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Audit finds flimsy accounting for travel, booze at Canadian UN mission

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Canada’s diplomatic office at a UN agency in Montreal has been badly managed for years — and even managed to lose track of its alcohol and silverware.

« [T]he current method used to track alcohol consumed during hospitality events was not sufficiently reliable, » says a newly released audit of the Canadian mission to the International Civil Aviation Organization (ICAO).

« The audit team also identified discrepancies in the crystal, chinaware dishes and cutlery inventories after performing a physical count. »

Transport Minister Marc Garneau was warned in March 2017 of problems at Canada’s mission to ICAO in Montreal. (Rafferty Baker/CBC)

The report says that most of the overtime and travel claims it sampled were not pre-approved, there was no proof that goods and services paid for were actually received, five hospitality claims disappeared entirely, silverware was never counted — and at least $6,000 in travel and hospitality spending wasn’t tracked at all.

« [I]t is difficult for the audit to determine why certain travel took place, » says the highly critical document.

The audit focused on operations between April 2014 and March 2017, a three-year period that followed intense lobbying in 2013 by the Conservative government of Stephen Harper to keep the ICAO in Montreal.

The UN agency, which sets global standards for aviation safety and security, came into being in 1947 and has been located in Montreal ever since. According to one estimate, the agency’s 191 member countries are bringing some $120 million in economic benefits to the city each year.

Rival bid

A rival bid by Qatar in 2013 to host the agency in Doha beginning in 2016 was dropped in the face of intense lobbying by then-Foreign Affairs minister John Baird and others. That lobbying ensured the ICAO will stay put until at least 2036.

Canada’s small mission in Montreal, with eight permanent staff and three temporary positions, devotes about half its resources to host-state duties, including securing visas and even parking for ICAO member countries.

The Liberal government was alerted to problems at the Canadian mission sometime before March 2017, when a briefing note to Transport Minister Marc Garneau warned of major « shortcomings » and the need for a full audit. CBC News obtained the note under the Access to Information Act.

The auditors ended up delivering a scathing June 2018 report, citing « haphazard » communications, « confusion » about work responsibilities, « ad hoc » procedures, « insufficient training, » a « lack of documented procedures » and missing paperwork.

The mission’s annual budget – averaging $806,000 during the audit period, and $856,488 in 2017-18 – reserves about 10 per cent for hospitality and travel.

The funding was accounted for; however, the reporting was lacking.– Transport Canada spokesperson responding to an audit of the Canadian mission to ICAO in Montreal

Among other things, the report found the mission’s accounting for those funds was flawed, citing « weaknesses in the Mission’s management controls and oversight in the areas of budget planning and monitoring, expenditure approvals, inventory management and information management. »

A spokesperson for Transport Canada, which is primarily responsible for the operation of the ICAO mission, played down the findings, saying that « the funding was accounted for; however, the reporting was lacking. »

« There was no evidence of any items that went missing, including alcohol, » Sau Sau Liu added in an email.

Performance reviews

The audit does not refer to individuals at the mission. Asked whether any staff members have been reprimanded or terminated, Liu said only that the « lack of management oversight has been addressed through the completion of regular performance reviews required within the public service. »

On April 3, 2017, the Liberal government appointed career diplomat Martial Page as the new head of the ICAO mission to help sort out the mess.

Montreal Mayor Michael Applebaum, left, Foreign Affairs Minister John Baird, centre, and Jean-François Lisée, Quebec’s international relations minister, leave a ‘Team Montreal’ meeting at ICAO’s Montreal headquarters May 3, 2013. (Graham Hughes/Canadian Press)

Transport Canada declined CBC’s request to interview Page, whose three-year appointment ends in 2020. But the department says the mission has since strengthened management control, implemented new strategic and operations plans and created an inventory system.

« Transport Canada and Global Affairs Canada will continue to monitor progress in the implementation of measures identified and will work with the Mission to ensure that taxpayers’ money is being used effectively, » said Liu.

The audit was conducted jointly with Global Affairs Canada, which provides support and advice to the mission.

Follow @DeanBeeby on Twitter

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‘Business as usual’ for Dorel Industries after terminating go-private deal

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MONTREAL — Dorel Industries Inc. says it will continue to pursue its business strategy going forward after terminating an agreement to go private after discussions with shareholders.

« Moving ahead. Business as usual, » a spokesman for the company said in an email on Monday.

A group led by Cerberus Capital Management had previously agreed to buy outstanding shares of Dorel for $16 apiece, except for shares owned by the family that controls the company’s multiple-voting shares.

