OTTAWA - Canada's now defunct think-tank on Latin America was plagued by financial management problems and was "disingenuous" to blame the Harper government for its demise, says an internal government memo.
That sharp viewpoint is revealed in a briefing note prepared by bureaucrats last summer for Foreign Affairs Minister John Baird in the months leading up to the shuttering of the Canadian Foundation for the Americas, or FOCAL.
The memo offers a view different from the one FOCAL's supporters have offered about the demise of the 21-year-old organization — that the government essentially killed it off by cutting its annual funding of $200,000.
Supporters questioned that decision because the Harper government has refocused Canada's foreign policy to include a robust re-engagement with Western Hemisphere neighbours. It was founded by the Mulroney Conservatives to foster research and policy analysis of Latin America and the Caribbean.
FOCAL is one of several organizations to fall under the government's cost-cutting axe, including the National Round Table on the Environment and the Economy, the arm's-length group Rights and Democracy and international aid group Kairos.
The cuts have sparked criticism that the Conservatives are choosing to do away with organizations for ideological or political reasons.
But the Baird memo on FOCAL appears to undercut that argument. It shows that the organization had been put on notice years earlier, under the previous Liberal government, that the government wouldn't pay to keep it afloat indefinitely, and that it needed to find new non-governmental sources of funding.
The Conservatives have not gone out of their way to publicly defend their decision to cut FOCAL's funding. It was only through an Access to Information Act request that the government's criticism of FOCAL's management and funding woes has come to light.
Baird was briefed in a June 16, 2011, memo, two days after FOCAL issued a news release announcing it was shutting down.
"The release implies that the Government bears responsibility for the closure, citing 'deep, unsustainable cuts to operating expenses' as the reason for the organization's financial difficulties," says the memo.
"This is disingenuous, given that contribution agreements with DFAIT (Foreign Affairs) explicitly stated core funding was provided on a short-term basis as a means of leveraging long-term funding from non-governmental sources."
Carlo Dade, FOCAL's last executive director, disputed any suggestion that the government was being blamed for the organization's demise.
"They misread and misinterpreted the letter we sent out," said Dade, who had obtained his own copy of the memo.
"It was a point about the general structure of funding, but for some reason they seemed to read into that we were blaming the government."
The Baird memo also refutes another claim in the FOCAL news release: that it was closing despite "increased support from the private sector."
It says that FOCAL was not on the path "to financial self sufficiency" but rather had only marginal funding from private resources."
FOCAL informed Baird and others in the Conservative government in a June 7, 2011, letter of its intention to shut down. In the weeks leading up to that, articles and editorials criticized the government for "not stepping in to prevent FOCAL from closing due to lack of funds," says the memo.
Dade said FOCAL tried to get private sector partners, but the government didn't do anything to help.
"We got favourable noises and responses but we were never able to get enough attention," he said.
"The private sector said, 'the government — meaning the PMO (prime minister's office) — or someone higher is going to have to give us a call and invite us to Ottawa to talk about this'."
The memo to Baird lays the responsibility for FOCAL's demise squarely at the feet of its managers.
"FOCAL's financial difficulties stem from long-running structural and management problems, related to the organization's inability to diversify its sources of funding," it says.
It says the Foreign Affairs Department gave FOCAL $200,000 a year from 1996 to 2003 but that the money was only meant to sustain it on a "short-term basis."
"It was explicitly stated in contribution agreements with FOCAL that the core funds provided were to be used to leverage long-term funding from non-government sources with a view to the organization eventually becoming self sustaining."
In 2003 — three years before the Tories came to power — Treasury Board directed that organizations had to be "weaned off" of their "dependence on core funding."
Yet from 2003 to 2006, Foreign Affairs kept giving FOCAL $200,000 a year in "project funds" and not core funding. Since then, FOCAL has managed to cover its expenses from "project funds," from both Foreign Affairs and the Canadian International Development Agency.
"Even after the shift away from core funding, the Government continued to provide significant funding to FOCAL, some of which was aimed at helping the organization to become financially sustainable," the memo said.
Ultimately, Dade said, the business model for FOCAL was always non-viable.
"It was only viable as long as the government was going to toss up tonnes of money," he said.
"It doesn't mean you're blaming them for doing it. It's a causal relationship without blame."