Table of Contents

• Introduction
• Guiding Principles on Standing
• Disposition

INTRODUCTION

I have been appointed by Order in Council P.C. 2004-110, sometimes referred to in this Ruling as the "Terms of Reference" or "mandate", to conduct a factual inquiry and then to make recommendations. In the first part of my mandate, I am to investigate and report on the questions raised by Chapters 3 and 4 of the November 2003 Report of the Auditor General of Canada to the House of Commons with regard to the sponsorship program and advertising activities of the Government of Canada, including

1. the creation of the sponsorship program,
   
   
2. the selection of communications and advertising agencies,
   
   
3. the management of the sponsorship program and advertising activities by government officials at all levels,
   
   
4. the receipt and use of any funds or commissions disbursed in connection with the sponsorship program and advertising activities by any person or organization, and
   
   
5. any other circumstance directly related to the sponsorship program and advertising activities that the Commissioner considers relevant to fulfilling his mandate.
   
   

The first part of the mandate is referred to in this Ruling as the "Factual Inquiry".

The second part of my mandate is to make any recommendations that I consider advisable based upon the findings in the Factual Inquiry to prevent mismanagement of sponsorship programs or advertising activities in the future, taking into account certain initiatives announced by the Government of Canada on February 10, 2004 which are detailed in the Order in Council.

This latter aspect of my mandate is referred to as the "Recommendations".

The following paragraphs in the Terms of Reference are relevant to this Ruling:

5. the Commissioner be authorized to adopt any procedures and methods that he may consider expedient for the proper conduct of the inquiry, and to sit at any times and in any places in Canada that he may decide;
   
   
6. the Commissioner be authorized to grant to any person who satisfies him that he or she has a substantial and direct interest in the subject-matter of the inquiry an opportunity during the inquiry to give evidence and to examine or cross-examine witnesses personally or by counsel on evidence relevant to the person's interest;
   
   

A. Factual Inquiry

As already announced on May 7, 2004, I will conduct the Factual Inquiry by way of evidentiary hearings at which witnesses who give evidence under oath or affirmation will be examined and cross-examined. Documents will be produced, by these witnesses or by other means. I will receive closing submissions at the end of the Factual Inquiry.

The Draft Rules of Practice and Procedure proposed for use in the Factual Inquiry were announced in my Opening Statement made on May 7, 2004 and were published on the Commission's web site, www.gomery.ca. I invited interested parties to suggest modifications to these Rules not later than May 31, 2004. Following receipt of one submission from counsel representing the Government of Canada, articles 17, 39 and 40 of the Draft Rules have been amended. I draw the attention of interested parties to other changes in the Draft Rules to the definitions of the terms "full standing participant" and "partial standing participant". From now on a full standing participant will be known as a Party and a partial standing participant as an Intervenor. The Rules in final form have been published on the Commission's web site. Persons or groups participating in the Inquiry should visit our web site regularly for information on practical details and scheduling.

B. Recommendations

The formulation of the Commission's recommendations will follow the completion of the Factual Inquiry and will not be preceded by further formal evidentiary hearings. In due course the Commission will announce the procedure it intends to follow preparatory to the formulation of its recommendations.

GUIDING PRINCIPLES ON STANDING

In its Opening Statement the Commission invited persons interested in the Factual Inquiry to apply for standing not later than May 31, 2004. Prior to that date, I received thirteen applications from parties seeking standing as Parties or as Intervenors. Since that date, I have received requests to extend the delays from two applicants who wish to apply for standing. All fifteen applications were the subject of oral presentations in Ottawa on June 21 and 22, 2004. At that time I exercised my discretion to grant the requests of the two late applicants to be heard on the merits of their applications. I also received a late request from a private citizen which I dismissed prior to the hearings both as being outside the delay and for not disclosing a sufficient interest.

Before I address the merits of each of the fifteen applications, it is useful to summarize the general principles that have guided my decision on standing.

I am committed to ensuring that the Inquiry is both fair and thorough, and that in the course of the Inquiry I obtain and consider all relevant information relating to the issues identified in the Terms of Reference.

The Inquiry will examine not only what happened with respect to the sponsorship program and the advertising activities of the government as described in the Report of the Auditor General, but will also examine the circumstances surrounding the creation of the sponsorship program, its origins in preceding government initiatives, and the motivations, whether valid or not, for the manner in which it was organized. Similarly, the Inquiry will investigate the reasons why and how the government's sponsorship program and advertising activities were administered as they were. I intend to interpret the scope of my mandate broadly, with a view to understanding the extent to which these government activities were mismanaged, if indeed they were, and any improper use of the funds disbursed, if that occurred. Only in this way will it be possible to formulate intelligent recommendations to prevent mismanagement of similar activities in the future.

