SPEECH TO THE OFFICE OF THE AUDITOR GENERAL
THE CHANGING ENVIRONMENT -- A MEDIA PERSPECTIVE
Thank you very much Rick. And thank you to all the conference organizers for inviting me to what is obviously an important event for the Office of the Auditor General - and by extension for the government. I'm excited about being able to share some of my ideas and observations with an audience of true professionals, who play such a crucial role in our democracy. I want to warn you at the outset that my opinions are not widely held - especially on Parliament Hill - and they might cause a few of you to shake your heads in disagreement. But our democratic system is based on wonderful tenets, such as freedom of association and freedom of speech. So, let's take advantage of these liberties.
I'd like to begin with a few more details about my background. For several years, I worked as a producer for various CBC programs, ranging from "Radio Noon" to "The Journal" with the late Barbara Frum on CBC television. Most of my employment with the public broadcaster was during the years of the Mulroney government and I found the corporation's desperate attempts to avoid embarrassing Ottawa very frustrating indeed. I witnessed a kind of self-censorship that was both frightening and enlightening. Of course, as we all know, the don't-rock-the-boat ploy didn't work and the CBC lost millions of funding dollars.
When the Bob Rae government came to power, I was more than willing to leave journalism - which I considered mainly an adjunct of the entertainment business - and I become a political spin doctor for a cabinet minister. For the next year, I experienced one of the most fulfilling periods of my professional life. I worked for the Minister of Northern Development and Mines and, partly because we were a long way from the machinations of Queen's Park, we accomplished a lot. When asked what I did for a living, I would say simply: "I save towns." Kapaskasing, Elliot Lake, Sault Ste. Marie, Atikokan - we were trying our best to maintain jobs, families, and communities. Unfortunately, our mission came to an abrupt end when the minister, Shelley Martel, got involved in a scandal and I spent the next six months watching the government twist and turn under the glare of the media. It wasn't pleasant. I call it "Six Months of Hell with Shelley Martel."
After I left government, I came to Ottawa and worked for a coalition that was opposed to the North American Free Trade Agreement (NAFTA). However, I didn't last very long with this organization. By that time, I had little patience with politicians - elected or non-elected. There's just something about power ... any amount of power ... but that's another speech. So, I returned to journalism where I felt most comfortable and independent - and, as Rick mentioned, I have been successful enough to have signed a book contract. Of course, now I have to do the work. Actually, my career path has provided me with a wonderful lesson on being true to yourself - as they say. I didn't betray my principles and I got ahead. I think it's a good message, especially for a Principals' Conference.
In retrospect, the time I spent with CBC, the Rae government, and the anti-NAFTA lobby group gave me an appreciation of three key sectors of our political system - the media, government, and non-governmental organizations. It's an important perspective to have.
I'd like to talk now about the country and the world in which we all function and try to survive. I want to broaden the discussion before I focus on your Office and work, because I feel that few Canadians realize what is happening at the end of the 20th Century and the Second Millennium. There's a global revolution going on and we seem to be sleeping through it - at our peril.
What do I mean by revolution? Several things. To begin with, the consolidation of what former U.S. President George Bush called the New World Order. Soviet-style communism lost; a new brand of cowboy capitalism and free enterprise won. The world was once divided into two militaristic camps; now, it seems to be splitting into three trade zones - sometimes referred to as "The Triad" - the Americas, the European Union, and Asia. And wealth, which is of great relevance to your work, is shifting from the public sphere to the private. Of the top 100 economies in the world, 51 are corporations - not nations. The economic might of Wal-Mart, which ranks as number 12 on the Top 100 list, is greater than that of 161 countries. That's a lot of Sales Associates.
What does this mean in terms of the distribution of money? To put it simply, the 200 largest corporations in the world have the same dollar-power as the bottom four-fifths of all the men, women, and children living on this planet. At the same time, those mega-businesses don't really provide their share of jobs - they employ about three-quarters of one per cent of the world's workforce. No wonder we have unemployment problems.
