The Liberal government Wednesday defended its use of a secret fund earmarked to help pay for what it said were worthwhile Canadian projects.
Prime Minister Paul Martin pointed out that the fund has been around since Brian Mulroney was prime minister.
The government scrapped the National Unity Reserve in Tuesday's budget, saving the government a projected $100-million over three years but just $7.4-million in 2004-05.
However, the fund has been shrouded in secrecy. The government said Tuesday that the fund, earmarked to help save Canada, was such a state secret that its existence was never revealed in any budget document and its name never spoken to Mr. Martin in his years as finance minister.
Treasury Board President Reg Alcock responds to questions Wednesday in the House of Commons. (Tom Hanson/CP)
During Question Period, Opposition Leader Stephen Harper charged that the fund was a “secret Liberal slush fund.”
Mr. Martin shot back that other parties had used the fund at some time.
“The Honourable member would be welcome to come on this side. Most of his seat mates' former party members have come on this side of the House. The honourable member ought to know about the unity fund. in fact, it was set up in 1992 by former prime minister Brian Mulroney.”
The Conservatives also questioned how Mr. Martin could not have known about the fund during his time as finance minister and the Bloc Québécois said it was yet another example of non-transparency by the federal government.
“I guess the other possibility is the Prime Minister knew about this fund all along and didn't want to admit it,” said Conservative MP Monte Solberg.
Treasury Board President Reg Alcock said the fund was not a secret and was used to pay for major Canadian events.
“A fund that was identified in the departmental estimates, a fund that was distributed to departments to pay for things like Terry Fox ... worthy public events like Canada Day; this is not a big secret.”
He said all transactions related to the fund were reported.
“They've been reported through departments and reported in public accounts. So I'm not sure what the concern is.”
On Tuesday, federal officials couldn't initially say what year the fund was created, how much of its contents were spent in Quebec, or even whether it was meant as a tool to combat nationalist sentiment in that province.
They said only that the fund was created in the mid-1990s to encourage national unity, and that its annual budget fluctuated depending on the immediate need.
Mr. Goodale pegged the annual value of the fund at about $40 million — but hastened to add that Mr. Martin never used it since becoming prime minister Dec. 12.
He said the government remains attentive to national unity, “but there are better ways to do it than through the use of the unity reserve. So it no longer exists. It'll be phased out.”
Another senior government official was somewhat more blunt.
“It was a honey pot,” he told Canadian Press on condition of anonymity.
“It wasn't clear what the controls were, what the criteria were for accessing it. It's just not consistent with the values of sound fiscal management.”
Yet another official said every expenditure from the fund was personally approved by Jean Chrétien when he was prime minister.
He cited several examples of initiatives that received cash from the fund, like Canada Day parades and youth travel exchanges between francophones and non-francophones, and contact between aboriginals and non-natives through the Katimavik youth-development program.
The official said the fund was not used for other pro-federalist activities like public-opinion polling and advertisements.
He said it's common for governments to sometimes hide a cash reserve to maintain the upper hand in public-sector negotiations and out-of-court settlements.
But he smiled and declined to answer when asked whether this particular fund was made secret to keep the Parti Québécois provincial government of the day in the dark about how many federal dollars were spent to promote national unity.
One expert called the existence of secret reserves anything but normal.
“It surprises me,” said Ann Rooney of the Canadian Association of Chartered Accountants. “This is exactly the kind of area where transparency and accountability should be crucial.