At the same time, I must continually bear in mind the importance of completing this Inquiry as expeditiously as is reasonably possible, particularly in light of paragraph (l) of the Terms of Reference which directs me to submit my Report on an urgent basis. In the past, some public inquiries have suffered from diminished credibility because of undue delay. I intend to act so as to avoid delay, repetition and the presentation of irrelevant or unhelpful evidence which will not assist me in making the findings called for by the mandate.

One of the principles which will guide the conduct of this Inquiry is that of transparency and openness. However, some prospective witnesses are facing criminal charges relating to the subject matter of the Inquiry and it may be necessary to hear all or parts of their evidence in camera or subject to an order of non-publication, in order to assure their right to a fair trial. The Commission may be requested to hear other witnesses in camera or confidentially for other reasons. These matters will be dealt with by the Commission as they arise but to the greatest extent possible I will strive to ensure that the work of the Inquiry is accessible to the public and as open as possible.

I will rely upon Commission counsel to assist me throughout the Inquiry. They will ensure the orderly conduct of the Inquiry and have standing throughout. Commission counsel have the primary responsibility for representing the public interest, including the responsibility to ensure that all facts and circumstances that bear upon the public interest are brought to my attention. Commission counsel do not represent any particular interest or point of view, and their role is not adversarial or partisan.

As provided under the Rules of Procedure and Practice, there are two categories of participation in the Factual Inquiry. It is foreseen that parties may be either:

1. Parties, because their rights are directly and substantially affected by the Factual Inquiry; or
   
   
2. Intervenors, where they are found to have clearly ascertainable interests and perspectives useful to the Commission's mandate. In such cases I am entitled to determine special conditions under which a party may participate.
   
   

In addition, any witness called to testify may be represented by counsel while testifying, and may be questioned by his own counsel. In other words, counsel for a witness will have standing for the purpose of his or her client's testimony at the Inquiry.

As will be seen from what follows, I have not granted to some applicants the right to participate that they sought. However, should circumstances change during the course of the hearing, I will be prepared to reconsider the matter and vary my earlier Ruling. For example, applicants having intervenor standing may apply for party standing if circumstances warrant.

What constitutes "a substantial and direct interest in the subject matter of the Inquiry"? Based upon what has been decided in comparable cases, the interest of the applicant may be the protection of a legal interest in the sense that the outcome of the Inquiry may affect the legal status or property interests of the applicant, or it may be as insubstantial as the applicant's sense of well-being or fear of an adverse effect upon his or her reputation. Even if such a fear proves to be unfounded, it may be serious and objectively reasonable enough to warrant party or intervenor standing in the Inquiry. What does not constitute a valid reason for a participant's standing is mere concern about the issues to be examined, if the concern is not based upon the possible consequences to the personal interests of the person expressing the concern. As was stated by Campbell J. in Range Representative on Administrative Segregation Kingston Penitentiary v. Ontario (1989), 39 Admin. L.R. at p. 13, dealing with a coroner's inquest:

Mere concern about the issues to be canvassed at the inquest, however deep and genuine, is not enough to constitute direct and substantial interest. Neither is expertise in the subject matter of the inquest or the particular issues of fact that will arise. It is not enough that an individual has a useful perspective that might assist the coroner.

This extract was cited with approval by Mr. Justice O'Connor in his Ruling dated May 4, 2004 in the context of the Arar Commission of Inquiry.

This having been said, it is not possible to enumerate an exhaustive list of the factors to be taken into consideration when determining whether an applicant's interest is sufficiently substantial and direct to the subject matter of the Inquiry. The Terms of Reference, in stating that the Commissioner must be satisfied that an applicant has such an interest, leave me with a certain degree of discretion, which must be exercised judiciously, to decide which persons or groups shall be authorized to participate, and to what degree.

DISPOSITION

A. Party Standing

I come to the conclusion, for the reasons given in each case, that the following persons or organizations have rights, privileges or interests that may be affected by the outcome of the Factual Inquiry. They therefore have a substantial and direct interest in the subject matter of the Inquiry sufficient to warrant being granted party standing, and will be entitled in each case to participate fully in the Inquiry with respect to the matters relevant to their interests.