This is what I mean by a revolution. It is a transfer of power. There was a time when the Crown and, later, elected governments chartered corporations individually - giving each one specific marching orders concerning its role and duty as a social entity. To be incorporated was a privilege and business leaders appreciated that. Now, the tables have turned. International trade agreements - which have as their basis the economic freedom of corporations - are curtailing government powers to such an extent that politicians almost have to ask corporations what THEY are allowed to do! Can we ban the additive MMT from gasoline? Well, not without being sued by the MMT manufacturer under the terms of NAFTA. Can we prevent U.S. magazines, such as Sports Illustrated, from selling cheap ad space and swamping our markets? Not the way we were doing it, according to the World Trade Organization. Our politicians - the ones who signed these highly-limiting agreements - appear helpless. And this is just the beginning. In spite of negotiation problems, I believe the Multilateral Agreement on Investment or some form of it is still on the horizon and, next month, Prime Minister Chretien will be in Santiago, Chile, for the Summit of the Americas - which will integrate most of the hemisphere by creating a Free Trade Area of the Americas - the FTAA. How many Canadians have even heard of this initiative?
At the same time, the International Monetary Fund and the World Bank are literally restructuring countries - both developing and developed - according to their own narrow precepts. Their formula consists of devaluing currency, promoting the export market at the expense of the domestic, cutting governments, taxes and social programs, privatizing, and deregulating. Sound familiar?
Remember that lovely, anti-war song that asked the wistful question "Where have all the flowers gone?" Well, I would like to suggest a rewording of the song's lyrics to better suit our times. Forget the flowers, let's wonder instead "Where has all the money gone?"
That's right. The cash, the capital. There just doesn't seem to be much of it around as you all know - at least in the public realm. Streets have become grimier, more pot-holed; stores are boarded up; people look sadder and more pathetic.
What's going on? After all, the Canadian economy has "recovered." The deficit is no more, and experts tell us that the so-called "fundamentals" - low inflation, lower interest rates - are in place. At the same time, there is more wealth moving around the globe now than at any time in human history. At least four trillion dollars (US) worth of currencies, stocks, bonds, and commodity futures are traded daily on world markets. The pool of "hot money" available for these and other transactions has been estimated at more than US$13 trillion.
But where is all this wealth? Who has it and who is benefitting from it? Generally, it is being sucked upward into fewer and fewer pockets. To begin with, there are more billionaires. In 1995, there were 357 of these super-affluent human beings who were worth a total of $760 billion - equal to the combined wealth of about three billion other people. In 1996, the number of billionaires rose to 447, and last year it topped 500. Added to these are the many multimillionaires and millionaires - some of whom, of course, were affected by the East Asian crisis.
This financial concentration is a change from the past. Much more extreme. In 1960, the richest one-fifth of the world's population was about 30 times wealthier than the bottom one-fifth. Now, the top group is estimated to be about 150 times better off than the bottom. Distribution of the world's bounty isn't improving; it is getting a whole lot worse.
In Canada, the richest 50 Canadians have about $39 billion in assets - approximately the same as the bottom five million citizens who earn less than $10,000 a year. In the nineties, the top 20 per cent of Canadians' "share of the income pie" is several billions more than it was in the early seventies. That additional income was transferred in one way or another from those at the bottom.
The theory is that this increasingly concentrated wealth will "trickle down" to those below. But, as someone once observed: "Mink coats don't trickle down." In other words, the luxury items produced for and purchased by the super-rich minority aren't really enough to maintain the kind of healthy economy needed to create a decent life for the rest of us. What works better for a society is a lot of people with some wealth, rather than a few people with enormous wealth.
To make matters worse, much of the money accumulated by those at the top of the heap is taken out of the general economic system entirely - and hidden away in the growing number of offshore banking havens, such as Switzerland, the Bahamas, the Channel Islands, Luxembourg. Here, the loot avoids taxation - and, therefore, isn't moved back into society where it might do some good. The investment bank, Merrill Lynch, estimated not too long ago that the amount of private wealth stashed away in tax havens - sometimes referred to as "black money" - amounts to about $3.3 trillion (US).
But this is just part of the problem. The IMF has calculated that, if the assets of the giant corporations are included, the total amount of money hidden in the havens is about $5.5 trillion - a huge chunk of the world's total income. These are the latest numbers I have - perhaps you're more up to date. I know your office reported on the problem of income tax avoidance in May, 1996. I wrote an article on the subject based on your findings - but, as far as I can remember, there wasn't much coverage of the issue. I'll come back to that later in my talk.
There is a lot at stake right now. It certainly doesn't feel like the end of history. If I may be so bold, I would say that the future of the nation state and Canada are in danger. That means the future of democracy itself - because at this time in human history we haven't developed an alternative to the sovereign nation as a guardian for citizens' rights and freedoms. And for you, who play such a crucial role in monitoring and maintaining the efficiency and credibility of our democratic system, this is key. It's also important for you as Canadian citizens.
