Government Operations Committee on May 28th, 2009

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

We are repairing them quicker than expected. That's the good news, Mr. Proulx.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

That was not my question. My question is how many times are you going to make this announcement?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

We are making this announcement because we are in the process of going ahead with it. We know that this is important because, essentially, accelerated infrastructure will enable us to proceed with the work more quickly than we wanted to. If we had not had an Economic Action Plan for Canada, which you approved, we would not have been able to be up and running immediately in spring. We would perhaps have had to wait until the fall. This is a good piece of news for the National Capital Region. There are already shovels and spades at work on the Alexandra Bridge. This is why we made the announcement. This work is going on right now, as we speak. These are good announcements.

We are telling people that this is concrete work. We are working on the structure, we are taking all of the action required to preserve the structure, paint, beams, etc., which may have been put off. We can proceed more quickly. Yes, we are announcing this. We are doing some good work. People want to know about it. This is very legitimate.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Thank you, Mr. Minister. However, I do find that making the same announcement five times is a bit much.

[The Chair, Liberal, Derek Lee]

Thank you.

Ms. Bourgeois, you have eight minutes.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Thank you, Mr. Chairman.

Good morning, Mr. Minister. I am pleased to see you here this morning. I would also like to welcome the people accompanying you.

Two and a half years ago, Minister, the Auditor General of Canada said that there had been many irregularities in the awarding of a contract to Royal LePage. However, last April, you announced that you would not be renewing the contract with Royal LePage. Then, on April 29, your department solicited bids. The closing date for this request to tender was June 19, an extremely short timeline.

Why did you wait so long to announce that the contract awarded to Royal LePage would not be renewed?

Do you not think that allowing only a scant six weeks to award what was the Royal LePage contract—which pertained to building leases—is a bit short?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Thank you for the question.

First of all, my predecessor or the department did indeed make a commitment here, at the time, to deal with the problem raised by the Auditor General. This was done. I am here before the committee today and I am proud to tell you that this has been done, because this was not an easy file. It is rather complex. Several departments are involved in this process. Data needs to be collected and these are files where we must proceed cautiously.

A relocation contract is not awarded the same way as a regular construction contract is awarded. What I can tell you is that I am very comfortable being here, today, to be able to tell you that we "delivered the goods". A tender process is currently underway. We are hoping that the contract will be given by September 1. That is what we are aiming to do, and that is the objective that we set for ourselves. All of the legal timelines are currently being respected. We are fulfilling the commitments that we made before this committee.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Minister, two and a half years after it was pointed out that there were some irregularities in the contracting process, you chose to go to tender. This was done two and a half years later, which does not give new bidders very much time to become acquainted with the file and deal with the paperwork. We have some serious questions about this.

What occurred in your department with respect to this file? Something happened. You could have made an announcement two and a half years ago that the Royal LePage contract was not going to be renewed, making it possible for other bidders to acquaint themselves with the file and present a proper bid. We have some serious questions about this.

Moreover, through your deputy minister, you gave some assurances to small- and medium-sized businesses that professional services would not be included in the Government Enterprise Network Services initiative with respect to this infamous IT file. Your deputy minister, whose word I am not questioning, told us that small- and medium-sized businesses would be able to submit a bid.

Can you assure us that this is the case today? I would like you to do this, in front of us.

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

You talked about two and a half years. I would like to put things in perspective. A report from the Auditor General is coming. If we could start everything over in one fell swoop, we would do this, but things don't work like that. We have a contract that is still valid, and there are legal constraints, procedures that are underway, as you know. We also have to gather data from the client departments. My officials acted diligently, they collected the data, and a process is underway to ensure that we will be able to award a contract by September 1, 2009. That is what occurred. I would repeat that we have "delivered the goods" as far as this is concerned.

In answer to your second question, professional services were excluded outright. The deputy minister stated this, and I can state to you that this is the case.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Representatives from Industry Canada told us that 5.1 million people, nearly half of the labour force in the private sector, work in small- and medium-sized businesses in Canada. These small- and medium-sized businesses are very annoyed with the way that your department deals with them. I believe that this was said openly before this committee.

I am wondering, given the difficult economic times, whether or not it would be appropriate to rethink to process for awarding contracts. We have resolved the information technology contract awarding process, but we know that you want to group together contracts pertaining to furniture and other aspects.

Would it be possible to ask your deputy ministers to ensure that more priority is given to small- and medium-sized businesses and that consideration be given to the economic contribution they make in Canada, which is currently experiencing a recession?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

I quite agree with you in that respect. You are preaching to the converted. Small- and medium-sized businesses are the economic lungs of our country. Just look at the results since 2005. In that year, the percentage of contracts awarded to small- and medium-sized businesses was 43%. In 2005-2006, this rose to 46% and now it is 49%, worth $4.8 billion in contracts. So there is a clear upward trend.

We also have the small business office—

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

—which is worthless.

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

That is false. That is what you are saying, but we have testimony indicating that this office is working, and we have good feedback from the sector.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Don't make us laugh, Minister.

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

I'm going to give you another example that makes me laugh.

You want to attack the bundled IT network process. A report was commissioned. We heard from industry representatives, and some are satisfied and are saying that this is a good approach, that this is the way to go. So you can see that we are listening. The report was drafted by our department, with the assistance of consultants. Their report will be tabled here, it will be submitted to the committee.

Personally, I am looking forward to seeing the observations and recommendations of the committee because the report includes good news. There were some irritants. However, we had a good consultation. We listened and we heard. I will therefore be paying close attention to the committee recommendations.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Minister, were it not for the work of this committee, which did in fact hear the voices of small and medium businesses, I'm wondering whether or not they would have been heard. These small and medium businesses said that they were dissatisfied with the relationship they had with Public Works and Government Services Canada.

