(This column was published in the North Shore News on Feb. 2, 2000)


A billion-dollar botch-up

By Leo Knight

DESPITE the best efforts of the federal government, the gross mismanagement of the Transitional Jobs Fund within the Human Resources Ministry (HDRC) has not quite disappeared.  


Close, but not quite.  


I suggested last week that the proposed subsidy to Canadian NHL teams was nothing more than a smokescreen designed to focus attention away from the scandalous incompetence of the HDRC in the disposition of over three billion taxpayer dollars.  


It appears they almost got away with it, but the story now seems to have got some legs and is beginning to be an issue across this country.  


The minister responsible, Jane Stewart, was forced to issue a statement last Friday trying to undo some of the damage.  


The release begins by saying that "there has been a great deal of misinformation and confusion in the last few days. ..."  


She then said the words which immediately make me suspicious of any politician who deigns to utter them: "I wish to set the record straight ... "  


What she really means is that we've got it right and she now has to muddy the waters as much as possible.  


Unfortunately for her, her defence is weak.  


"Let's be clear on several counts," she begins. "Money is not missing. HDRC has the records of all cheques issued through our accounting mechanisms, and we know to whom we made payments...," she pleads in defence of the department mandarins.  


Isn't that special?  


They know to whom they doled out the governmental largesse.  


She doesn't mention that of the 400-plus files that were examined at random by the auditor general, 87 of the files were completely empty of any documentation. Nothing, not even one of those infuriating yellow sticky things that inhabit our lives.  


She also conveniently didn't mention that her own riding of Brant, a "have" area by any measuring stick, received over $30 million from HDRC in the past three years.  


Included in that figure is the Brant School of Hairdressing which, according to the HDRC, received $11,400 in job creation grants. Not so, according to the owner of the hairstyling school, Lena VanKerrebroeck. According to her she never received a dime and like the rest of us only knows the one-way flow of money to Ottawa.  


Other businesses on the HDRC list from Stewart's riding include Phoenix Rising Yoga Therapy, the Prison Art Foundation and Dunk's Custom Log Sawing. Even the giant sportswear company Adidas got a little of the taxpayer's lolly.  


But it's not just Stewart's riding where there were questionable grants. One needs to look very carefully at the prime minister's riding of Shawinigan to understand the problem. There are a host of dubious grants to a variety of businesses in the PM's backyard, some of which have been reported by the National Post. But one of the most telling is the hotel project called Auberge Gouvernor Shawinigan owned by Belgian businessman Pierre Thibault, who has, shall we say, a checkered past.  


Thibault built his $6.4-million hotel with $2,025,000 of federal grant money, including $600,000 in money from HDRC announced on March 13, 1997, without any departmental paperwork whatsoever.  


Interestingly enough, Chretien further publicized the grant in his constituency bulletin in April of 1997, the month the federal election was called. Funnily enough, HDRC's own guidelines say that grant money will not be given to restaurant and bar facilities.  


It seems that the HDRC administers the Transitional Job Fund as nothing more than a political slush fund for the Liberal party. And we get to pay for the privilege.  


The truly naive among us are wondering why no heads have rolled as a result of this scandal. But let's have a quick look at some of the players.  


The minister responsible is Jane Stewart, the daughter of Bob Nixon, former leader of the Ontario Liberal party and chief bagman for the Libs in Ontario.  


Stewart has been groomed for power most of her life. According to my sources in Ottawa she is the anointed one, the choice of Chretien as his replacement when he retires.  


Stewart is responsible for an annual budget of, are you ready for this, $26 billion. To put this in perspective, the budget administered by Health Minister Allan Rock, once considered a front-runner for the top job, is only $1.8 billion.  


The former deputy minister for HDRC is Mel Cappe. He was promoted to Clerk of the Privy Council. He is the de facto head of the federal civil service and principal secretary to the cabinet.  


In other words, he wields the most power in government.  


He sets the agenda for cabinet. Only he decides what will be discussed. He decides who will see the prime minister.  


He is virtually omnipotent and answerable to no one. His salary went from $165,000 to $250,000 per year with the promotion.  


The bureaucrat who was responsible for the administration of the Transitional Job Fund is Martha Nixon.  


At the time of this mess she was Senior Director General, in charge of Operations of the HRDC Investment Branch. She is now the Assistant Deputy Minister in charge of Operations in Immigration Canada. Any wonder why we have a problem with our refugee system?  


And, as a final insult to us, the forlorn taxpayers, senior managers in HDRC were given performance bonuses in 1996-1997 totalling $980,000. If you're not sick yet, there's something wrong.  


There is a stench to this scandal that will not go away. One wonders if this mess, dubbed "Shovelgate" by Southam columnist Lawrence Martin, will be what finally inspires the battered, but thus far apathetic, Canadian taxpayer to start a tax revolt.  


In some countries it would be enough to overthrow the government.  






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