Hon. Ellen L. Fair dough (Minister of Citizenship and Immigration):
The answer to part 1 of the question is that the board of trustees of the national gallery had asked for "authorization to negotiate for the purchase of the Breughel owned by Baron von Polnitz". At the same time the trustees asserted that the necessary funds had been appropriated and were available for the purchase. This statement was confirmed by the director of the gallery. Acting on this information, which later proved to be erroneous, the cabinet on May 2 authorized the Acting Minister of Citizenship and Immigration to give permission to the director to proceed accordingly.
During the ensuing week end it was found that the assumption of funds available in the purchase account was incorrect, and accordingly on May 7 the acting minister instructed the director to suspend negotiations immediately and advise the parties accordingly. This was done on May 8 and confirmed by letter from the director to the owner on May 12.
The answer to part 2 of the question is that the director of the national gallery did telephone to an agent of Baron von Polnitz on May 2 and asked him in effect whether he would find out if the baron would sell the painting for $350,000. The director then advised the agent that funds for the purchase would have to be approved by treasury board and provided by parliament.
It is clear that no authority existed to make a firm offer or enter into a contract for this purchase by the national gallery or the government of Canada or anyone on its or their behalf. The Financial Administration Act specifically requires that there be an appropriation provided by parliament for the purpose before a contract can be made.
It is reiterated that the authority asked for was to negotiate. Although granted in the first instance this was immediately revoked as soon as the lack of appropriation was revealed.