I'd like to examine the arguments of those who oppose the nation state - and by extension, although they won't say it outright, democracy. My favourite advocate of this view so far is Kenichi Ohmae, author of various books, including "The Borderless World" and "The End of the Nation State." He is billed as a "world-renowned business strategist" - you can take that for what it's worth. I would like to share some of his thoughts and arguments with you. First of all, he points out that present economic borders are "progressively disappearing" and the world is breaking up into "natural business units," because "traditional nation states have become unnatural, even impossible, business units in a global economy." They are, he claims, nothing more than artefacts of the 18th and 19th centuries. In other words, a defined entity that exists beyond the economic - the nation state - is being challenged. What is the alternative? Ohmae is pushing the idea of region states - and there are several unofficially in place already - of between 5 to 20 million people because, he claims, these regions must be "small enough for their citizens to share interests as consumers, but still of sufficient size to justify economies not of scale, but of service." One such service is advertising because, according to Ohmae, "it is modern marketing techniques that shape the economies of region states." What counts is "the geographical clustering of broad similarities in taste and preference" and "a reasonable level of brand recognition."
Ohmae is fully aware that we are witnessing what he calls the "Californiaization" of world tastes and preferences. He even refers to young people as "Nintendo Kids." But none of this appals him - as it does me - because he is concerned about efficiency and rationalization on a global scale. Cultural and even linguistic diversity are old-fashioned luxuries. In other words, to make the new system work, human beings must serve two purposes - to work and to consume. He is opposed to maintaining what he calls the "civil minimum", basically wasteful social programs. He describes a pretty bleak and sterile world in my opinion - but he's got very powerful allies in business and government.
It seems to me that the present government is facilitating Canada's transformation into something more akin to an economic zone or a series of economic zones than a vibrant nation state. The decentralization of federal powers in forestry, mining, environmental protection, social housing, job training, and tourism is certainly not conducive to a strong, well-co-ordinated country. Next, partly as an extension to transfer payment cuts, social policy will be devolved under the guise of "Social Policy Renewal". I call this the "going, going, gone" method of governing. Programs move from federal to provincial, provincial to municipal, and then ... they're gone. We are told that this is being done in large part to keep the country together - "renewed federalism" to appease Quebec - Plan A, but Bloc Quebecois leader Gilles Duceppe told me that separatists could use the absence of Ottawa in Quebeckers' lives as a weapon. Why pay taxes to the federal government, if the services are provincial? Why be part of the country at all?
Privatization is another weapon in the arsenal of those who would destroy the nation state. In Europe, there is a slogan that "Privatization is theft." Here, we have no real appreciation of our public heritage and rights. We let our only national rail line - CN - go with very little debate or controversy. And now, it is, I am told, majority American-owned. At the same time, our airports, air traffic control system - as you know, our ports, the St. Lawrence Seaway, and even some highways have moved or are moving from the public domain to the private. You have quite rightly exposed the loss of almost a billion dollars during the sale of the air traffic system and the formation of Nav Canada. Actually, I'd like to know if you were shocked by the weak reaction of the media to your revelations.
But, to my mind, the loss of money pales in comparison to the loss of something so crucial to this vast, sparsely-populated country - a national transportation system. Now, for example, the government seems helpless as western grain farmers face increased costs and decreased service. What we are witnessing is the opposite of nation-building.
I'd like to stop here for a moment in what some of you might consider a rather miserable litany and point out that, in this increasingly commercially-oriented world, some of us have to uphold different values. Especially, in a highly-impractical country like Canada. This nation simply wasn't designed to cater exclusively to the bottom-line - certainly not as much as the U.S. which has more people, shorter distances, and better weather. We developed a mixed economy because it worked best for this particular national project. Also, for that matter, is the profit-oriented path always the cheapest? Take, for example, the sale of CFB Goose Bay to Serco, a British multi-national corporation. Jobs and wages have been cut. Sounds good. Efficient. But the backbone of a community has been weakened at the same time. Aren't human stability and security worth something?
