Government Operations Committee on March 22nd, 2023

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you, Ms. Kusie, and thank you for the important question.

I will turn to ADM Page, who has his finger on this file at all times.

[Simon Page]

Thank you very much for the question.

We are working hand in hand—that's the first thing I would like to table—with the Department of National Defence with respect to the requirements that will be behind the NORAD modernization. PSPC, as stated by the minister, obviously is a requirements-based organization. The requirements from the client departments come our way, and then we craft a procurement strategy and the right solicitation process for the various requirements.

We have specific actions under the NORAD modernization portfolio that are in play now. One is with the strategic tanker and transportation capability. We have some big milestones within reach at the moment. Last year, we also issued a contract to Nasittuq Corporation for the north warning system, which is a key part of the NORAD enterprise. We also have some specific pieces from an armament point of view, one of which you mentioned. I don't have the exact details of when and where we are going to get the equipment, but those processes are in motion at the moment.

There are also other things that we're contemplating now with the Department of National Defence, projects that are in options analysis that are slowly going to come our way at PSPC.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much for those responses.

I'd like to move on to the issue of foreign interference, which of course the House has been seized with these last few weeks. Of course, we're very grateful that Madam Telford has made the decision to come forward and testify. We're certainly looking forward to any light she may shed on this situation.

Relevant to this committee and to your portfolio, Minister, this committee has previously studied issues related to the government's giving contracts to the Chinese government. I'd like to know if you've issued any directives as of late relative to contracts between our government and the Chinese government.

Thank you.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

This obviously is an important question in relation to essentially cybersecurity, which is a particular aspect that we're very conscious of.

Perhaps the president of Shared Services, Sony Perron, could give us a bit of an overview on how we are reacting to potential foreign threats.

[Sony Perron, President, Shared Services Canada]

Thank you, Minister.

Every major procurement we process at Shared Services Canada about technologies goes through what we call the supply integrity chain review. We do not start by saying that we don't do business with this business or this technology. We go through the process and take the requirements. Every technology we procure will go through this process.

We are doing this with the Canadian centre for cybersecurity. They have the expertise. They also have the foreign knowledge to help us identify issues that can come with the technology for the contract we are putting in place.

We are really diligent and strict about this process. This, I think, protects the Government of Canada from a cybersecurity perspective.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you. That's your time.

Mr. Kusmierczyk, I understand that you're finishing off for us.

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

Thank you, Mr. Chair.

Thank you so much, Minister, to you and your team for coming here to OGGO once again and providing terrific insight.

In January, Washington hosted the sixth greening government initiative meeting. There were about 70 countries that were represented in Washington, so I figured I would raise a question in the spirit of President Biden's visit tomorrow.

In terms of our initiatives or strategy of greening real property, again, it's my understanding that you hold the real property of the federal government file as part of your portfolio. I wanted to ask you if you can speak to us about what is being done to help green federal buildings and reduce greenhouse gas emissions.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you so much, Mr. Kusmierczyk.

Yes, indeed, PSPC holds the real property of federal government buildings and, therefore, it's very important that we take a leadership role in terms of fighting climate change and reducing greenhouse gases whenever we can. There has been some good news. In the last year, PSPC reported a 57.3% reduction in greenhouse gas emissions from its own buildings compared to the baseline established in 2005-06.

One of the conditions in my mandate letter was the requirement that all federally owned facilities use 100% renewable electricity by 2025. In order to meet this objective, PSPC created the national clean electricity initiative. We have been using initiatives such as Atlantic clean energy, the Alberta and Saskatchewan clean electricity initiative and, in the Ottawa region, the energy services acquisition program, which provides heating services to many of the federal buildings. We have been working very diligently on this. The goal is 100% renewable electricity by 2025.

In terms of the renewal projects on buildings, we are working very diligently to ensure that employees are housed in safer, greener and more accessible workplaces. There has been a lot of action to improve buildings' energy efficiency as well as electricity grid improvements. I have heard of a number of examples. For example, in the GTA with the St. Clair building, a constituent of mine told me that he's particularly proud of the efforts that were made in that revitalization project, and it's a net-zero building.

We are making some very good progress in this area.

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

That's amazing to hear, and it's terrific to hear that the government is taking concrete action and steps to green our operations.