1. Attorney General of Canada, representing the Government of Canada.

The Government of Canada administered the sponsorship program. It authorized and paid for sponsorship grants and commissions, and authorized as well certain advertising activities, all at the heart of the November 2003 Auditor General's Report and concerns. It risks being reproached to the extent that there was any mismanagement or impropriety. The Attorney General represents not only the Government of Canada but also its employees and representatives, many of whom will be called to testify. His concerns are substantial and he has the required interest to participate fully in all phases of the Inquiry.

2. Canada Post Corporation

Two transactions involving this Crown Corporation are directly referred to in the Auditor General's Report as giving cause for concern in the context of the sponsorship program. It is probable that Canada Post's methods and procedures in selecting advertising agencies will also be examined in the course of the Inquiry. It should therefore be granted party standing for Phases IA and IB of the Inquiry.

3. VIA Rail Corporation

Like Canada Post, VIA Rail is a Crown corporation specifically mentioned in the Report of the Auditor General, and will be the subject of evidence to be presented in Phases IA and IB of the Inquiry. Some of its present and former employees will be heard as witnesses. It is entitled to be represented throughout the Factual Inquiry and to participate fully.

4. The Right Honourable Jean Chrétien

Mr. Chrétien was the Prime Minister of Canada during the relevant period when the sponsorship program was administered. He alleges that he had a unique role in the creation of the program. It is not unreasonable to consider, as pleaded by his counsel, that he may be directly and substantially affected by the findings of fact or recommendations resulting from the Inquiry. He seeks standing as a Party for Phases IA and IB. It appears that his interest is direct and substantial and, accordingly, he will be entitled to be represented throughout the Factual Inquiry and to participate fully.

5. The Honourable Alfonso Gagliano

Mr. Gagliano was Minister of Public Works and General Services from June 11, 1997 until January 14, 2002, and his ministry oversaw the administration of the sponsorship program during that period. At that time, he also had other ministerial responsibilities which may be relevant. He alleges that his reputation has been adversely affected by the findings of the Auditor General in her Report. He has therefore a direct and substantial interest in many aspects of the Factual Inquiry and will have the right as a Party to fully participate in it.

6. Joseph Charles Guité

Mr. Guité describes himself in his application as a senior public servant and the central figure involved in the management of the sponsorship program and advertising activities. He is now the subject of a criminal prosecution directly related to the matters dealt with in the Auditor General's Report. He will surely have to testify at the Inquiry. His reputation is at risk and his direct interest in the issues to be dealt with by the Commission is apparent and substantial.

7. Jean Lafleur

Until the business was sold as of January 1, 2001 to Communications Groupdirect Inc., Mr. Lafleur, as president of Jean Lafleur Communication Marketing Inc., was actively involved in the transaction and execution of numerous sponsorship contracts and related advertising. He or his firm received substantial revenues in the form of commissions and other remuneration as a result of the sponsorship program, and are the subject of unfavourable comments in the Report of the Auditor General. His direct and substantial interest is evident.

8. Jean Pelletier

Mr. Pelletier acted as Director of the Office of the Prime Minister of Canada from November 4, 1993 until his retirement on June 30, 2001. He alleges that in that capacity he had a direct knowledge of the circumstances surrounding the creation of the sponsorship program and its objectives, although he denies any direct involvement or knowledge of its administration. Nevertheless, there have been public suggestions that he had some degree of implication in the management of the program, or knowledge of at least some of the matters referred to in the Report of the Auditor General. These suggestions have, according to Mr. Pelletier's application, put at risk his reputation as a competent and honest public servant. The protection of his reputation is the primary reason for Mr. Pelletier's application for standing as a Party. His concern is legitimate.

9. Ranald Quail

Mr. Quail served as Deputy Minister of Public Works and Government Services Canada from July 1993 until April 1, 2001. He was the most senior official in that government department during the time period which will be the focus of the Inquiry. As such, he was at least nominally responsible for the proper administration of the sponsorship program and advertising activities which are the subject of the Auditor General's Report. He has an interest in defending his record as a public servant and, specifically, his conduct and actions during the period relevant to the Inquiry. As his counsel points out, Mr. Quail's reputation may well be affected by the observations and findings of the Commission. For these reasons, he is entitled to standing as a Party.

10. Business Development Bank of Canada

The Business Development Bank of Canada is a Crown corporation which is the subject of unfavourable comments in the Auditor General's Report. For the reasons already given with respect to Canada Post and VIA Rail, it should have the right to participate in the Inquiry, as a Party.

