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Montreal building costs rose in wake of September 11

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A former Quebec bureaucrat says signs of collusion in government infrastructure contracts became apparent to him after a bid to kick-start the province's economy in the wake of the Sept. 11, 2001, terrorist attacks.

Gilles Roussy told Quebec's corruption inquiry on Tuesday it was early in 2002 when he started to notice an explosion in the cost of provincial contracts.

Mr. Roussy said the provincial government was committed to investing in infrastructure projects to help a stagnant economy and bumped the Transport Department's budget to $1.39-billion from $820-million.

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He testified that before September, 2001, the difference between the department's estimates and the contractors' submissions was negligible.

But by the spring of 2002, company bids were coming in significantly higher – 25, 30 and sometimes 35 per cent higher than department estimates.

Mr. Roussy said that played havoc with the department's own cost estimates, which were established using historical bid data.

The former bureaucrat said he tried to fight the trend but the department didn't have the necessary tools or funding to investigate collusion.

Mr. Roussy said the budget for investigations – including salaries – amounted to $500,000. As a result, many files were transferred to the Competition Bureau of Canada, but Mr. Roussy said the results were not what he expected.

"We had cases where the accused were sentenced to relatively low fines, well below the amounts from which they'd benefited," Mr. Roussy said. "The department had to take action in civil court to recover the amounts."

On Monday, witness François Beaudry, a whistle-blower colleague of Mr. Roussy, said he'd been told by an informant about a widespread system of collusion in 2002. The tip was passed along to various levels of the civil service and even to politicians in the Transport Department, without any results.

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Mr. Roussy confirmed what other former government employees have also said – that little was done at any level to change the status quo.

Mr. Beaudry testified that even provincial police were made aware, but Mr. Roussy said he warned his colleague to not put too much stock in authorities.

"I told [Mr. Beaudry] 'don't count too much on it, it won't work,' " Mr. Roussy said.

That case was also ultimately transferred to the Competition Bureau.

Mr. Roussy later went to the media himself when he wasn't satisfied with the police response.

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