Fellow Travellers

September 11th, 2016

“Whatever you do,” he said, “don’t submit an application.  When the Government tells you to submit an application, its their way of saying ‘no’.”

I had coffee with an M.P., a long-serving one.  He told me how things work in Ottawa.

Early in his tenure, this M.P. went on one of those fact-finding trips that so annoy taxpayers.  “It was a junket,” he said, “and all purportedly on Government business.”

One of the stops on this junket was the German office of Bombardier, the behemoth aerospace company.  Behemoth aerospace companies tend to get access to behemoth subsidies, and quite easily, and that fact had long fascinated this new M.P.

While his colleagues were glad-handing the businesspeople in a large reception hall, this new M.P. was at the back of the room, quietly milling about with Bombardier managers.  This MP was very new, had no portfolio, was a nobody really, and at that time looked rather like an articling student -anything but an MP.  Bombardier managers thought he was a Government staffer, so they had their guard down, they were speaking freely.

“So,” said the M.P., “why does Bombardier focus so much on selling to government?  Why not focus more on the private sector?” 

The reply was blunt, going something like this;  “Because governments are suckers.”

“Suckers?”

Apparently, yes.  “On any project, we quote them whatever figure they want and then, in practice, we’ll get whatever figure we want.” 

You see, if a government blows through a project budget, its politically cheaper to increase that budget than admit that they screwed up the project’s financial management.  In practice, external contractors can blow through budgets with impunity, knowing that the governments will always pay up.

How much will they pay up?

“About one third over contract, usually.” 

And that brings us back to applications.  Certain industries, like aerospace, enjoy a sort of incestuous relationship with government.  When they ponder a new project, they approach “their” people on the inside, in the civil service, to discretely arrange whatever budget they want for their project.  Both parties know how this works, and both happily play along.  In Ottawa, the “us and them” isn’t between business and government; its between insiders and the rest of us.

Consider, for example, that Bombardier was given $350MM in government finance in November of 2006.  But the Treasury Board approved the transaction after the fact, in 2007.  Bell Textron, another aerospace firm, received $115MM in financing in February, 2005.  But it was approved four months later, in June, 2005.  The funds flowed before the applications were even considered.

And it’s been like this for years.  Bombardier received $56MM way back in December 1996, and the Treasury Board approved the payment five months after it occurred, in May, 1997.  CAE Inc. received $31MM on March 7, 1997, the payment being approved two weeks later, on March 27, 1997.  Bombardier again, received another $85MM in October 1996, with permissions granted four months afterward.

Get the idea?  With the right connections, approvals happen before applications are even filed.  The real business of government is done behind the scenes, quietly, the applications processes, legal reviews, due diligence (etc), tend to be more for show than purpose.

“A few years ago, I got myself invited to a Privy Council [PCO] Meeting on the Hill.”  Our newly minted MP was finding his feet.  “As I walked into the conference room I saw a new face, a woman wearing almost un-Parliamentary attire.  It wasn’t a ballroom gown but it was just short of that, slightly slinky.  Some women can wear that and it works, but not many.  This one had the whole sex-as-power thing going on.”

The MP had just met the new PCO staff member.  The day before her appointment, she had been a manager at Bombardier.

“I’d never seen anyone work a room as well,” he said.  “She knew my name, greeted me by name, knew my committee appointments, everything about me on the Hill and yet I’d never heard of her before -she was smooth as glass.” 

She stayed at PCO for only one year.  One year to the day, by the way.  Just long enough to learn who had been given authorities over which files and whom to call to get things done.  When she left, she had a full rolodex, could call any government official at any time and would be treated as a friend and former co-worker.

And where did she go after PCO?  Why, back to Bombardier of course. 

“On Friday the PCO staffers did a farewell party for her, and by Monday morning she was back at Bombardier.  Didn’t skip a beat.”

Have you ever wondered why aerospace companies have such routine access to so much taxpayer money?  Have you pondered how they can default on 94% of their Federal loans without penalty?  Or how they can get away with seemingly anything and suffer no consequences, not even investigations?

Have you wondered how the Canadian Standards Association (CSA) gets away with all that they’ve been caught doing?

Well, it’s not the work of one person, and it’s not of one administration either.  Entities that ensconce their own people inside of government will clearly have more access to government, more influence over government, and more immunities for their actions than anyone else.

RestoreCSA readers already know the Government histories of Ash Sahi, the former CSA CEO, and John Walters at the SCC, and France Pegeot at DFO and Industry Canada and DoJ (etc.).  In this same vein, we find Ms Wendy Tilford.

Ms Tilford is a CSA Board member.  The CSA is part of Government.

Prior to her Board appointment, Ms Tilford was a Deputy Minister in the Province of Ontario.  She was responsible for “policy and programs,” including those dealing with electrical laws in that Province.  Clearly, being a Deputy Minister makes her part of government.

Prior to her stint in Ontario’s Government, Ms Tilford was the President of QMI.  Of course, QMI is no stranger to CSA.  It “audits numerous standards” that CSA develops.  QMI runs a sort of policing of CSA’s conduct.  Awkwardly, QMI was at that time a division of CSA.  So CSA was policing CSA.  And the CSA is part of Government.

Prior to her stint at QMI (a division of CSA), Ms Tilford held a “senior executive leadership position” at CSA Group itself.

Prior to her first tenure at CSA, Ms Tilford actually had a leadership position in a private sector company.  The company was Norigen Communications and, in January 2001, Ms Tilford was their Senior Vice-President of Customer Care.  Six months later Norigen declared bankruptcy.

Ms Tilford has also held Directorships at the Ontario Capital Growth Corporation, a government entity, the Toronto Financial Services Alliance, a government entity, and the Technical Standards and Safety Authority, which is absolutely not government.  No.  Noooo, not government.  They’re just “accountable to the Ontario Government”.

Wendy Tilford has spent the bulk of her years freely floating between government departments.

People tend to think of, say, the Department of Justice as distinct from Foreign Affairs or from Industry Canada, we think of each department as its own silo.  But civil servants change jobs all the time, routinely transferring from one department to another.  The silos are legally distinct but, in practice, they’re all staffed with the same content.  From a civil service perspective, there is no difference between the Department of Justice and the CSA; they’re both “one of us.” 

And that’s why CSA has so much public money and so little accountability. 

Here’s a pic that sums it up nicely.