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Canada report

Sponsorship scandal drew in hundreds, institute says

By JIM FOX
Published July 10, 2005

The Fraser Institute says the enormousness of AdScam, Canada's sponsorship scandal, has been grossly underestimated.

Auditor General Sheila Fraser reported that about $100-million was directed to advertising agencies with links to the previous Liberal government of then-Prime Minister Jean Chretien for little or no work. Her accusation led to a federal inquiry and the arrests of some high-profile businessmen.

Mark Mullins of the institute, an independent public policy organization, called it a "pervasive and sustained operation to move taxpayer funds into private hands by staying close to the government of the day."

He said about 565 people and groups are implicated, and almost all of the donations intended to promote Canadian unity in Quebec instead went directly to the Liberal Party.

Prime Minister Paul Martin said it was the action of a small group of government workers and politicians, and that he - as finance minister at the time - had no knowledge of the impropriety.

Inquiry Judge John Gomery, who is to report on the scandal later this year, was unable to delve into details involved in the ongoing police investigations or pending trials, Mullins said.

The study warned that other scams of similar proportion are possible unless there's an overhaul of government financial practices and contracting.

Canadian cities have increased security for airline, railway, bus and light rail systems after the terrorist explosions on London's transit system.

Public Safety Minister Anne McLellan said the blasts prompted officials to tighten security on everything from international airline flights to cross-town subway lines.

"There is no specific threat to Canada or Canadians at this time, but you have to be prepared, you have to take all precautionary measures," McLellan said.

Convicted schoolgirl killer Karla Homolka, 35, is reportedly living in a Montreal apartment after her release from prison. The location is being kept secret, as she fears for her safety, lawyer Christian Lachance said. Homolka was given a 12-year prison deal for testifying against her ex-husband, Paul Bernardo. He is serving a life term in the rape and torture deaths of two Ontario teenagers and the drug-rape death of Homolka's 15-year-old sister, Tammy.

New Zealand has lifted its restrictions related to mad cow disease on Canadian beef. It is the 15th country to resume full or partial beef trading since borders were closed in May 2003 when a single case of the disease was discovered. Meanwhile, Canada is preparing an emergency aid program for producers if the U.S. border closes to all beef imports after court hearings this month.

Canada's dollar jumped Friday on news of a lower unemployment rate of 6.7 percent and the prospect that interest rates will rise later this year. The currency advanced to 81.95 U.S. cents, while the U.S. dollar was worth $1.2202 Canadian, before bank exchange fees.

The Bank of Canada key interest rate is 2.5 percent, while the prime lending rate is 4.25 percent.

Stock markets are higher, with Toronto's composite index at 10,169 points and the Canadian Venture Exchange at 1,733 points.

Lotto 6-49: (Wednesday) 5, 7, 23, 25, 31, 49; bonus 16. (July 2) 2, 18, 22, 38, 39, 44; bonus 10.

A missing cotter pin is blamed for a multimillion-dollar ferry crash at Horseshoe Bay terminal in British Columbia. Investigators found the pin wasn't replaced after a $35-million refit of the B.C. Ferries vessel Queen of Oak Bay. It allowed a nut to come off, causing a loss of power and the ferry to ram 22 boats. There were no injuries among the 544 passengers.

An Ontario judge banned striking electrical workers from blocking generating plants. Ontario's electricity system is put at risk when power workers are delayed by pickets, Judge Colin Campbell said. About 1,000 Hydro One workers have been on strike since June 1 over plans to reduce wages and benefits for new employees.

Nova Scotia Power wants to increase its rates by 15 percent next year. Company president Chris Huskilson said the privately owned power utility has to raise rates to keep pace with oil, coal and natural gas prices. The company relies heavily on imported coal and oil for power generation.

Jim Fox can be reached at canadareport@hotmail.com

[Last modified July 9, 2005, 23:35:17]