parliament as late as December 1 that the programs were being
managed appropriately.
Prime Minister Chrétien was told of the audit report on January
11, 2000. The audit report was released on January 19 (the
same day as the controversial NHL subsidy proposal).
Coincidentally, this was the same day the Reform Party filed
access to information requests for files from the audit.
The current Minister for International Affairs, Pierre Pettigrew,
was responsible for Human Resources for the period when the
money was handed out. According to parliamentary procedure,
he is not required to answer questions in the House about his
former portfolio.
Fingers have also been pointed at former deputy minister of
Human Resources, Jean-Jacques Noreau, who held the position
from 1993 to 1996. Under his management, it has been alleged
that he encouraged a fast-track approach to grants, even if that
meant sometimes breaking bureaucratic rules. Noreau himself
concedes that regional managers were given wider discretion to
decide on local program spending with less red tape from
Ottawa. This occurred with the blessings of many Liberal MPs.
Noreau now works with the Organization for Economic Cooperation and Development in Paris.
The present deputy minister of Human Resources is Mel Cappe,
who led the department during the alleged mismanagement
period. Deputy ministers are career civil servants who are
responsible for administering the bureaucracy and answering to
the minister. They do not leave if the minister or the government
changes. While he ordered the audit that uncovered the
problems, the poor accounting also occurred during his mandate.
Pointed Questions and Activities
1. The Financial Administration Act outlaws reckless spending of
federal funds. Why would this be stipulated in legal terms?
2. Some observers say that the extent of the problem has still not
emerged. If you were the Prime Minister or Jane Stewart what
would you be doing in the meantime to manage this crisis?
3. In your opinion, what degree of responsibility must each of the
individuals mentioned above assume? Suggest the nature of that
responsibility.
4. Based on the above information, what evidence is there that
inappropriate actions occurred? What evidence is there that the
democratic process worked?
5. Working in small groups devise a list of safeguards or
guidelines for a department like Human Resources that would
assure that mismanagement such as that which was alleged to
have occurred does not happen.
6. Working with a partner, write a memo (in the role of a key
advisor) to the Minister of Human Resources in which you outline
some basic strategies for dealing publicly with the scandal.
7. Assume the role of the president of a local riding association
for the Liberal Party. Write a letter to Jane Stewart, with a copy
to the Prime Minister, in which you express your views on this
situation.
Contents
Introduction
Allegations and Accountability
Her Majestys Loyal Opposition
Whos Responsible?
The Patronage Issue
Ghosts and Skeletons
Creating Employment
Discussion, Research, and Essay Questions
Comprehensive News in Review Study Modules
Using both the print and non-print material from various issues of News in Review, teachers and
students can create comprehensive, thematic modules that are excellent for research purposes,
independent assignments, and small group study. We recommend the stories indicated below for the
universal issues they represent and for the archival and historic material they contain.
Cigarette Smuggling: Beating the Tax, November 1993
Medicare: The Cost of Caring, November 1993
Overdrawn: Understanding the Deficit, December 1994
Other Related Videos Available from CBC Learning
Does Your Resource Collection Include These CBC Videos?
Spin Cycle
The Patronage Issue
Government Mismanagement: Minister Besieged
When former U.S. president Andrew Jackson declared in 1828,
To the victor go the spoils, he was referring to the practice of
rewarding politicians and their respective districts for supporting
him during the election that put his party in office. Some might
view this as a medieval system in which a monarch at war would
reward the nobles that fought on his or her side with land or
money and imprison or evict those who did not. Today such a
practice is often referred to as pork-barrel politics. Pork-barrelling
is a form of political patronage in which jobs, contracts, or other
financial benefits are granted to entire communities or particular
regions as a reward for supporting a particular candidate or the
candidates party. The term originates from the American Civil
War. It was the practice on plantations to distribute rations of salt
pork from wooden barrels to slaves. Pork barrelling is usually not
a criminal activity and is usually not done for personal gain at the
expense of the public purse. It is, however, a pejorative term
when applied to a politician or a political party. It is also difficult
to prove.
Every political party in power has been accused by its opponents
of patronage. As a November 16, 1999, editorial in the Halifax
Daily News noted, Andrew Jacksons pork-barreling was unique
only because he was so open about doing it. Prime Minister
Chrétien, while not as frank as President Jackson, has
adamantly defended the grants that his government has
allocated and denied that they represent this form of patronage.
He has maintained that they are not partisan handouts and that
everything has been done properly. From his perspective,
succeeding in having money and projects distributed within his
riding is simply fulfilling his job as a member of Parliament,
serving his constituents well. Members of Parliament are
expected to represent their constituents interests. If, for example,
candidates in an election promise to reduce unemployment, then
how can they be faulted for steering building projects or federal
money into their ridings once in office? The difference between
pork-barreling and providing legitimate and effective valid
economic programs can be a fine line, can become blurred, or
can involve an inaccurate judgment on the part of the accuser.