B. Intervenor Standing

I am persuaded, for the reasons given in each case, that the following applicants should have standing before the Inquiry as Intervenors, since, although they do not appear to have a direct and substantial interest in the subject matter of the Inquiry, they have clearly ascertainable interests and perspectives essential to the Commission's mandate.

1. B.C.P. Ltd.

B.C.P. Ltd. is a public relations firm which is mentioned in the Report of the Auditor General in relation to a sponsorship contract awarded to Tourism Canada. It seeks intervenor status only to enable it to correct any inaccuracies in the Report or misperceptions created by it. It should be granted the status it has requested.

2. Office of the Auditor General of Canada

Since the mandate of the Commission is directly related to the Report of the Auditor General, the latter's participation in the Factual Inquiry is essential. She has a useful perspective on the issues relevant to the Commission's mandate. At the time she and other representatives of her office are called upon to testify, they will be entitled to representation by their counsel, including the right to re-examine, and the Office should be in a position to make submissions to the Inquiry at its conclusion.

3. The Public Service Integrity Officer

On November 6, 2001, by Order in Council, Dr. Edward Keyserlingk was appointed as the Government's first Public Service Integrity Officer, to act in that capacity in accordance with the Policy on the Internal Disclosure of Information concerning Wrongdoing in the Workplace adopted by the Treasury Board of Canada pursuant to Section 11(2) of the Financial Administration Act. Dr. Keyserlingk's mandate is to deal with internal disclosures by public servants, to investigate allegations of wrongdoing in the public service, and to protect from reprisal public servants who make good faith disclosures. He seeks party standing so as to effectively offer protection against reprisal to public servants who will appear before the Commission.

Public servants are automatically entitled to be represented by counsel for the Government of Canada, unless they opt to be represented by counsel of their own choosing for the purposes of their testimony before the Commission. If they choose to be represented by counsel for Dr. Keyserlingk, the latter will automatically have standing to put questions to the witness and generally to act on his or her behalf. If the witness chooses to be represented by the Attorney General of Canada or by another attorney, Dr. Keyserlingk's counsel would have no right to intervene.

Nevertheless, the mandate of the applicant entitles him to be present throughout as an Intervenor, since he may have valuable perspectives and representations to offer, especially at the close of the Factual Inquiry.

4. Conservative Party of Canada

The Conservative Party of Canada, like the Bloc Québécois, seeks full standing as a Party. It alleges that it has a direct and substantial interest in the issues to be considered in Phase IB of the Inquiry, in the following respects:

1. it is interested to identify those persons or organizations who received the funds disbursed by the government, to know the purpose for which the funds were disbursed, and the extent of the value for money received by the Government of Canada.
   
   
2. it is interested to determine whether there was political influence on the distribution of the funds; and
   
   
3. it is interested to inquire into the sufficiency of external monitoring and financial controls used by the recipients of the funds.
   
   

These would clearly be questions relevant to the Commission's mandate, and central to its Inquiry, especially in Phase IB, but it is not at all apparent that a political party, in this case one opposed to the party in power, has a direct and substantial interest of its own in these questions, other than its partisan interests. These play an essential role within the political system but should not form part of the Commission's proceedings. Any misconduct which the Commission might find could result in political consequences, whether in Parliament or in an election, and therefore could be of great importance politically to the applicant. However, such political consequences should not be within the Commission's contemplation when drafting its Report and recommendations.

On the other hand, to the extent that the applicant's interests are not purely partisan and are those of the public interest, they are not distinct from those of every citizen concerned to understand the matters which are the object of the Inquiry.

I come to the conclusion that the applicant does not have a direct and substantial interest, as that expression has been defined in the jurisprudence cited to me, in the issues before the Commission.

There is an additional reason why political parties should not be given party standing. The Commission's jurisdiction is limited to an examination of the administration of the sponsorship program and advertising activities of the government, and to uncover all relevant facts resulting from any mismanagement or impropriety in the course of that administration or inappropriate use of the funds disbursed. The mandate of the Commission does not extend to an assessment of the political wisdom of the sponsorship program; that is a matter of government policy which the Commission has no mandate to examine, although it will inevitably learn, in the course of the hearings, what motivated the government to create the program and to disburse funds in accordance with the policy objectives it sought to promote. If the Commission were to permit a debate to occur in the course of the Inquiry as to the legitimacy of those objectives, or as to the desirability, from the public's point of view, of the sponsorship program and advertising activities of the government, the Commission would be distracted from its real objectives, and would waste valuable time in examining questions better left to the political arena. As was stated by Mr. Justice Dennis O'Connor in his Ruling on Standing and Funding at the Walkerton Inquiry, it is generally not desirable that a public inquiry be allowed to become a partisan debate between opposing political factions; such debates are better left to another forum.

