Government Operations Committee on March 6th, 2023

[Ted Gallivan]

Mr. Chair, I would say in the earlier cases when we were still securing funding and justifying the project and the value added of an outsider confirming the value to secure support and to convince ourselves that these were good investments, I think that value of a truly independent outside view was there.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you.

[Ted Gallivan]

Now that we have decided to implement and the decision has been made—

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you.

[Ted Gallivan]

—I think the focus shifted to the go-forward.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you.

How much time do I have?

It's 30 seconds. I will cede my time.

[The Chair, Conservative, Kelly McCauley]

We'll go to Mr. Kusmierczyk for five minutes, please.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you, Chair.

Thank you, Minister Mendicino, for being here at OGGO today and for your testimony.

Thank you so much for your regular visits to Windsor. I think you have been there four times in the last six months. We really appreciate the attention you're providing to the Ambassador Bridge and the good folks at CBSA who work there. I know you visited and toured CBSA a number of times, so thank you so much for all the attention you're bringing to our community and that important crossing. I also want to thank you for advocating help to cover the cost of policing of the bridge protests. Thank you for being a champion for our community.

I want to speak about one particular contract, the CARM contract. This is the CBSA assessment and revenue management system. CBSA is the second-largest revenue collector, second only to the CRA. I believe they bring in approximately $31 billion, which is a sizable amount, in terms of duties and imports.

Could you or one of the other folks around the table speak to the purpose of the McKinsey contract as it relates to the CARM?

[Marco Mendicino, Liberal, Eglinton—Lawrence, ON]

Thank you, Mr. Kusmierczyk, and thank you as well for your advocacy on behalf of your community. The constituents of Windsor—Tecumseh are served well.

With regard to the specifics of your question regarding CARM, I will turn the floor over to Mr. Gallivan.

[Ted Gallivan]

Again, I think in designing this new system we want to facilitate the process so that small importers, casual importers, one-time importers can do it easily. At the same time we want to have the data that can help us detect errors and clean those up. We also want the data to audit people who are creating an unlevel playing field by deliberately breaking the rules and not paying what they should.

In getting that calibration right, talking to somebody like McKinsey, which advises dozens of multinationals and other governments—they have seen this many times—about how you define those objectives and how you make the trade-offs between them....

If we had a system that shut down the border and didn't let anybody through but maximized revenue, that wouldn't be good for anybody else. There would be no revenue to collect because it would be too onerous.

I think it really was around that benchmarking to look at our plans and tell us whether we're hitting the sweet spot to let the compliant people through quickly and address the non-compliant people as quickly as possible.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

I really appreciate that answer.

This is important to my community. I can tell you that Windsor is home to Canada's largest independently owned customs agent, Farrow. They have over 100 years of experience. They employ over 700 people. They are an incredibly important part of our community, so what you're talking about here, the modernization of these systems, is critical.

Why does it make sense to bring in an objective external evaluator to take a look at whether your systems are working the way they should and that you're hitting that sweet spot, as you say?

[Ted Gallivan]

One really clear example is to go and talk to businesses like that as a third party, as an independent source of the truth, and take down that feedback. If I show up at CBSA and ask what they think about our CARM thing, there's a worry about the repercussions and the dynamics. Something very simple that an outside consultant did for us in this case was to seek that feedback from trade chain partners directly and independently.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Because McKinsey is such a large network—tens of thousands of employees in over 100 countries—now they're getting best practices not just in our own backyard, but best practices further afield. Is that correct? They're holding you to some of those best practices as well. Is that correct? Is that one of the reasons you seek external consultants?

[Ted Gallivan]

Large firms will have seen similar changes and similar problems, so they tend to know how to frame the question, how to ask the question and how to surface the situation. I think the government is going to large global firms because they've done it before.

It goes back to the value proposition between public servants and consultants. When the consultant has done it 50 times before, it's going to be a lot faster for them, versus time for the public service to even develop the questions.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Minister, even though we're seeing increases in the use of external consultants, we're still seeing significant investments in frontline staff at CBSA, and $137 million was earmarked in the fall economic statement specifically to boost frontline capacity. Can you update us a little bit on that?

[Marco Mendicino, Liberal, Eglinton—Lawrence, ON]

Yes, those investments were made. They will contribute to additional frontline resources that will protect the integrity of our borders.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Kusmierczyk.

Mrs. Vignola, you have two and a half minutes, please.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Earlier, Ms. O'Gorman, you were talking about the redaction that was done according to the standards.

I invite you to compare the French version and the English version, because the French version has redaction that is not present in the English version. In addition, there are several pages of the McKinsey documents that are purely and simply illegible, misspelled. And I'm not even talking about the translation: instead of translating “deep dive” as “deep analysis”, it was translated as plongée profonde “deep dive”; I don't know which scuba diver they used. This really should be looked into, because it is so unprofessional that it borders on a breach of parliamentary privilege. This is really unfortunate. I have the impression that a machine was used to do the translation, a type of program like Google Translate. Even my students didn't have permission to use it.

I will continue on the subject of French. I had a surprise when I read appendix A of the statement of work. In clause 10, it says that the principal working language is English, with the possibility of English and French. I accept this. However, I was surprised that the deliverables were to be in English only, and that the in‑person presentation would be in English, or French, if necessary. I thought Canada was a bilingual country. Even in the contracts, it would seem that that is not the case.

Will a change be made to this? I think the McKinsey company also works in France. So they are able to translate their documents into both official languages.

[Erin O'Gorman]

I am sorry, but I have no information as to why the documents were not required in both official languages. I assure you that the Canada Border Services Agency, or CBSA, is a bilingual organization, and that at the headquarters where this work was delivered, the staff is bilingual.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you. I really had an extremely unpleasant surprise.

Would you characterize the advice you received from McKinsey as advice tailored to Canada's particular needs?

[The Chair, Conservative, Kelly McCauley]

Give a very brief answer, please.

[Ted Gallivan]

In my opinion, yes. There are points that are tailored to our agency.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

All right. We should also take a look at what McKinsey says about its own services, because it says “a proven recipe for success”, not “tailored advice”. We may have a copy and paste of what was done with another client. We should also make sure that there wasn't a transfer of information.

Thank you.

[The Chair, Conservative, Kelly McCauley]

I'm afraid that is our time.

We'll have Mr. Johns for two and half minutes. Then we'll have a final five minutes with Mr. Barrett and a final five with Mr. Housefather.