Sponsorship scandal

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The sponsorship scandal, AdScam or Sponsorgate, was a scandal in Canada that came as a result of a federal government "sponsorship program" in the province of Quebec involving the Liberal Party of Canada, which was in power from 1993 to 2006.

The program was originally established as an effort to raise awareness of the Government of Canada's (then led by Prime Minister Jean Chrétien) contributions to Quebec industries and other activities in order to counter the actions of the Parti Québécois government of the province that worked to promote Quebec independence. The program ran from 1996 until 2004, when broad corruption was discovered in its operations and it was discontinued ^{[citation needed]}. Illicit and even illegal activities within the administration of the program were revealed^{[citation needed]}, involving misuse and misdirection of public funds intended for government advertising in Quebec^{[citation needed]}. Such misdirections included sponsorship money awarded to Liberal Party-linked ad firms in return for little or no work, in which firms maintained Liberal organizers or fundraisers on their payrolls or donated back part of the money to the Liberal Party^{[citation needed]}. The resulting investigations and scandal affected the Liberal Party and the then-government of Prime Minister Paul Martin. ^[1]

Though an ongoing affair for years, it rose to national prominence in early 2004 after the program was examined by Auditor General Sheila Fraser, who found significant concerns.^[2] Her revelations led to the Martin government establishing the Gomery Commission, formally the Commission of Inquiry into the Sponsorship Program and Advertising Activities, headed by Justice John Gomery for the purpose of conducting a public inquiry and filing a report on the matter The Commission concluded that $2 million was awarded in contracts without a proper bidding system, $250,000 was added to one contract price for no additional work, and $1.5 million was awarded for work that was never done, of which $1.14 million was repaid. The Commission found that a number of rules in the Financial Administration Act were broken. The overall operating cost of the commission was $14 million.^[3]

In the national spotlight, the scandal became a significant factor in the lead-up to the 2006 federal election when, after more than 12 years in power, the Liberals were defeated by the Conservatives, who formed a minority government that was sworn in February 2006.