While I'm on the subject of privatization, I recently spoke with an economist who pointed out that the federal and most provincial governments write off the cost of buildings or capital equipment in the year of their purchase. They are then carried on the books as being worth one dollar. This not only distorts the budget balance with sudden enormous expenditures, but it appears to me that it also allows governments to overstate their debts by understating their assets. As we all know the debt and deficit have been handy weapons for those wanting to pare down our social programs and government in general. At the same time, when national assets such as Petro-Canada and CN are privatized, governments can claim they've reduced the deficit by hundreds of millions - even though they have actually sold this valuable public property for less that it's worth. I understand the Public Sector and Auditing Board (PSAAB) of the Canadian Institute of Chartered Accountants (CICA) has called for an end to this system - demanding that public physical investments be depreciated or amortized over time rather than written off in a single year. I'm not an accountant, but it sounds like a good idea. It would certainly give Canadians a more accurate picture of what they have, what they are losing, and by how much.
I want to repeat what I said about your function as financial watchdogs. This role cannot be underestimated. The tax dollars of Canadians - especially lower and middle-income Canadians who are being stretched to their financial limit - must be spent wisely and fairly. The tragedy is that we are going through huge changes in this country - and we haven't established real, big-picture priorities and values. Too many of the changes are being made for short-term gain which, as you all know, isn't always cost-effective over time. The laying off of thousands of dedicated public servants is an example. When I asked someone at Industry Canada how the cuts had affected his department he looked bleak and replied diplomatically: ""Let's just say a lot of knowledge has walked out that door." National assets. Now, some departments - even yours I understand - are hiring again. It's the same with our beleaguered social programs. Now there's money to spend on them again. Perhaps, someone here can explain why it was necessary to cut so brutally and quickly in the first place? The whole deficit-cutting exercise reminds me of someone who decides to trim his front lawn, so he mows down everything in sight, including the flower beds. Then he turns around and replants. Was all the destruction necessary?
This brings up the whole notion of "value" and "values." A recent Ottawa Citizen editorial questioned whether TVOntario provided value to Ontario taxpayers - by that, of course, they meant strictly "commercial value" or "money's worth." But shouldn't the term also embrace spiritual, historical, or just plain human considerations? I guess that depends on one's "values" or "moral principles." I know that your report last year on The Atlantic Groundfish Strategy - TAGS - was criticized by one union leader for reducing the values of society to assets and liabilities on a balance sheet. He appears to have misunderstood your point that the program was not doing what it was designed to do - make the fisheries more viable through restructuring. On the other hand, he was right that the money wasn't really misspent by assisting those in need. It's a question of defining goals and priorities. Should the government have been more concerned about putting food into people's mouths or improving resource management? Both are necessary, but what was possible or even ethical under the circumstances?
I am not suggesting that your office get into the murky business of weighing value systems. That is not your job. But I would like to suggest that you avoid narrowing your own criteria. I interviewed John Ralston Saul - one of Canada's leading thinkers - a couple of weeks ago and asked him what message he thought I should convey to you. His main concern was that your office avoid what is happening in many departments - making government act and sound like business. I'll share his words with you, because I think he makes an excellent point. Quote - "If because they are auditors and they anchor everything in commercial terms, they will have become the exponents of the opposite of the public good by accident. By adopting the language which is in effect the language of the private sector - referring to citizens as clients or stakeholders - then, in fact, they are not acting as auditors of the public good. They are acting as creative accountants of something false which is to pretend that the public good is a business like any other business." Unquote. I'll leave that thought with you.
Let's face it. These are interesting and, in many cases, precarious times. Just like the Speaker of the House recently, you are being tossed into the political ring whether you like it or not. Your recent tousle with the Minister of Finance has put you in an uncomfortable position I'm sure. And, having the Reform Party come to your aid at the same time as it was obnoxiously exploiting the Canadian flag, must have been more than disconcerting! The important thing to remember is that you, too, are unwitting participants in a quiet but powerful revolution and it is up to you to protect the fundamental honesty of your profession - as you've been trying to do. You cannot dilute or make a mockery of your profession by allowing it to become a tool for politicians, certain bureaucrats, and outside interests. Look what has happened to the scientists at the Ministry of Fisheries and Oceans and the scientists in the Health Protection Branch. We have - in some cases had - an apolitical public service for a reason. It is designed to serve the long-term needs of the country, not the short-term calculations of a powerful minority. That reason shouldn't be forgotten or overlooked, even though few Canadians really understand or appreciate it. And, because our democracy is faltering, you must see yourselves as educators of the voting public - both for your own survival and theirs.