But Dorel chief executive Martin Schwartz said the Montreal-based maker of car seats, strollers, bicycles and home furniture pulled the plug on a deal on the eve of Tuesday’s special meeting after reviewing votes from shareholders.

“Independent shareholders have clearly expressed their confidence in Dorel’s future and the greater potential for Dorel as a public entity, » he said in a news release.

Dorel’s board of directors, with Martin Schwartz, Alan Schwartz, Jeffrey Schwartz and Jeff Segel recused, unanimously approved the deal’s termination upon the recommendation of a special committee.

The transaction required approval by two-thirds of the votes cast, and more than 50 per cent of the votes cast by non-family shareholders.

Schwartz said enhancing shareholder value remains a top priority while it stays focused on growing its brands, which include Schwinn and Mongoose bikes, Safety 1st-brand car seats and DHP Furniture.

Dorel said the move to end the go-private deal was mutual, despite the funds’ increased purchase price offer earlier this year.

It said there is no break fee applicable in this case.

Montreal-based investment firm Letko, Brosseau & Associates Inc. and San Diego’s Brandes Investment Partners LP, which together control more than 19 per cent of Dorel’s outstanding class B subordinate shares voiced their opposition to the amended offer, which was increased from the initial Nov. 2 offer of $14.50 per share.

« We believe that several minority shareholders shared our opinion, » said Letko vice-president Stephane Lebrun, during a phone interview.

« We are confident of the long-term potential of the company and we have confidence in the managers in place.”

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Pandemic funds helping Montreal businesses build for a better tomorrow

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Many entrepreneurs have had to tap into government loans during the pandemic, at first just to survive, but now some are using the money to better prepare their businesses for the post-COVID future.

One of those businesses is Del Friscos, a popular family restaurant in Dollard-des-Ormeaux that, like many Montreal-area restaurants, has had to adapt from a sit-down establishment to one that takes orders online for takeout or delivery.

“It was hard going from totally in-house seating,” said Del Friscos co-owner Terry Konstas. “We didn’t have an in-house delivery system, which we quickly added. There were so many of our employees that were laid off that wanted to work so we adapted to a delivery system and added platforms like Uber and DoorDash.”

Helping them through the transition were emergency grants and low-interest loans from the federal and provincial governments, some of which are directly administered by PME MTL, a non-profit business-development organization established to assist the island’s small and medium-sized businesses.

Konstas said he had never even heard of PME MTL until a customer told him about them and when he got in touch, he discovered there were many government programs available to help his business get through the downturn and build for the future. “They’ve been very helpful right from day one,” said Konstas.

“We used some of the funds to catch up on our suppliers and our rents, the part that wasn’t covered from the federal side, and we used some of it for our new virtual concepts,” he said, referring to a virtual kitchen model which the restaurant has since adopted.

The virtual kitchen lets them create completely different menu items from the casual American Italian dishes that Del Friscos is known for and market them under different restaurant brand names. Under the Prasinó Soup & Salad banner, they sell healthy Greek options and their Stallone’s Sub Shop brand offers hearty sandwiches, yet the food from both is created in the same Del Friscos kitchen.

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Downtown Montreal office, retail vacancies continue to rise

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Some of downtown Montreal’s key economic indicators are heading in the wrong direction.

Office and retail vacancies in the city’s central core continued to climb in the fourth quarter of 2020, according to a quarterly report released Thursday by the Urban Development Institute of Quebec and the Montréal Centre-Ville merchants association. The report, whose first edition was published in October, aims to paint a socio-economic picture of the downtown area.

The survey also found office space available for sublet had increased during the fourth quarter, which may foreshadow even more vacancies when leases expire. On the residential front, condo sales fell as new listings soared — a sign that the downtown area may be losing some of its appeal to homeowners.

“It’s impossible not to be preoccupied by the rapid increase in office vacancies,” Jean-Marc Fournier, the former Quebec politician who now heads the UDI, said Thursday in an interview.

Still, with COVID-19 vaccinations set to accelerate in the coming months, “the economic picture is bound to improve,” he said. “People will start returning downtown. It’s much too early to say the office market is going to disappear.”

Public health measures implemented since the start of the pandemic almost a year ago — such as caps on office capacity — have deprived downtown Montreal of more than 500,000 workers and students. A mere 4,163 university and CEGEP students attended in-person classes in the second quarter, the most recent period for which figures are available. Border closures and travel restrictions have also brought tourism to a standstill, hurting hotels and thousands of local businesses.

Seventy per cent of downtown workers carried out their professional activities at home more than three days a week during the fourth quarter, the report said, citing an online survey of 1,000 Montreal-area residents conducted last month.

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