Auditor General Kenneth Dye was unable to suppress a few smiles as he sat in a House of Commons gallery and watched MPs debating his annual report. Released last week, the 1¼ -inch-thick document gave scores of examples of how bureaucrats and politicians waste government money —adding, however, that administrative costs were slowly coming under control. Although Prime Minister Brian Mulroney was not mentioned by name, he was implicated in one of the most prominent cases cited in the report. Dye said that a decision last year to build a Quebec penitentiary in Mulroney’s riding of Manicouagan, rather than on the original Drummondville site, “cannot be justified on the basis of need.” The additional cost to taxpayers: $41 million. Said Liberal Leader John Turner: “The auditor general has caught the Prime Minister with his hand in the cookie jar.”
The prison move was one of many costly and bizarre blunders cited in Dye’s report. In one case, a Nova Scotia coffin maker received $400,000 in federal assistance to make glass-fibre coffins, but he sold only one in the first three years of business. In another, 37 tons of government publications were printed but never used. Dye’s report also warned that the federal government is facing a “time bomb” similar to the collapse of two western banks last year, because about 750 federally registered employee pension plans covering 600,000 workers are inadequately supervised by federal regulators. And he added that the finance department should start tracking the costs and benefits of tax deductions and incentives, many of them claimed by corporations, because they are costing taxpayers $28 billion annually.
Finance Minister Michael Wilson partially addressed that issue in a Commons speech on his plans to reform the tax system. Although details will not be announced until the next federal budget, expected in February, Wilson said that his goal will be to reduce personal income tax rates, increase corporate taxes and restructure sales taxes. As well, some expensive tax loopholes enjoyed by corporations and individuals will be closed. At the same time, the minister said at a Maclean's editorial session last week, the government will not attempt to increase its overall revenue from taxes. He added that his goal is to redistribute the tax burden in ways that will soften the direct impact on individuals. Said Wilson in the Commons: “The government believes that the personal
income tax Canadians are paying is too high.” But numerous opposition MPs said that additional consumer taxes that the government is planning would cancel out any benefits from income tax cuts.
Unlike previous years, Dye had some optimistic comments for the government. “My sense,” he told reporters,
“is that there is an interest in better accountability and better management.” As well, he indicted a job creation program enacted by the previous Liberal government. Many of the programs financed by the $204.7-million Employment Creation Grants and Contributions Program were pet proj-
ects of Liberal MPs and ministers that involved huge cost overruns and few benefits for the unemployed, the report said. A $1.5-million arena earmarked for the Quebec riding of Berthier-Maskinongé-Lanaudière, then held by Liberal MP Antonio Yanakis, evolved—with a stream of government funds —into a $4.9-million luxury sports centre. Yanakis has administered the complex since his electoral defeat in 1984.
However, Dye subjected the Tories to tough scrutiny over the Quebec prison controversy. In 1985 the federal government abandoned plans to build a new prison alongside an existing one in Drummondville in favor of a prison in Port Cartier on the north shore of the St. Lawrence River. That decision, said Dye, will mean an extra capital cost of $11 million as well as an extra $30 million in operating costs over the life of the prison. Treasury Board President Robert de Cotret denied opposition charges that irregularities had occurred in tendering contracts for the prison, but Mulroney’s role in the decision remained unclear. Government officials confirmed last week that an adviser to the Prime Minister, Simon Landry, sat on a government committee monitoring the project. But Public Works Minister Stewart Mclnnes denied opposition charges of political interference, saying such committees existed to keep interested parties aware of government construction projects.
Last week Mulroney continued to defend the decision to build the prison in Port Cartier 2 “because it is an economically depressed area.” But opposition MPs say that the relocation was designed to curry favor with voters in the Prime Minister’s home riding. The 250-cell prison, they noted, should open for business in the fall of 1988—just in time for the next federal election.
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