COMMISSION OF INQUIRY RESPECTING THE MUSKRAT FALLS PROJECT Transcript | Phase 3 Volume 8 Commissioner: Honourable Justice Richard LeBlanc Friday 26 July 2019 July 26, 2019 No. 8 CLERK (Mulrooney): All rise. THE COMMISSIONER: All right, that one will be entered as numbered. This Commission of Inquiry is now open. The Honourable Justice Richard LeBlanc presiding MS. NAGARAJAH: Madam – as Commissioner. THE COMMISSIONER: And that’s at tab 1, I Please be seated. believe, of the book. THE COMMISSIONER: All right. MS. NAGARAJAH: Yes, that’s tab 1 of the binder. Ms. Nagarajah. THE COMMISSIONER: Okay. MS. NAGARAJAH: Good morning, Commissioner. MS. NAGARAJAH: Madam Clerk, can you please bring up Exhibit 04465? Today’s witness is Mr. Mel Cappe. We are qualifying Mr. Cappe as an expert witness. So Mr. Cappe, can you please review for the I’ll start by entering his CV as an exhibit so that Commissioner, highlighting your education he can review his qualifications with us. Other experience that is – your qualifications for the counsel may have questions – an opportunity to Commissioner, highlighting your experience and pose questions to him. education that’s most relevant to the topics you’ll be discussing today. So we’re having – we’re seeking to have him qualified as an expert in the area of governance MR. CAPPE: Sure. and the role of the public service. Assuming his qualifications are accepted by you, I’ll then go So if we just go – well, so my education, I did a ahead and have the remaining exhibits entered bachelor’s degree in economics at the University into evidence. of Toronto; went to western Ontario for my master’s degree; went back to Toronto, was THE COMMISSIONER: Thank you. Ph.D. (ABD) – that’s all but dissertation; and then have a couple of honourary doctorates. All right, so maybe I could just ask Mr. Cappe to stand, please, and I guess you’ll be sworn, so go If you go down a bit further, you’ll see that I had ahead. a number of positions in a number of different departments. The best title I ever had in the CLERK: Do you swear that the evidence you Government of Canada was that second one, the shall give to this Inquiry shall be the truth, the senior economist for the Department of Finance. whole truth and nothing but the truth, so help It sounded like I was the senior economist in the you God? Department of Finance. I was not; there were many, many senior economists. But I worked on MR. CAPPE: I do. a number of different issues in a number of different departments. CLERK: Please state your name. I – but as you can see, one of the relevant issues MR. CAPPE: Melvin Samuel Cappe. here is that the largest part of my career was spent both at the very beginning and towards the CLERK: Thank you. end in the Treasury Board Secretariat. And if qualified, I will speak a fair bit about Treasury THE COMMISSIONER: All right, go ahead. Board policies. MS. NAGARAJAH: The first exhibit I’m I ended my career as a High Commissioner to seeking to enter is P-04465, which is Mr. the United Kingdom and, prior to that, I was Cappe’s CV. secretary to Cabinet for 3½, clerk of the Privy Council and head of the public service. Those Commission of Inquiry Respecting the Muskrat Falls Project 1 July 26, 2019 No. 8 titles are – well actually, clerk of the Privy Commissioner, I’m satisfied to go forward with Council and head of the public service is in the this witness and, again, it’s in the area of Public Service Employment Act, which is governance and the role of the public service. relevant to my testimony. Other counsel may have some questions. I then went on to head the Institute for Research THE COMMISSIONER: All right, any on Public Policy where we did peer-reviewed questions on Mr. Cappe’s expertise? I’m not research and had academics doing it and surprised. reviewed by our staff and then published, at which time I did some – managed some projects, In the circumstances, I’m quite satisfied that Mr. research projects on public policy, but also on Cappe is well able to provide opinion evidence governance. to this Commission related to governance and the role of the public civil service. So he will be And for the last 10 years, I’ve been a professor permitted to give such evidence. in this School of Public Policy and Governance, prior to last year when it was merged into the MS. NAGARAJAH: Thank you, Munk School of Global Affairs and Public Commissioner. Policy. So that gives you a sense of some of my background. I’m going to go ahead and enter a number