Transport Canada 'fictitiously' expensing millions

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Federal public servants at Transport Canada are routinely filing millions of dollars in expenses - including overtime, salaries and computers - toward a construction project that doesn't exist.

Further, The Globe and Mail has learned that public servants who object to the scheme are routinely overruled by their managers.

The Mackenzie Valley pipeline remains a mega-project that is perpetually on the horizon - yet it lacks the financial backing and environmental approvals to green-light construction.

The project seemed closer at hand when a fund was set up at Transport Canada six years ago so that the department could oversee the expected increase in air traffic and other transportation needs.

Though the pipeline remains in limbo, the department has kept the fund alive year after year, using it to cover millions in expenses that have nothing to do with the pipeline.

Documents released through access-to-information requests list the expenses, which total $10.7-million since 2004. Expenses continued to be billed to the pipeline project this year.

What's more, government documents show Transport Canada managers insisted employees bill all expenses to the fund for any travel that is loosely in the area of the proposed pipeline - listing 23 communities in the Northwest Territories as "Mackenzie Valley locations." When employees noted their trips to the region had nothing to do with the pipeline, they were told that Transport Canada headquarters approved the use of the fund based on geography.

"To fictitiously spend money on a project that's not going anywhere, I don't think is appropriate," said captain Daniel Slunder, who has spent most of his career working at Transport Canada's Ottawa headquarters. Earlier this year, Mr. Slunder took a leave from the department to head the union representing Transport Canada flight inspectors. Only then did he learn from members about the pipeline fund.

Mr. Slunder is chairman of the Canadian Federal Pilots Association, which represents Transport Canada pilots across the country who are responsible for inspecting aviation activities, from national airlines to small companies that operate bush planes.

"They don't want to do this any more and they're very frustrated when they see things being billed that they had no intentions of seeing billed," he said. "Canadians want their money spent a certain way. The government will set its priorities according to where they want us to spend the money. And if we don't expend the money in a particular project, or the project doesn't happen, there's an expectation that the money comes back to the government to fund other projects."

The Mackenzie gas pipeline is a project that has been debated for decades and recent estimates peg the cost at $16-billion.

Environment Minister Jim Prentice has said a deal is within reach this year, but the chairman of the Aboriginal Pipeline Group, the native-owned corporation that is partnering with oil companies in the project, recently said hope of a deal is slipping away.

A joint review panel examining the potential environmental impact of the project has taken years longer than originally expected.

In response to questions from The Globe, Transport Canada spokesman Patrick Charette said Transport Minister John Baird is launching an investigation into the matter.

"We are fully committed to the principles of transparency and accountability. As such, we are taking this issue very seriously," Mr. Charette said. "The minister has instructed his officials to investigate fully and take all necessary and appropriate action."

The list of expenses billed to the pipeline, as well as reports that mention the challenge managers were having in justifying the expenses, were obtained through access-to-information requests by researcher Ken Rubin.

The documents appear to support the union's allegations that only a small fraction of the expenses are legitimately related to the pipeline.

In one 2007 Transport Canada report on the pipeline fund, an unidentified official notes "it continues to be difficult to directly ascribe activities to the MGP [Mackenzie Gas Pipeline]project. General divisional activities remain high, which may, in some small part be related to MGP preparations," the note states.

Transport Canada employees are going public with their concerns through their union even though shutting down the fund puts at risk the budget that helps fund their routine inspection duties.

Other internal documents suggest the push to bill expenses to the non-existent pipeline was driven in part by concern there was not enough money in other budgets to fund regular aviation inspection duties.

A recent survey of public service employees revealed Transport Canada officials working in the civil aviation field gave their managers poor marks. On a scale of zero to 100, employees in that field gave a score of 39 when asked whether "senior management makes effective and timely decisions."

That compares to a score of 52 among all Transport Canada employees. Aviation employees gave a 41 score to the statement "I have confidence in senior management," compared with a 59 score for the entire department.