I know that you have been accused in the past of overstepping your bounds by making political statements or offering value judgements that run counter to your mandate. I have read, for example, comments made by NDP MP Bill Blaikie on the report tabled by your office in October, 1995, in which you editorialized on the public debt and interest rates. Both touchy subjects then and now. I must admit I am inclined to agree with Blaikie that this is not part of your mandate for the simple reason that your strength, again, lies in your neutrality. You are like the International Red Cross in a war zone. Your non-partisan, non-combatant nature keeps you above the fray and gives you your credibility. You must deal with numbers and facts with such precision and honesty that your words and conclusions can't be questioned by those on the left, right, or centre. In a city filled with political intrigue, you are no one's pawn. Your role is to provide the purest kind of information possible to enlighten both citizens and their elected representatives. There are so few islands of integrity left in today's increasingly-divided world that you must maintain extra caution in guarding yours.
I'd like to offer a few more observations about your role if I may. When I talked to one journalist about your office, he handed me a slightly-dated article with the first line: "Who's watching the watchdog?" The article pointed out that the Office of the Auditor-General quote: "has never swallowed any of its own medicine - a value-for-money audit, where outsiders come in to see not only whether the books balance but also whether spending was efficient and effective." And, like Crown Corporations, you are not subject to Freedom of Information laws. Again, I must join your critics on this one. Call me an idealist, but I think all public institutions should be open and accountable - unless there are very solid reasons to prohibit this. That is what democracy is all about. In fact, this country is badly in need of some kind of grand gesture right now. Why not offer yourselves up for public scrutiny - volunteer to submit to audits and FOI laws? I realize there are valid reasons for limiting both in the case of the OAG, but they can be dealt with. Imagine the headlines if you declared that you wanted to be more transparent and accountable - those buzz words that are so often used and abused. You'd put the rest of this Ottawa crowd to shame and Canadians could rid themselves of at least one layer of the cynicism that has built up in recent years.
Another issue confronting the OAG is your relationship with parliamentarians. I know you have criticized them in the past for not doing their part to keep the system as trustworthy as possible by, for example, making sure that department performance reports are complete and thoroughly reviewed. I think it is good that you have spoken up. It seems to me that our system of responsible government isn't working for a number of reasons. For one thing, most parliamentarians are overwhelmed with information and responsibilities and are unable to do their jobs properly. I have talked to parliamentary committee witnesses and clerks who are appalled at the low level of knowledge and insight of some MPs studying this or that piece of legislation. One frustrated witness was told by an MP that perhaps his concerns over an important bill would be better understood and addressed in the Senate. It seems obvious that MPs simply can't keep up with the activities on the Hill. Conferences, debates in the House of Commons, committees, press releases, reports. It's impossible. When I talked to one Hill employee about the workload he quoted Martin Luther King who said: "Too much information - or not enough - leads to the paralysis of analysis." It doesn't have to be this way. What's the rush? I think we should all take a deep breath, slow down, and do democracy better.
Overwork and time constraints aren't always the problem. In the case of your expose of the Bronfman family trust leaving the country untaxed, there was something more sinister at play. I watched as Liberal heavyweights in the Public Accounts Committee did their best to move the trust issue to the Finance Committee for study. I then watched as the Finance Committee lined up several tax experts to counter your report. The only support you got - as I'm sure you know - came from Neil Brooks of Osgoode Hall Law School who knew that the fix was in. He even joked about being outnumbered in the same way during the GST hearings. In fact, the government manipulation and the political games of the parliamentary committees are such that everyone is amazed that George Baker and the Fisheries Committee have actually accomplished something substantial. They did this in spite of the government's disapproval and its attempts to sabotage their efforts. The neutering of these committees is a travesty, which makes your job more difficult I'm sure.
Speaking of difficulties, I would like to turn to the media.
Like parliamentarians - and bureaucrats - journalists are in many cases rushed off their feet by the passing parade of daily events and issues and can't do most "stories" justice. On the other hand, as in any profession, there are also those who are too stupid, cynical, lazy, frightened, or sold-out to do their jobs properly under any circumstances. You must learn to adapt to all these possibilities. As you can tell by my words so far, I am not an objective journalist - I don't pretend to be. What frightens me is that there is an increasing number of so-called objective journalists or reporters who distort what they write - either for their own reasons or because they want to keep their jobs. One prominent journalist on the Hill once told me he stopped writing certain kinds of "leads" for his stories because he knew they wouldn't survive the editing process. In an ideal world, journalists, like auditors, could apply their skills as honestly as possible, but we all know there are immense pressures to do otherwise.