of exhibits. Some of these are exhibits from other – I should note that during that time at the from the previous phase that are now being University of Toronto, I also taught a course to entered, so there’s going to be a number of them. the Ontario public service entitled risk analysis to public servants, and that’s relevant in the THE COMMISSIONER: Okay. context of dealing with risk analysis. And when I was High Commissioner I spent a fair bit of MS. NAGARAJAH: So we’ve got P-01810, P- time with the United Kingdom government 01814, P-01818 – focusing on using my contacts, essentially, with the senior (inaudible) at – to deal with the UK THE COMMISSIONER: Okay, just slow and I – if I will speak to the issues, I will cite down a bit there. some UK examples as well. MS. NAGARAJAH: Oh sorry. And since then, while at the University of Toronto, I’ve done a number of studies on THE COMMISSIONER: 01810, 01814… governance, both academic institutions and in government. And I have done some contract MS. NAGARAJAH: 01818 – expert work for a couple of departments, including the Department of Public Safety. THE COMMISSIONER: Mmm. MS. NAGARAJAH: And what courses do you MS. NAGARAJAH: – 01820, 01844, 01845, teach currently at the Munk School? 01862, 01871, 01882, 01883, 01906, 01924, 01934, 01935, 01954, 01963, 01970, 01978, MR. CAPPE: I teach two courses; one is called 01979, 01980, 04465, 04466, 04481 to 85, the role of government. I co-teach that, actually, 04529 to 04532, 04541 to 04542, 04522 to with a former premier of Ontario, Bob Rae. And 04526, 04533, 04535 to 04540, 04543 to 04547 I co-teach – I coordinate both courses. I co-teach and, lastly, 04548. a course called the capstone course, which is intended to draw together everything that the THE COMMISSIONER: 04548? two-year program in the Master of Public Policy provides. So both courses are Master’s level MS. NAGARAJAH: Yes. courses. THE COMMISSIONER: All right. All of MS. NAGARAJAH: Okay, thank you. those exhibits will – as numbered, will be entered. Commission of Inquiry Respecting the Muskrat Falls Project 2 July 26, 2019 No. 8 MS. NAGARAJAH: Okay. and conclusion that I want to leave the Commission with is that, first of all, So, before the witness begins, I just do want to governments have to be deliberate about how to note for counsel that Mr. Cappe is here to speak manage risk. In my experience, and as outlined generally about the duties of the public service. in the literature, governments have to be very So, he will not be commenting, specifically, on deliberate because risk will otherwise come back anything related to Muskrat Falls or specific to get them. issues dealing with the Newfoundland and Labrador Government. Governments create institutions to assist in this and establish policies and insist on certain So, Mr. Cappe, with that, please go ahead with practices to assess and manage risk. And risk – your presentation. and this is a fairly technical way of thinking about these things because mathematicians, MR. CAPPE: Thank you. And I’m happy to economists and others have developed a body of answer questions. work – a body of knowledge on risk and what it means and how it should be assessed. If we could have the slide show – Noteworthy is that I never talk about eliminating THE COMMISSIONER: So this will be P- risk. It isn’t possible given that we don’t know 04466. what’s going to happen later today, let alone tomorrow, what risk is optimal – we are not MS. NAGARAJAH: Yes. aiming for zero risk. We’re aiming to reduce risk and manage risk, but zero risk is not the desired THE COMMISSIONER: And it’s at tab 2. outcome. Rather, it’s – our objective is to come to a desired quantity of risk, how much risk is MR. CAPPE: There. acceptable, how much risk do we want to undertake. And this, of course, depends on the So, if – for the Commissioner and counsel, I consequences of the action. guess I should outline at the beginning what I am going to – there we go – what I’m going to If the action – if the question is on the safety of talk about. And I just want to note that I will talk how a road is designed, then you get a different about the general role of the public service in a sense of risk because there’s going to be life- Westminster parliamentary democracy, but there and-death decisions. In other cases, if it’s a were a few questions that were particularly policy of granting money to recipients, the life raised by Commission staff that I will address as and death is less likely.