The Conservative Party of Canada said Monday that the controversial $4.9-million subsidy granted to a Paul Martin-owned company last June came from a cash-strapped agency amid unanswered ethical concerns from the industry officials involved in the deal.
Conservative MP Monte Solberg called for a Parliamentary Inquiry into the subsidy, saying he has documentation that shows that the industry officials involved in the deal asked repeatedly for assurances from Mr. Martin's Canada Steamship Lines Inc. that no member of Parliament would benefit from the deal.
“They never did get that,” Mr. Solberg said. “They never got it because the ethics counsellor intervened and said it didn't have to happen. The same discredited ethics counsellor that this government knows it has to get rid of.”
The Opposition was again pressing the government to explain how the Technology Partnerships Canada subsidy was issued to a CSL subsidiary, Canadian Shipbuilding and Engineering Ltd., despite a clause in the deal that states that no MP may benefit from such aid.
Ethics counsellor Howard Wilson gave a verbal go-ahead to give the controversial subsidy to one of Paul Martin's companies by overriding Section 13 of the subsidy agreement which states that "No member of the House of Commons will be admitted to any share or part of this agreement or to any benefit to arise therefrom."
“Why were the rules for the Prime Minister bent to allow him to receive that money?” interim Conservative Leader Grant Hill asked. “...Clause 13 is pretty specific. Clause 13 was broken. If Clause 13 is so useless that you could sail a steamship through it, what good is it?”
Industry Minister Lucienne Robillard denied the charge, saying that all appropriate rules were followed in the deal.
“Nothing illegal happened, nothing immoral happened by this government. They followed the ethics rules precisely. That's why the ethics councillor spoke out with respect to the access of the TPC program. All rules were followed.”
The Conservatives also asked Monday how the grant could have come from an agency that was already tight for money.
“We have learned that Technology Partnerships Canada was over-subscribed at the time that this grant was approved,” Conservative MP James Rajotte said in the Commons. “Does the Prime Minister expect us to believe that no undue pressure was brought to bear in terms of giving this grant to the Prime Minister's company?”
Government House Leader Jacques Saada said the Opposition has failed to provide any concrete evidence of wrongdoing.
“The members of the Opposition did not give us any evidence that anything illegal was done by anyone,” Mr. Saada said. “All they are giving is dates, figures ... this is an action that in no way shows that there was anything badly done.”
Officials in the TPC section of Industry Canada said it was Mr. Wilson who told them the subsidy to CS&E, which is 25-per-cent owned by Mr. Martin's family, could go ahead, despite their concerns.
“We now know it was not referred to the ethics councillor, we know that he pre-approved this loan to Canadian Shipbuilding and Engineering Ltd.,” Mr. Rajotte said Monday. “Why were the concerns of these public servants ignored by the Industry minister in giving taxpayer money to the Prime Minister's company?”
Mr. Wilson has confirmed he gave a verbal approval to TPC head Jeff Parker, saying it was the only sensible way to interpret the rules.
Mr. Wilson said the TPC section prohibiting a benefit for MPs is based on a section in the Parliament of Canada Act on conflicts of interest. However, in that law, it is followed by another section that states that being a simple shareholder in a company does not give rise to conflicts. Even though the TPC contract contains no such exception, Mr. Wilson judged it to be similar, and said CS&E's deal could go forward.
The $4.9-million "repayable contribution" was issued to CS&E in June, 2003, as a form of conditional loan to help develop a new line of Great Lakes vessels that could compete with Asian-made ships.
Last week Mr. Martin asked Auditor-General Sheila Fraser to review the $161-million in federal contracts issued to his family shipping empire over the past decade.
The Liberal government of Jean Chrétien reported to Parliament a year ago that companies in which Mr. Martin has a stake did only $137,000 worth of federal business in the past decade. Last week, Government House Leader Jacques Saada reported that the real amount was found to be far more — $161-million over the past 11 years — including $46-million in contracts issued when Mr. Martin was finance minister.
Dr. Hill dismissed the probe, saying the Auditor-General's report on the issue probably will not be ready until fall, well after the expected spring election.
CSL Group Inc., parent of Canada Steamship Lines and several other subsidiaries, were in a blind trust until Mr. Martin transferred control to his three sons last year.
With files from Campbell Clark