When the prime minister of Canada appoints new senators or
heads of Crown corporations or project leaders, critics often
make accusations of patronage. The implication, as with porkbarrel spending, is that party loyalists or major contributors of
campaign funds are being rewarded with choice government
positions. Whether this is true or not is also difficult to determine
since it makes sense to appoint people who have demonstrated
their abilities. One could argue that the prime minister is likely to
select more people affiliated with his or her party because it is in
that context that the individuals have become known to the prime
minister and have demonstrated their abilities.
The issue with both pork-barrel spending and patronage
appointments is not whether they can be justified, but whether,
because of their connections to the party in power, the region or
individual has an unfair advantage over others. And because
government positions or projects are financed by revenue
generated from all taxpayers, including those who did not elect
members to the government side of the House of Commons, it is
assumed that such appointments or grants should be distributed
in an equitable fashion, which of course is much easier said than
done. It is easy to understand why some would see inequity at
work if ridings that voted for the government obtain infrastructure
projects, more grants, or receive their money first. For example,
a July 6, 1999, article in the Vancouver Province, observed that
federal highway money seems to dry up west of Winnipeg. In
1998-99, where Ontario received $170.4-million in federal
highway grants, British Columbia, with 22 per cent of the nations
highways (and very few Liberal MPs) received only $190 000.
Since 1988, B.C. has obtained $30-million for roads in grants. By
contrast, Quebec and Newfoundland will have received over
$400-million by the year 2003. Such relationships between fund
allocations and Liberal election results have created skepticism
and cynicism about politicians in the minds of many Canadians.
As with all issues of fairness, this can be often a question of
perception. Proving patronage and pork-barrelling, as opposed
to making the allegation, requires clear evidence. As is the case
in a court of law, a government so accused is innocent until
proven guilty. The burden of proof is on the accuser.
Discussion
1. Should members of Parliament or cabinet members have the
power to direct money to geographical areas of their choice? If
so, should there be limits? Would Canadians be better served by
a neutral group that would allocate projects and resources
independent of political influence?
2. An editorial in the Halifax Daily News, suggested that the only
way to control pork-barrel spending in the Canadian system of
government was to utilize the Dracula effect. According to
legend, vampires, who are creatures of the night, are destroyed
by the exposure to sunlight. This analogy suggests that only
public scrutiny of government spending habits can determine
whether government projects and appointments are valid or not.
The improper allocations and their perpetrators would then be
removed. Is the Dracula effect an accurate analogy for how our
system works? If so, who would the vampire slayers be in our
system? What groups or institutions might serve as watchdogs to
ensure that the government behaves properly?
Contents
Introduction
Allegations and Accountability
Her Majestys Loyal Opposition
Whos Responsible?
The Patronage Issue
Ghosts and Skeletons
Creating Employment
Discussion, Research, and Essay Questions
Comprehensive News in Review Study Modules
Using both the print and non-print material from various issues of News in Review, teachers and
students can create comprehensive, thematic modules that are excellent for research purposes,
independent assignments, and small group study. We recommend the stories indicated below for the
universal issues they represent and for the archival and historic material they contain.
Cigarette Smuggling: Beating the Tax, November 1993
Medicare: The Cost of Caring, November 1993
Overdrawn: Understanding the Deficit, December 1994
Other Related Videos Available from CBC Learning
Does Your Resource Collection Include These CBC Videos?
Spin Cycle
Ghosts and Skeletons
Government Mismanagement: Minister Besieged
Some critics of Jean Chrétien, and other political observers,
have referred to him as the teflon man because in the past
allegations of questionable activities directed toward him have
not stuck. The allegations and the issues were just not
provocative enough to captivate Canadians to the point where a
public reaction or outcry led to a full-blown scandal. Because of
their public mandate and the public trust that they represent,
elected officials may be held up to a higher standard than might
an ordinary citizen. Examine each of the situations below and
consider why each provoked criticism of the Chrétien
government. Suggest also why each did not stick.
The worst problems in terms of allegations experienced by the
Liberals seemed to have fallen on the Prime Ministers cabinet
ministers instead of on Chrétien himself. Minister of Canadian
Heritage Sheila Copps was forced to resign over her broken preelection promise to scrap the GST. Solicitor General Andy Scott
resigned for talking too freely in public over confidential matters.
The resignation of these hand-picked, top officials who were
close to Chrétien did not detract from his popularity and
credibility. All in all, his terms as prime minister have been
relatively smooth sailing, compared with those of other prime
ministers such as Brian Mulroney.
