While Prime Minister Trudeau wound down his lofty peace mission in Eastern Europe last week, his fellow Liberals concentrated on baser political concerns. In the House of Commons MPs eyed the doleful spectacle of Finance Minister Marc Lalonde apologizing to Tory Leader Brian Mulroney for the incorrect charge that Mulroney advocated tax breaks for the wealthy. In the back rooms party strategists struggled to ensure that the government gives legislative priority to bills that appeal to traditional Liberal voters, such as ethnics and women—even as a party report concluded that affairs were “in a state of considerable disarray.” And behind the scenes some Liberal MPs were enraged about a new and potentially damaging issue: the use of government funds for large-scale patronage projects.
Maclean’s has learned that the government afforded all 145 Liberal MPs access to $500,000 for job creation projects in their ridings last year. The money comes from the $710 million
added to the employment initiatives program by Finance Minister Marc Lalonde in his April 19 budget. Most of the Liberal projects were funded by the budget’s $150-million addition to the Employment Creation Grants and Contributions Program. According to Toronto MP Ursula Appolloni, each MP was asked to come up with projects that would create jobs—and be prepared to defend their usefulness. The limit was “more or less” $500,000 per riding, said Appolloni. If the civil servants in the employment department who evaluated the suggestions objected to a scheme, they could reject it. If the civil servants approved, Liberal MPs were then free to announce their programs—so long as they followed an established press release format. The first sentence had to read, “[The MP’s name] on behalf of [Employment Minister] the Honorable John Roberts today announced. . . .” And the last sentence had to state, “The grant was made possible through new job creation funding announced by the Honorable Marc Lalonde, minister of finance, in his April 19 budget and is part of the federal government’s program to
create employment opportunities for Canadians.”
Although job creation projects are funded in all ridings, only Liberal MPs were asked for suggestions and were guaranteed a set amount of funding. With all but two Liberal seats in Eastern Canada, the procedure effectively denied the West the same access to the national treasury. Last month Tory MP James McGrath asked for a list of the number and locations of jobs created under Lalonde’s budget program. He also pointedly asked in a written question if all MPs were “asked to submit proposals for projects under this program.” So far, the government has not answered his questions. Last week Tory MP Perrin Beatty said that Opposition MPs have never been asked to submit projects for the budget program—nor have they been guaranteed funding, although some projects have been started in Opposition ridings. “What the Liberals have done is to set aside a drawerful of cash for their re-election purposes,” he told Maclean’s. “Obviously, public funds are being used for entirely political purposes.”
Although the patronage fund has had an impact on ridings across the country, the only inkling of its existence came last fall, when MP Roland de Corneille used his $500,000 on a new social services agency, Alliance Community Services, in his north-central riding of Toronto Eglinton-Lawrence. At the time it was not known that this was part of a larger scheme. De Corneille backed the agency because he was convinced that, unilingual Italians in his riding were not being properly served by government. The agency, which opened last month, plans to hire a total of 21 workers to counsel the Italian community on health, education, jobs and family concerns. But the grant enraged established immigrant aid agencies such as COSTI-IIAS Immigrant Services, which charged that the new association had no proven record and met few of the funding requirements.
It also upset many Liberal MPs who noticed that several Italian-Canadians associated with the centre had strong links with Trudeau’s former principal secretary, Jim Coutts. He has won the nomination as the Liberal candidate in Toronto’s Spadina riding, and—despite his denials—there is widespread belief in the party that Coutts wants to become Liberal leader. Some MPs believed that the agency money was a reward to Italian-Canadians for their political loyalty to Coutts. Indeed, some MPs— such as former Liberal cabinet minister James Fleming, a longtime foe of Coutts—charged that the group was trying to take control of riding association executives in Metro Toronto. If a leadership convention is called, Coutts critics argued, riding executives could help ensure that the constituency sends delegates who are loyal to Coutts. That could make Coutts a kingmaker because he would have a secure bloc of votes.
Last week Coutts flatly denied charges that he was involved in any plot to build up his power base. “I am not organizing to get Jim Fleming or anybody,” he declared. Giacomo Capitanio, a former real estate salesman who is now the financial director of Alliance Community Services and who has been active in signing up new Italian-Canadian members in several Toronto constituencies, denied that he was working for Coutts or trying to harm Fleming. “How can you stop me as a Canadian from participating in the democratic process?” he asked of his recruiting activities. And he defended the new agency, arguing that 400,000 Toronto Italians need more help than COSTI-IIAS can provide. “We try to help the community and ask for funds like any other agency,” argued Capitanio. “COSTI feels it has a monopoly to serve the Italian community. I don’t know why they pick on us.”
Still, many Toronto MPs remained concerned about the patronage system in general, and the de Corneille grant in particular. They have taken the unusual step of publicly criticizing it. Fleming even wrote to supporters asking them to join the riding association quickly to block a “takeover” of Italian-Canadians friendly to Coutts. And he criticized de Corneille’s shortsighted goals. Said Fleming: “I am using my money [the $500,000] to fix up eight or 10 parks, to fix up facilities for Italian senior citizens, to build picnic shelters and to help the handicapped. I think I’ll create a heck of a lot more jobs. And the facilities will be there five or 10 years later.” As for the Coutts connection, Fleming said: “Is there a link to Coutts and Spadina? I can only see what I see.” Appolloni said that the controversy has “split the Italian community and antagonized various other ethnic communities.” But she did not believe that Coutts is involved because “he is usually more subtle—and, frankly, the whole thing has really outraged the Toronto caucus.”
Toronto MP Aideen Nicholson, a social worker, argued that the project also violated all of the traditional rules for funding social agencies. The federal government does not usually provide basic administrative funding for local agencies, traditionally a responsibility of the provinces. It occasionally provides part of the core funding for the national headquarters of a Canadian agency. But for de Corneille’s agency, Ottawa provided all core funding. The project is also open-ended and thus creates a funding dependency when the grant runs out. Asked Nicholson: “So what happens to the clients when the grant expires?” According to Fleming, in addition to Capitanio the centre also employs two other Liberals: AÍ Ruggero, the former executive assistant to Liberal MPP Michael Spensieri; and Fulvio Sansone, a former member of Fleming’s riding association. Capitanio said that about 75 per cent of his current staff of 14 are “students.” Nicholson countered that professional agencies tend to use only one or two of the best students to work on specific tasks under the guidance of senior staff. “I don’t want to criticize de Corneille,” she added, “but this is not the way to plan social services.”
The alliance uproar dramatizes the extent to which worries about the party leadership—and the upcoming election—have preoccupied and distracted the government. In their determination to use all resources to win the election fight, the Liberals may have only harmed their case. And Trudeau, home from Eastern Europe late last week, may wish that he had tarried longer on the international stage. &t;£>
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