I adopt his reasoning entirely; he says, with reference to a request by the Ontario New Democratic Party for standing, the following at page 81 of his Report.

The second ground upon which the ONDP Group claims an interest for which it ought to be granted standing is that the ONDP was vocal in calling for the government to establish this Inquiry. In my view, the fact that a political party or its members call for the government to establish a public inquiry, without more, does not create an interest within the meaning of s.5(1) of the Act.

Finally, I do not think that this is a case in which I should exercise my discretion to grant standing. I say this for two reasons. First, parties who have been granted standing will bring a sufficiently broad range of perspectives to enable me to fulfil my mandate. In granting standing, I have attempted to ensure that all perspectives, and in particular those such as the ones held by this applicant, which question the effect of government policies, practices and procedures, are fully represented. It is essential that there be a thorough examination of these factors in relation to the events in Walkerton. I am satisfied that this will occur.

The second reason why I am not inclined to grant this group standing is that it is, in my view, generally undesirable to use public inquiries to have political parties advance their positions or policies. There are other more appropriate arenas for them to do so. Mr. Jacobs, counsel for the ONDP Group, recognized this concern and assured me that this was not the motivation underlying the application. I accept Mr. Jacobs' assurance without reservation. Nevertheless, I think there is a danger that this applicant's participation could be viewed by the public as politicizing the Inquiry in a partisan way. To the extent possible, that result should be avoided.

Finally, I note that the considerations in granting standing to a political party differ from those which apply to a government. Governments play a different role and have different responsibilities than do political parties. Moreover, the ONDP, unlike any other applicant, will have an opportunity to participate in the subject matter of the Inquiry by responding to my Report in the Legislature.

Although it is true that in the past some public inquiries have granted standing to political parties, others have refused such standing. It may be concluded that each case has to be decided on its individual merits.

In the circumstances of the present Commission, I find that it would be undesirable to give party standing to political parties which were, at the time of the events with which the Commission is concerned, in opposition to the government.

Nevertheless, I am satisfied that the applicant has clearly ascertainable interests and perspectives essential to the Commission's mandate, and that its participation as an Intervenor would enhance the work of the Commission in both Phases IA and IB. The Conservative Party of Canada represents a substantial body of opinion in Canada. It has a valuable perspective on public administration, the roles of office-holders and parliamentarians, and the process through which public funds are disbursed. The Commission would accordingly benefit from its participation, assistance and representations as an Intervenor.

5. Bloc Québécois

The application of the Bloc Québécois will be dealt with in the same manner as that of the Conservative Party of Canada, for the same reasons. One additional comment is necessary, because of allegations made on its behalf in its written application, and repeated at the hearing on June 22nd.

The Bloc Québécois alleges that it has a particular role to play in the Inquiry because of its unique position as a political party which advocates the sovereignty of the Province of Quebec and its eventual independence from the Canadian federation. Firstly, it alleges that the stated objective of the sponsorship program was the promotion of federalism in Quebec, and that this promotion sought to distort the political debate and to influence unfairly Quebec voters away from the political option which the Bloc Québécois seeks to encourage. Secondly, it alleges that funds originating from the sponsorship program and advertising activities of the government were diverted into the electoral funds of the Liberal Party of Canada, to the detriment of the Bloc Québécois; this allegation, however, is not to be found in the Report of the Auditor General.

The applicant seeks to be allowed to introduce evidence in relation to these allegations into the hearings before the Commission.

These are two conceptually distinct grounds. The issue of whether public funds should have been used to promote federalism in Quebec is a matter of political debate. It should be dealt with in the political forum. As earlier stated, it does not form part of the Commission's mandate. This is not, therefore, a basis for the Bloc Québécois to be granted party standing.

In contrast, the allegations with respect to the diversion of public funds to a particular political party fall squarely within the Commission's mandate. It is not necessary to grant party status to the Bloc Québécois in order for the Commission to deal with possible evidence on this matter.

Accordingly, the Bloc Québécois' application for party standing is denied. However, for the reasons set out in relation to the Conservative Party application, it is granted status as Intervenor.

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John H. Gomery, Commissioner