The current crisis over alleged mismanagement in the Human
Resources ministry has ties to controversial grants made in
Chrétiens riding of Saint-Maurice. As far back as 1997,
allegations were raised that the Transitional Jobs Fund of the
Human Resources ministry was being used to solicit favour from
voters, reward Liberal constituencies, and encourage campaign
donations from grateful companies. For example, in October
1997, Aerospatial Globax of Shawinigan (in Chrétiens own
riding) received $2.04-million, and Megatech Electro of GrandMère received $1.3-million. Both made small contributions to the
Liberal Party.
In February 1999, conflict-of-interest allegations were raised by
the Opposition over grants and loans made to a Shawinigan
businessman. Yvon Duhaime purchased a hotel in 1993 from a
company of which 25 per cent was owned by the Chrétien family.
The man has subsequently received $188 799 worth of federal
job-creation grants from the Human Resources ministry, and a
further $665 000 in federal loans. Prime Minister Chrétien
defended his actions in Parliament, and in a letter to The
National Post he noted that he had sold his interests in the
company in question before taking office. He also noted that the
grants were made as part of a legitimate program and his
contact with parties involved was as an MP representing his
constituents. In his letter, Chrétien wrote:
One of the strengths of the program [the Transitional Jobs Fund]
is that before any project is approved, consultation must be held
with a wide range of individuals, including the local member of
Parliament, regardless of his or her political stripe. The fact that
a member of my constituency office attended a meeting to
discuss a project is, therefore, entirely appropriate. In fact, over
1000 projects helping to create over 35 000 jobs have been
approved in Liberal, Reform, Bloc, NDP, and PC ridings. In terms
of the court of public opinion, the Prime Ministers rationale held
up, and the storm blew over once again. However, with the
emergence of the current scandal, the grant allocations to
Chrétiens riding and to all Liberal ridings have undergone
increased scrutiny. Using Access to Information legislation, the
Reform Party uncovered documents indicating that the Prime
Ministers office co-ordinated public relations efforts to take credit
for grants handed out in their ridings. While the official position is
that all monies were used for job creation, the suggestions that
the Prime Minister and the Liberal MPs controlled the movement
of grant funds has been a criticism that has been harder to shake.
Activities
1. Working in groups, devise an anti-patronage policy for any
political party that might be elected. Your policy should give
specific directions and instructions as to what an elected party
should or should not do. Your job is to create clear, workable
guidelines that can be referred to by a government when
awarding grants, job programs, or other appointments that might
be construed as patronage.
2. As a class discuss why patronage is such an important but
tricky issue in politics. How does it relate to ethics, power,
responsibility to the electorate, perception, appearance, and the
ability to deflect, refute, or disprove such allegations?
3. Suggest why Jane Stewart is described as being besieged. In
your opinion, has she been treated fairly? Has she responded
appropriately or effectively to the siege?
4. The expression noblesse oblige refers to the moral obligation
of rich or noble people to behave in a generous and honourable
fashion. How might this term apply to this news story?
Contents
Introduction
Allegations and Accountability
Her Majestys Loyal Opposition
Whos Responsible?
The Patronage Issue
Ghosts and Skeletons
Creating Employment
Discussion, Research, and Essay Questions
Comprehensive News in Review Study Modules
Using both the print and non-print material from various issues of News in Review, teachers and
students can create comprehensive, thematic modules that are excellent for research purposes,
independent assignments, and small group study. We recommend the stories indicated below for the
universal issues they represent and for the archival and historic material they contain.
Cigarette Smuggling: Beating the Tax, November 1993
Medicare: The Cost of Caring, November 1993
Overdrawn: Understanding the Deficit, December 1994
Other Related Videos Available from CBC Learning
Does Your Resource Collection Include These CBC Videos?
Spin Cycle
Creating Employment
Government Mismanagement: Minister Besieged
When defending the largesse of the grants his government
bestowed on projects and companies across Canada, Prime
Minister Chrétien maintained that job creation was paramount. In
April 1999 he wrote, For my region, as for so many others in
Canada, alleviating high unemployment remains the primary
challenge. At the fundamental level of economic theory, funding
a project or company in an area of high unemployment
represents an injection of cash. The people employed by the
project will purchase materials and services for their jobs and
spend their wages in the community. The injection not only
creates jobs directly, but creates spin-off jobs as well. The net
result is lower unemployment and an improved economy.
Examine the information below and then respond to the
criticisms that are implied or overt. Respond in the role of a
member of the Liberal cabinet or as a member of the Opposition.
(Students may choose their role or have it assigned by drawing
lots.)