Given these factors, what can your office do to get your findings and conclusions across to the decision-makers and the public? Your work is generally respected and considered effective and well-presented. The press releases and summaries are definitely appreciated. Even the most diligent journalist likes being spoon-fed. The value-for-money thrust of your investigations is seen to be more worthwhile than the "ritualistic" exposes of government waste. In fact, your role is considered vital enough that one journalist suggested you should play a part in policy-making from the beginning. For example, perhaps you could have examined the controversial income tax changes which might affect Paul Martin's company, the Canada Steamship Lines. After all, the OAG is more respected than the Ethics Commissioner. Why should a thorough audit wait until after the legislation is in place and the damage is done?
Generally, you are going to have to be more aggressive - and make the respected Johanne McDuff work even harder. Sorry, Johanne. One journalist pointed out that the "beat" system in some media outlets means that certain areas are covered well, but others fall through the cracks. It is important to know who covers what in order to match stories with reporters and, if necessary, work to find a home for certain issues. Make connections for the journalists. Direct them. Suggest related stories. As I said, spoon-feed them.
The other bad news is that bureaus generally are shrinking - cutbacks, of course. The once-great Canadian Press - which is another under-appreciated national institution - has been brought to its knees by the likes of Conrad Black and there just isn't the person-power there once was. For that reason, it is difficult for writers to follow-up on stories they might consider important. Again, you could help them to do that by supplying them with timely information and tips. Keep them informed by phones calls etc. about changes that might have occurred since your reports. The issues you raise should not be one-day wonders. You have to keep supplying the media with information, so they can appreciate that.
More bad news. You've also got to realize that complex and important stories aren't an "easy sell" - at most media outlets. Editors simply aren't interested, and content is getting lighter as competition for larger markets pushes everything down to the lowest common denominator. Again, you simply must push harder. Talk to the editors or even their publishers. Most of them need enlightening, believe me. Give them a quick course in "Auditor-General 101."
But you are up against real challenges. I talked to one journalist who has returned to the Hill after almost 20 years. He's surprised how little fear politicians have of your reports these days. He said that in the good old days people were "scandalized" by OAG findings and stories would go on for days with new angles and so on. Again, there isn't the time, motivation, or person-power in most cases for this to happen now. As I mentioned earlier, I have noticed that certain issues raised by your reports haven't received the attention they deserve. The sale of Canada's air traffic control system, corporate tax avoidance, the EI surplus - none of these has had the coverage that the flamboyant lifestyle of a certain Labour Relations Board chairman had. My theory is that the media would rather concentrate on individual scandals than institutional scandals - because they are easier and safer. It's less dangerous to call into question the ethics of one person than the whole political and economic system.
Before I wrap up, I would like to suggest - too briefly - four crucial areas of government policy that I think need further investigation as Canada carves out a new and, to my mind, questionable path for itself. First, I have seen very little analysis of where government money is being directed now. Independent departments, such as Consumer and Corporate Affairs, no longer exist and others, such as Environment and Natural Resources, have been severely weakened. But what about the new money spent on Team Canada, NAFTA, the FTAA, the MAI, APEC, and, of course, the WTO? I realize that some of the costs of these trade initiatives are covered by the private sector - my press pass for the APEC conference in Vancouver last year was sponsored by Canadian Pacific, so much for objectivity! - but what is the cost to taxpayers? How many jobs are being created? If we are going to make a major shift to a free-market economy, we should be more effectively monitoring the effects of that shift.
Second, changes to the Bank Act in 1991 brought an end to the fractional reserve system. That system meant that banks could only create a certain amount of money - based on the amount of legal tender they held in reserve at the Bank of Canada. It was one way of controlling inflation. Now, there are no reserve requirements and interest rates are the main anti-inflation tool. The new system has saved the banks money, but how much has it cost Canada in higher interest payments?
In the same vein, the Bank of Canada once held about 20 per cent of the country's national debt. It now holds about five per cent. This means that interest payments which once flowed to the central bank - in other words the government - now go to private financial institutions. What has the handing over of government debt to the private sector cost the country?
Finally, what about foreign investment which is being touted as the salvation of the nation? Last year, 97 per cent of foreign direct investment went to mergers and acquisitions. That usually means job cuts. Is this dependence on FDI good or bad for Canada? All I've heard so far is government rhetoric. But what are the numbers?
As you can probably tell, I find your role in the functioning of this country both fascinating and crucial. Money is at the root of more than evil, and it's extremely important that we know where it comes from and where it goes. I hope that my comments have helped put some of the many issues you courageously tackle every year into perspective. I know I will never read an OAG report the same way again.