Federal financial agency ignores dollar limit on hospitality spending

OTTAWA – A federal agency that ensures banks and other financial institutions follow the rules has itself broken the rules on hospitality spending.

The Financial Consumer Agency of Canada spent well in excess of the maximum allowed for a gala dinner in Toronto last November.

The agency bought a table for 10 people during credit education week, paying $155 a person —above the $108.42 maximum set by the Harper government.

The total bill for the hospitality event was just $1,550, but the rule-breaking triggered a memo and briefing note to Finance Minister Jim Flaherty to explain the “oversight.”

The agency’s mandate is in part to ensure that the “conduct of federally regulated financial entities complies with federal legislation and regulations.”

Ursula Menke, commissioner of the agency, acknowledged to Flaherty she should have sought his approval for the excess spending.

“Internal processes have been considered and implemented to avoid similar situations in the future,” Menke said in her Dec. 21, 2012, memo to the minister.

Documents detailing the incident were obtained by The Canadian Press under the Access to Information Act.

A spokeswoman for the agency defended the over-spending, calling it an “exception” to the rules.

“FCAC respects the rules on hospitality which include some exceptions that applied in this situation,” Julie Hauser said in an email responding to questions.

Hauser added that only one of the gala guests was a federal public servant. The other nine were invited guests from organizations, such as the Canadian Bankers Association, whose member banks the agency regulates.

The speaker at the Nov. 15 event was David Chilton, author of The Wealthy Barber and The Wealthy Barber Returns, highly successful books offering financial advice for ordinary Canadians. The gala was held at the posh Royal York Hotel in downtown Toronto.

Flaherty, who appointed Menke to the post in 2007, responded to her memo saying he welcomed “your proposed plans to mitigate the risks of such an incident recurring in the future.”

A six-month extension to Menke’s current term ends June 3. Created in 2001, the agency has 70 employees and an annual budget of about $12 million.

Dubious expenses have dogged the Harper government in recent years, including a $16 glass of orange juice claimed by former cabinet minister Bev Oda; per diems and housing allowances improperly claimed by Conservative Sen. Mike Duffy; a gold-coloured English-only business card ordered by Foreign Affairs Minister John Baird.