Being an accountant who had spent his career stifling his poetic impulses, Auditor General Kenneth Dye wondered if he dared test his creative writing skills in his annual report. He knew he had to do something to liven up the 620-page investigation into government spending. So he called in one of his deputies, Ed Rowe, to listen to the key paragraph. It was one of the most unusual descriptions ever written of what happens when government-owned companies spread out of control. “It may be helpful in visualizing the scale of the problem to think of the whole group [the more than 300 companies Ottawa owns or controls] as an enormous iceberg floating lazily in the sunny Atlantic; silent, majestic, awesome,” Dye read. “The public tends to see only the upper portions, consisting of the giants like CNR, Petrocan, CBC, Air Canada and Canada Mortgage and Housing Corporation. The great bulk of the iceberg below the surface is less spectacular, less likely to attract public interest, less likely to receive the attention of Parliament, yet costly to the taxpayers.”
Dye waited expectantly. “What do you think?” he asked. Rowe thought it was brilliant but he had one misgiving. He was not sure that the North Atlantic was sunny. So the two accountants changed it to “foggy Atlantic” and congratulated themselves on their literary handiwork.
When Dye’s report was released last week, the government rapidly discovered that it had more than a budding writer on its hands. The 46-year-old Vancouver accountant is also turning into an extraordinarily effective and outspoken snoop. He believes that if taxpayers are going to pay him $92,600 a year to sniff out waste, sloppiness and scandal in Ottawa, he owes them a penetrating look at the way the capital works. So far, that has led him into a year-long contest of wills with powerful prime ministerial aide Michael Pitfield over access to cabinet documents, several head-on collisions with tight-lipped Crown corporation managers and tireless battles with secretive bureaucrats. He accuses the government of running offices in which three out of every 10 employees show up for work in the morning without any clear idea of what they are supposed to do. He says Otta-
wa’s growing tendency to bail out faltering companies is dangerous, and its habit of channelling millions of taxpayers’ dollars into Crown corporations is wrong and menacing. Every time a passenger boards a train, he points out, taxpayers have to pay $50 into the coffers of Via Rail Canada, a company that shows little evidence of ever becoming Viable. In March the government authorized Petro-Canada to spend $1.7 billion to purchase Petrofina without requiring the state-owned oil company to show that it was a good buy. He warns that he is not afraid to break Ottawa’s polite old rules and name senior officials who abuse the public trust. But his real passion is getting into every protected crevice of government mismanagement, no matter who stands guard. “I believe the law gives me access to everything I need to know,” he says defiantly.
Even before he became the country’s eighth auditor general, Dye showed flashes of the same irreverence. The father of three was flattered when, without warning, he was summoned from his Vancouver accounting firm in the summer of 1981 to come to Ottawa and compete with 200 other accountants for the country’s largest auditing job. But his pleasure turned to annoyance when, after four months of delays and uncertainty, the government still had not picked the winner. So he wrote to Ottawa, telling the government to take his name off the list if it could not come up with a decision in two weeks. That got things moving. In less than a month he was brought to Ottawa, interviewed by the prime minister, and confirmed in his new job.
Dye was prepared to take a substantial pay cut and change his lifestyle to become Parliament’s spending watchdog but he would not—and still cannot—accept the pockets of secrecy that confronted him at every turn. He assumed that the auditor general—just like any private auditor—would have free access to all his client’s financial records. Naturally, he wanted the minutes of cabinet meetings in which key economic decisions were made. But Privy Council Clerk Pitfield, who controls access to those documents, balked, insisting that cabinet secrets could not be divulged to an outsider.
The next obstacle he ran up against frustrated Dye even more. He simply could not get a fix on the millions of tax
dollars that the government was pouring into hundreds of state-owned or -controlled corporations. There were a staggering 306 Crown companies at last count, most of them unknown to even the most well-informed taxpayer. The corporations spend $30 billion a year ($6.4 billion more than the government’s controversial deficit), they employ some 263,000 Canadians (more than the entire federal public service, if the RCMP and armed forces are excluded), and they spin off subsidiaries with abandon.
While the sheer immensity of the mysterious subgovernment worries Dye, he is even more upset by his, and the taxpayers’, inability to get the corporations to answer for their actions. “At present, the degree of parliamentary scrutiny to which Crown corporations are subjected varies from sporadic to virtually none,” he declared in his report. Via Rail, for one, refuses to provide reliable financial information to the government although it gobbled up $991 million in the past two fiscal years and has underestimated its spending in almost every annual forecast. Dye believes that the elected representatives of the people are practically powerless to manage the ever-expanding network. “It [Parliament] is becoming so isolated that it may not be able to exercise its responsibility to taxpayers,” he told reporters.
Minutes after Dye’s report was public, Treasury Board President Herb Gray urged the opposition to co-operate with the government in passing a bill to make Crown corporations more accountable to Parliament. But Dye has already said that the legislation falls alarmingly short of what is needed. The Conservatives, meanwhile, insisted that the government should sell off dozens of Crown corporations and set up a committee to study the problem.
Everywhere he turned Dye encountered a disturbing absence of basic operating information. He found that 30 per cent of federal employees did not know what they were expected to do in their jobs. He found managers who simply forgot, or neglected, to evaluate the performance of their workers, leaving the “drones” secure at their desks, wasting their time and taxpayers’ dollars. And he declared that the recent epidemic of government bailouts— Chrysler, Massey-Ferguson, Dome and Maislin—caused him extreme concern:
“How do we know whether these companies are meeting the objectives of the government if they [government officials] don’t even have criteria?”
Worried that his report would sound unduly negative, Dye carefully included a passage noting that he had encountered dedicated public servants—bureaucrats who were committed to making the government leaner and more efficient and politicians who were learning to pay attention to the bottom line. But, as he said later, “After those three nice pages, I go on to 620 more and describe reality.”
If he fulfils his term as auditor, Canadians can expect eight more similar reports from Dye. He says he may become the first auditor general to name names
of perpetrators in obvious cases of waste or deception. He plans to get into the books of every Crown corporation and force the government to justify its decisions to buy gas stations, bail out shaky companies, and pour money into a passenger rail network that looks as if it will go on losing money forever. He is going to try to brighten up his future reports, too, by adding more graphs and pictures, by breaking his annual bricklike publication into smaller reports on specific trouble spots, and by indulging in even more colorful writing. It will not make the message any more appetizing but it should make it a little easier to digest.
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