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Shadowy group sought $10 million from feds by Claude Arpin, Montreal Gazette November 20, 1997 A secret anti-separatist offensive launched before the 1995 referendum was so vast its planners asked Ottawa for $10 million to finance it, according to a confidential report obtained from Quebec's chief electoral officer. The findings by François Casgrain's investigators show that, instead of the $10 million sought by Montreal-based Option Canada, the federal government authorized a grant of $4.8 million to be paid from Heritage Canada funds earmarked for the promotion of Canada's official languages. The report also states that Option Canada may have been a "bogus firm," set up by its parent organization, the Council for Canadian Unity, to avoid problems with Revenue Quebec and Revenue Canada. Casgrain's report was obtained through an access-to-information request filed by Radio-Canada reporters. The Gazette received a copy yesterday. In the report, Gaétan Boivin, one of Casgrain's investigators, writes that Option Canada may have been created "to help the CCU extricate itself from a potential conflict-of-interest situation." According to the report, the CCU, a Montreal-based think-tank, could not retain its tax-exempt status if it engaged in active politics during the referendum campaign. As an organization that is officially nonpartisan, the 33-year-old CCU can issue tax receipts to private and corporate donors. But based on information obtained during the investigation, Boivin wrote on June 17, the CCU was headed for trouble with federal and provincial rules governing tax-exempt agencies. "One cannot help but wonder," he wrote, "whether Option Canada was ever in fact operational, instead of merely a bogus firm (`une compagnie bidon') whose sole purpose was to assume (referendum) expenses already incurred by the Council for Canadian Unity, thereby providing the accounting loophole that would calm Revenue Quebec and Revenue Canada." Radio-Canada's access-to-information request was filed in the wake of last month's announcement by Casgrain that he was shutting down a six-month probe into Option Canada, a shadowy lobby group incorporated eight weeks before the Oct. 30 referendum. Charging that "light will likely never be shed" on where Option Canada spent its grant, Casgrain said Oct. 16 that his decision to abandon the investigation was motivated by a Supreme Court of Canada ruling that struck down parts of Quebec's referendum law. The Oct. 9 ruling quashed a section in the law that limits the ability of third parties to get their messages out by restricting spending. Apart from abandoning the Option Canada investigation, Casgrain dropped 20 charges against two individuals and 11 corporations involved in the big unity rally that drew about 100,000 to Place du Canada on Oct. 27, 1995. But prior to closing the Option Canada file, Casgrain had been handed a progress report by Boivin and other investigators, which states that the probe was triggered by a Gazette story published March 20. The article showed how the $4.8-million grant had been listed on Page 8 of an 82-page Public Works of Canada document known as "Transfer Payments," a section of the Public Accounts of Canada. The subsidy appeared under the heading: "Grants to organizations representing official-language minority communities, non-federal public administrations and other organizations for the purpose of furthering the use, acquisition and promotion of the official languages." Court documents show that Option Canada was incorporated on Sept. 7, 1995, by executives of the Council for Canadian Unity, a staunchly federalist agency that draws half its $10.5-million annual budget from Heritage Canada. The balance comes from private and corporate donors. When asked this year about the $4.8-million subsidy by a Gazette reporter, Option Canada's operations manager, René Lemaire, said the money was used to "extol the merits of federalism." Option Canada president Claude Dauphin said at the time that he'd "lent" his name to the organization but had no idea what it did during the referendum. Among the documents supplied to Radio-Canada is a hand-written statement to investigators by Dauphin mentioning for the first time that Option Canada's original request was for $10 million. Dauphin states that the money was to be spent in the days leading up to the official start of the campaign, Oct. 1, 1995. By law, all spending after that date had to be authorized and accounted for under the Yes or No umbrella committees. Both sides were authorized to spend $1 per voter or a total of $5,086,980 during the 30-day campaign. Half the amount was supplied by the provincial government. Dauphin, Lemaire and CCU officials would not comment yesterday on Casgrain's report. Heritage Minister Sheila Copps, who was not available yesterday, is expected to be asked about his findings tonight during a visit to Montreal to attend the launch of the Salon du Livre at Place Bonaventure. No-side expense accounts made no mention of Option Canada's presence in the campaign, so Casgrain's office launched its investigation April 1 to determine whether the $4.8 million was illegally funneled to the No side. Pressed last March to explain her department's role in the affair, Copps told the Commons she knew where the money went but wouldn't discuss the matter. Speaking to reporters outside the House, she blurted angrily: "If I am accused of spending money to save my country, then I plead guilty."

 

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From the Montreal Gazette The heritage minister said she "personally" had no knowledge of how the money was spent even though it was made under her department's program to promote Canada's official languages. "My job is to find out if it was spent in consistency with government Treasury Board guidelines and that was done," she said. "I wasn't in a position to examine the details of the spending." The money went to Option Canada and the sum, Copps stressed, matched the funds the Quebec government gave to the Conseil de la Souveraineté du Québec. "Option Separation" she dubbed this organization, run by prominent sovereignist Yves Duhaime, that was devoted to promoting a Yes victory. Option Canada originally sought $10 million, according to a confidential report obtained this week from Quebec chief electoral officer François Casgrain. Its eventual grant was just a fraction of what the Parti Québécois government channeled into trying to win the Oct. 30 referendum, Copps charged. "The separatist government of Quebec spent about $20 million to $30 million on renting halls, on putting mailings out they spent $5 million on a mailing to senior citizens. They spent approximately $15 million on commissions. They rented halls to announce concerts to pursue their option. They spent over $100 million of the taxpayers' money to pursue a separatist agenda," she told reporters. "I never apologized for fighting for my country and I never will," she told the House of Commons as Bloc Québécois MPs sought details of the grant to Option Canada. The Bloc's renewed interest was prompted by the report from Casgrain's office saying Option Canada may have been a hollow front organization for the Council of Canadian Unity. Obtained under access-to-information rules, the report suggests the council, a Montreal-based federalist think-tank of long standing, might have lost its tax-exempt status if it took the federal funds outright to engage in political activity. Casgrain last month abandoned an investigation into the Option Canada grant after the Supreme Court ruled the province's Referendum Act regulating spending during a campaign was unconstitutional. He said the "light will likely never be shed" on how Option Canada spent the money even though Copps last March 20 promised: "Of course, of course, I will co-operate with the Election Commission in any kind of investigation." Bloc leader Gilles Duceppe accused Copps of "playing with the truth" in refusing to give a detailed account of how the $4.8 million was dispensed. Bloc MP Suzanne Tremblay (Rimouski-Mitis) added: "What twisted logic was used to divert funding that was supposed to promote official languages to fund a bogus organization that was in charge of distributing federal propaganda in the referendum campaign?" But Copps was unapologetic, telling reporters they should investigate separatist spending around the referendum. Duceppe contended: "The question is what did the federal government do with that $4.8 million we just want to know that." Bloc MPs were also curtly rebuffed in the Commons when they asked the government to disassociate itself from the partitionist movement. Bloc MP Pierre Brien (Témiscamingue) attacked Intergovernmental Affairs Minister Stéphane Dion for his letter this week to Jacques Brassard, his Quebec counterpart. Dion said it was contradictory for Brassard and his colleagues to claim Quebec is not divisible while Canada is. Brien said Dion was tying himself to the "totally irresponsible, dangerous" partitionist movement in Quebec. To Liberal cheers, Prime Minister Jean Chrétien replied: "The people of Quebec twice voted to remain in Canada. Secondly, each time the minister writes a letter, the Parti Québécois and the government of Quebec and the Bloc Québécois are unable to respond in writing, so they try to just insult him."