Critics of the Transitional Jobs Fund approach argue that, politics
aside, the process is inefficient and wasteful. The jobs are
temporary and/or artificial. When the grants end, typically the
jobs do as well. Several of the companies identified in the
mismanagement scandal either did not really need the money or
were poorly run. Although it is hard to imagine, the American
retailing giant, Wal-Mart, was a recipient of a grant. So too, was
a textile company that moved from Montreal to Chrétiens riding
of St. Maurice with a $166 000 grant. As reported in The London
Free Press on February 25, 2000, the money has disappeared,
and no jobs were created. More troubling, $9.17-million was paid
out last year to 51 companies that went bankrupt. It had been
hoped by the government that 2840 long-term sustainable jobs
would have been created. According to The Toronto Star
(February 22, 2000) only about half that number were realized.
The February 14, 2000, issue of Macleans magazine reported
that the audits revealed that many of the grants were a
misapplication of taxpayer dollars. The company that analyzed
the Transitional Jobs Fund, Ekos Research Associates, found
that 42 per cent of the projects they contacted said they would
have gone ahead with their proposal if they were denied a
federal grant. An overlap between federal programs was also
pointed out, and it was reported that companies learned to shop
around for grants that do not need to be repaid, as opposed to
loans from other federal agencies. Critics note that it is ironic that
federal money was given away so easily during the years when
spending was cut in other areas to fight the deficit.
Contents
Introduction
Allegations and Accountability
Her Majestys Loyal Opposition
Whos Responsible?
The Patronage Issue
Ghosts and Skeletons
Creating Employment
Discussion, Research, and Essay Questions
Comprehensive News in Review Study Modules
Using both the print and non-print material from various issues of News in Review, teachers and
students can create comprehensive, thematic modules that are excellent for research purposes,
independent assignments, and small group study. We recommend the stories indicated below for the
universal issues they represent and for the archival and historic material they contain.
Cigarette Smuggling: Beating the Tax, November 1993
Medicare: The Cost of Caring, November 1993
Overdrawn: Understanding the Deficit, December 1994
Other Related Videos Available from CBC Learning
Does Your Resource Collection Include These CBC Videos?
Spin Cycle
Discussion, Research, and Essay Questions
Government Mismanagement: Minister Besieged
1. While the alleged mismanagement of the Transitional Jobs
Fund likely began as early as 1996, opposition members of
Parliament only began to suspect in 1999 that a problem of
significant proportions existed. The internal audit had been
conducted, but its results had not been released. When Reform
Party members sitting on the Human Resources Committee
became frustrated with the lack of information forthcoming, they
applied for the release of ministry documents through the Access
to Information Act. Realizing that she could no longer conceal
the audits findings, Jane Stewart released it in January 2000.
Research the history of the Access to Information legislation and
how the process works. Identify how Canadians can utilize this
resource. List other examples where this act has been utilized. A
good place to begin is the Web site http://canada2.justice.gc.ca/
en/ps/atip/index.html.
2. The Prime Ministers cabinet reflects the nature of the
government in charge and the personality of the Prime Minister.
Its size and composition can vary from one administration to
another. Research the role of the cabinet within the
parliamentary process. What responsibilities does it have? What
rationale is there for the creation of new ministries, the
maintenance of some, and the amalgamation of others?
3. There are currently 22 cabinet portfolios in the Chrétien
government. Choose several of the current cabinet ministers and
create a profile of their portfolios and their personalities. Which
ministers appear to have the stellar or choice ministries? Why do
you believe this? Which appear to be the rising stars? If
someone hoped to become prime minister in the future, which
cabinet posts would give him or her the best experience and the
best public exposure?
4. There have been several references in this News in Review
report to pork-barrel politics. While this current scandal suggests
that it exists in Canada, the term enjoys much wider usage in
American politics. Using a search engine, research the term pork
barrel. Identify the scope and nature of this issue in the United
States. Compare U.S. perspectives on pork barrelling to
Canadian views.
5. With an annual budget of $110-million, the Canada Jobs Fund
has a lot of money available for worthy projects. What, however,
are the criteria for these grants and how do you apply? Research
the activities of the Ministry of Human Resources and in
particular the Jobs Fund. Consult the Web site http://hrdc-drhc.
gc.ca. Find examples of projects that already exist. What made
them successful? Devise your own business project as a jobcreating initiative in your community that you think would merit
such a grant.
Contents
Introduction
Allegations and Accountability
Her Majestys Loyal Opposition
Whos Responsible?
The Patronage Issue
Ghosts and Skeletons
Creating Employment
Discussion, Research, and Essay Questions
Comprehensive News in Review Study Modules
Using both the print and non-print material from various issues of News in Review, teachers and
students can create comprehensive, thematic modules that are excellent for research purposes,
independent assignments, and small group study. We recommend the stories indicated below for the
universal issues they represent and for the archival and historic material they contain.
Cigarette Smuggling: Beating the Tax, November 1993
Medicare: The Cost of Caring, November 1993
Overdrawn: Understanding the Deficit, December 1994
Other Related Videos Available from CBC Learning
Does Your Resource Collection Include These CBC Videos?
Spin Cycle