Scathing auditor general reports underscore political realities

If you needed more proof that the Trudeau government is misusing taxpayer money, the auditor general (AG) just released two scathing reports about improper contracting practises, conflict of interest, and funding provided for ineligible projects. Clearly, politicians and bureaucrats in Ottawa do not always act in the best interest of Canadians.

According to the first AG report, Sustainable Development Technology Canada (SDTC), the federal agency responsible for funding green technology projects, demonstrated “significant lapses… in governance and stewardship of public funds.” Nearly 20 per cent of the SDTC projects examined by the AG were in fact ineligible (based on the government’s own rules) for funding, with a total price tag of $59 million. There were also 90 instances where the SDTC ignored conflict of interest provisions while awarding $76 million to various projects. Indeed, the AG found 63 cases where SDTC agency directors voted in favour of payments to companies in which they had declared interests.

The second AG report focused on 97 contracts totalling $209 million awarded by the federal government to the McKinsey & Company consulting firm from 2011 to 2023. According to the AG, the government demonstrated “frequent disregard for procurement policies and guidance and that contracting practices often did not demonstrate value for money.” About 70 per cent of these contracts were awarded non-competitively—meaning no other companies were permitted to bid on the contracts.

These findings also follow an earlier report in February that found the federal government “repeatedly failed to follow good management practices in the contracting, development, and implementation” of the ArriveCAN mobile app, which cost Canadian taxpayers at least $59.5 million.

While the Trudeau government’s record-high levels of spending have made it clear that taxpayer money is being dished out left and right without much regard for the consequences for future generations of Canadians, the AG reports reveal chronic mismanagement, little accountability, and decision-makers acting in their own interests.

Government officials are handing huge sums of taxpayer money to people or companies who spend it without proper transparency or oversight. When considering these findings, Canadians should be skeptical of any politician or commentator who downplays government excesses or says we can’t reduce federal spending.

It’s also naïve to think that politicians and bureaucrats are benevolent civil servants who simply want to make the world a better place. In reality, like most people, they’re human beings motivated by self-interest.

James Buchanan, who won the Nobel Prize in economics in 1986, explained these concepts when pioneering a branch of economics called Public Choice Theory, which pays particular attention to the incentives policymakers face.

Politicians do not always act in the best interest of their constituents, and bureaucrats do not always act in the best interests of the public.

Why? Because it’s often in their interest to make decisions that benefit themselves, family members, friends or other cronies. If you decide to give money to companies despite a conflict of interest or if you award contracts to friends, you’re not making decisions in the best interest of society. People don’t suddenly become selfless when they enter the government sector. They respond to the same incentives as everyone else. The latest AG reports underscore this reality.