That being said, would it be possible for your deputy ministers, in the next few months, to sit down with the small and medium businesses from other sectors? As you were saying, you heard representatives from information technology, but there are other sectors representing, for example furniture, where people are saying that they are not being listened to.

Could you instruct your deputy ministers to sit down with representatives from small and medium businesses in order to reach an agreement that is as favourable, as you have said, as the one for IT?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

The directive exists, and the facts prove that. As I said, the numbers have increased steadily since 2005-2006. We created a tool, that is, the Office of Small and Medium Enterprises. You may make all the comments you wish, but we have received positive feedback on this subject, and nothing is perfect. I admit it, everything can be improved. That is also why we opened an Office of Small and Medium Enterprises here in Gatineau. We saw that there was a need. We continue—

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

We insisted—

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

No, we ensured that it was accessible and located on the ground floor. There are no security mechanisms. It's completely different.

Yes, there is a commitment. If we take the trouble of opening an additional office here, as was done elsewhere in the country, and if the deputy minister responsible oversees it and it works, then that means that a directive is in place and ensures that the Government of Canada does indeed want to work with SMEs. That's why the trend is increasing. It's amazing to have gone from 43% to 49% in four or five years. The results are there.

[The Chair, Liberal, Derek Lee]

Thank you.

Mr. Gourde, you have the floor for eight minutes.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you very much, Mr. Chair.

Thank you for your visit, Minister, Deputy Minister and Assistant Deputy Ministers.

In your introductory presentation, you mentioned that you are currently exploring measures to streamline processes to allow more flexibility in contracting.

Can you give us more information on these measures and explain to us what goals are targeted?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Thank you for the question. You have raised a very interesting point.

Earlier, we discussed the topic of SMEs. Yes, the process must be streamlined. Industries and SMEs are part of the solution. The last thing we should be doing is playing hide-and-seek with our partners. Instead we should agree to see how we can improve the contracts, how we can streamline them and make them more practical, while maintaining the aspect of openness and transparency. That is the direction that we have taken. We want to adapt to the current economic reality. It's dynamic and things are in constant flux.

As concerns the overall contracting process, I am often called upon to work with the Minister of Industry, the Minister of National Defence and the President of the Treasury Board. We talk among ourselves to ensure that nothing is done in isolation and that the process is coherent. However, what is important, and something we often hear about from the industry, is a concern about the management of risk sharing. We are sensitive to that. If contracts are too cumbersome and expensive, it means that it is the taxpayers who risk paying for them, because the industry may have to assume a disproportionate share. That's why I used the expression "playing hide-and-seek" with the industry. That would be the worst thing to do.

The industry and our private sector partners are not enemies, they are just that, partners. That is why we have to get along in order to work and do good business together. We must maintain a positive dialogue through the Office of Small and Medium Enterprises. We must also ensure that we have what we want, at the end of the day, that is, openness and transparency. That will in turn result in the best value for money, especially when we think of the taxpayers' money that will be invested.

There is also another aspect that is often raised: the specifications that accompany the tenders. Sometimes, when our department clients issue tenders, they may include conditions that are extremely specialized and technical that may be incomprehensible for the industry. We are trying to hold discussions in this regard. Perhaps specifications X are not the best fit for a given project Y, and perhaps specifications Z would be better, for example. The industry can advise us to that end. That's why we maintain an open dialogue.

In general, that is the direction taken by the department. I can sum it up very simply: we must work together and be attuned to the industry. That is why consultations were held. Earlier, the example of GENS was given. There are consultations in the furniture sector. This subject was raised earlier. As concerns tenders and contracting agreements, consultations are held on an on-going basis to create this partnership dynamic.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Minister, we often hear the opposition raise negative points concerning the federal government's contracting process for SMEs.

Can you give us some concrete examples of SMEs that are satisfied? Do you have any good news for us?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

I certainly do. I have some quotes here that I will read you in English.

Joe Schnurer, of Bumper to Bumper, an auto parts dealer in the western region, attended a business seminar on selling to the military and received guidance from OSME about accessing federal opportunities. Mr. Schnurer was able to access requirements, and through his innovative approach and creativity was able to secure over $10,000 worth of business supplying the government with insect repellent for the Canadian Forces.

This is an example of someone for whom the federal apparatus was mysterious and mystical. He consulted the Office of Small and Medium Enterprises, and today he is in business. It's as simple as that.

Also, Mr. Oskar Bruk, of Brooks Industrial Metals, sold highly technical parts for the amount of $105,000. Ms. Marie-Claire Thauvette, of Fast Forward French, a French-language training centre, reports that since she registered, she has had business opportunities that she would not have had otherwise. We know that the federal government can help out with training.

There are also seminars organized in the regions. The people from the Office of Small and Medium Enterprises travel not only to Montreal, Halifax and Gatineau, but to many other places as well. We receive very positive feedback. Some people could not even have imagined such a thing and say that they were not aware, that the process seemed so complex, but that now, they can do business because they have a point of contact. So there is an entire process of assistance.

I encourage you to go and see the office was have just opened in Gatineau. There is no security mechanism or elevator for 10 floors. The door is accessible from the main floor, and you can meet with people from the department immediately. The technology tells you how MERX functions. There is everything necessary, interactive sessions, etc.

Too often, people become disheartened because they do not know where to start, but all that changes after one half-day visit. The three stories I have just read you are not to be overlooked. When a contract of $105,000 is awarded to an enterprise, that's a success story. So one half-day visit to the Office of Small and Medium Enterprises is an excellent investment. Mission accomplished. The numbers are increasing, and this proves that we are on the right track. From 2005 to now, the number of contracts signed with SMEs have risen from 43% to 49%, which represents $4.8 billion in purchases for last year alone. We are thus going to continue in this regard.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Do I have enough time left?