Canada: Minister Bernier Announces New Technology Partnerships Canada Transparency and Accountability Standards to Protect Taxpayer Interest

Last Updated: August 24 2006

Originally published August 11, 2006

OTTAWA, August 11, 2006 — The Honourable Maxime Bernier, Minister of Industry, today announced increased transparency and accountability requirements for all future projects to be funded under Technology Partnerships Canada (TPC). Aimed at better ensuring company compliance with the terms of their TPC contribution agreements, these new contractual requirements will help protect the interests of Canadian taxpayers by providing the government more leverage to act on behalf of the public should any breaches of these improved contribution agreements occur.

The government has taken action to amend the contribution agreement for future TPC projects to ensure that the priorities of accountability and transparency were brought to TPC as the government continues with the consultation process on the future of the program. The new government has committed to honour obligations and any legal commitments regarding submissions received under the program. However, the government will only honour these obligations and legal commitments using an improved contribution agreement that will better protect the taxpayer's interest.

"Investments made by TPC are investments made on behalf of the Canadian public," said Minister Bernier. "The improvements we have made to the contribution agreement will ensure that Canadians will be aware of any breaches of the agreements that companies have entered into, and that companies that behave inappropriately will be held publicly accountable for their actions."

Previously, companies found in breach were protected from public scrutiny. The action of the new government will help ensure that the contractual obligations made to the taxpayer by new contribution recipients are treated with the seriousness they demand.

In a departure from previous practice, if a company defaults on its obligations under the improved contribution agreement, its name will be published on Industry Canada's website. The improvements to the agreement also allow the Minister of Industry the right to disclose specific information on any remedies exercised by him against any company that is found in breach of the conditions of this amended contribution agreement.

Most importantly, and for the first time in the history of TPC, the improved contribution agreement will allow the Minister to publish the amount of each repayment made by recipient companies that have received investments under the improved agreement.

As well, an improvement to the contribution agreement will hold recipient companies more accountable for lobbying activities that they may undertake. The contribution agreement now requires a company to continually affirm its ongoing compliance with the terms of its agreement, including those terms relating to lobbyists, when submitting claims for payment. This applies to consultants contracted to lobby on behalf of recipient companies, as well as company representatives who undertake lobbying activity directly. Previously, companies were not required to reaffirm their compliance as frequently and as explicitly.

"We have always agreed with the criticism of TPC's lack of transparency with respect to repayments made on the taxpayer's investment," said Minister Bernier. "With these key changes to future TPC contribution agreements, our new government has ensured that Canadians will be aware of the current status of their investments and the progress that is being made on individual projects. We have made long-overdue changes to make TPC contribution agreements more open and transparent."

In announcing the improvements to the TPC contribution agreement, the Minister reiterated his intention to discuss with his Cabinet colleagues the most appropriate role and mechanisms for the federal government to effectively support commercialization of Canadian technology.


New Technology Partnerships Canada Transparency Standards

In order to better ensure company compliance with the terms of their Technology Partnerships Canada (TPC) contribution agreements, the Government of Canada has made some important improvements to the contractual documents that accompany a TPC investment. The contribution agreement is a legally binding document between the Minister of Industry and the recipient company. All future recipient companies will be required to sign this improved contribution agreement and comply with the increased transparency standards it demands.

Specific improvements to the contribution agreement aimed at increased transparency and accountability are as follows.

The addition of Paragraph 8.2(d) of the TPC General Conditions will, for the first time, allow the government the explicit right to publish via the Internet the name of any company found in breach of its TPC agreement. This improvement also allows the government to publish the remedies reached with companies in order to rectify a breach of the TPC agreement. By publishing the fact that a company has been found in breach of its TPC agreement, the government will ensure that companies that behave inappropriately will be held publicly ac countable for their actions.

Two important improvements have been made to Section 10 regarding announcements. First, Subsection 10.1 now allows the Minister the right to publicly announce any company breach of the TPC agreement related to unregistered lobbyist activity, and/or the payment of illegal contingency fees, as well as any details related to remedies exercised by the Minister.

Secondly, Subsection 10.4 now allows the Minister the right to publicly announce the amount of repayment made by companies on their inv estments. This significant improvement to the TPC agreement follows on to Minister Bernier's unprecedented release of a report on repayments made under the TPC program, on March 24, 2006. TPC has been criticized for a lack of transparency with respect to repayments made by companies. With this improvement to the TPC agreement, the government will be able to publish the amount of each repayment made by individual recipient companies that have signed the improved agreement.

As well, an improvement to Subsection 6.12 now requires a company to continually affirm its ongoing compliance with the terms of its agreement, including those terms relating to lobbyists, when submitting claims for payment. Previously, companies were not r equired to reaffirm their compliance as frequently and as explicitly.

The improvements made to the TPC agreement by the new government will help ensure that the contractual obligations made to the taxpayer are treated with the seriousness they demand. Measures proposed by the government's new Federal Accountability Act would further improve accountability and transparency in government activity, including doubling criminal monetary penalties for lobbyists who behave inappropriately.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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