To continue on that line of questioning in terms of renewable energy initiatives, the government announced two major initiatives, one in Alberta and one in Saskatchewan, that support Canada's commitment to investing in renewable energy and achieving the goal of net-zero emissions by 2050.

Minister, can you please share the details of some of these investments and tell us how this furthers the government's goals on greening initiatives?

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

PSPC signed an agreement with Saskatchewan's main supplier of electricity, SaskPower, to power federal government operations in Saskatchewan using clean renewable electricity. PSPC awarded a $500-million contract to Capital Power to power federal operations in Alberta with clean electricity.

These two initiatives will help reduce emissions in Alberta and Saskatchewan by about 166 kilotonnes of carbon dioxide equivalent, which is equivalent to the annual greenhouse gas emissions of more than 50,800 gas-powered passenger vehicles. I'm very pleased to see someone try to quantify it in a way that we could visualize.

As you have said, the Government of Canada is taking meaningful action on its commitment to power the federal government with 100% clean electricity by 2025, to fight climate change and to foster a green economy.

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

How much time do I have, Chair?

[The Chair, Conservative, Kelly McCauley]

You have 12 seconds.

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

I will share my time.

[The Chair, Conservative, Kelly McCauley]

Wonderful.

Minister, thank you for being with is. That is your time.

While the minister departs, I'll just update you. We're still waiting for word from the House. Apparently there's no vote just yet.

Very quickly, before we continue—I will update you as soon as we know more—at the very end, I need a couple of minutes to go over some of the document issues we've been dealing with. That's the committee business part.

We will continue now with the rest of PSPC and Mrs. Block for five minutes, please.

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

Thank you very much, Mr. Chair.

I did have some questions for the minister, but I'm sure you folks at the table can answer the question.

The department contracted McKinsey for something called the Phoenix stabilization. There was an article that was published, and we have heard that in one year $125 million was paid in damages.

If McKinsey was meant to stabilize the situation, why has the problem continued to persist at such a high level?

[Arianne Reza]

I'm going to circle back to your first question about damages. It really is the purview of Treasury Board officials to provide a little bit more context.

As it relates to the work that McKinsey did, McKinsey came in through a competitive process. There were several bidders, they competed for it and they brought us some efficiencies. They looked at how to automate the processes we were doing manually better. The more you drive down the manual processing, it creates a positive expertise to help us accelerate to get to a stable state. We're still working on it, but they have been able to quantify some efficiencies from these levels of effort.

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

Okay. Thank you.

In our study on the government's contracts with McKinsey, we have heard other departments, quite frankly, place the onus on the Department of PSPC. When questioned about why they would choose to work with a firm like McKinsey, they simply say that PSPC has pre-approved McKinsey, so it is a matter for your department to answer for.

What would it take for McKinsey to be banned from contracting with the federal government?

[Arianne Reza]

Any supplier who does business with the Government of Canada is reviewed against the government's integrity regime. PSPC is the holder of that regime. There are two main keys. One is if they're convicted of a criminal charge, and the other is if they've faced charges in Canada. That would, then, trigger the review of their ability, suspend their ability or debar the vendor, depending on severity, from doing business with the Government of Canada.

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

Thank you very much.

We know that McKinsey plays on both sides of contractual agreements. When they are working for a government, they may also be working for a company that is actually lobbying the government, for example, when we take a look at the associates working for Purdue Pharma and the FDA at the same time. They are also working with adversarial regimes to further their interests and are a threat to our values and our allies.

It would seem to me, given we know this about McKinsey, that there would be steps we need to take to strengthen the guidelines that make a company eligible to work for the government to ensure these types of situations don't happen.

Can you tell me whether you would be willing to take steps to strengthen the guidelines, and what that might look like?

[Arianne Reza]

There are a couple of different elements to the question. It's to review the regime, the integrity regime, that's in place, and use that as the guideline and the assessment tool.

Furthermore, given the scrutiny and given the study that OGGO is doing, we of course at PSPC.... Our job is to set up the frameworks, the RFPs, the procurement and the clauses, the guidance and the training, so whatever is going to come out of this particular stage will be, of course, reviewed and amplified to ensure we are creating a fair, open and transparent procurement process that departments across the system could avail themselves of.

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

Thank you.

[The Chair, Conservative, Kelly McCauley]

We will now move to Mr. Jowhari for five minutes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair.

Thank you to the officials for coming today.

I want to go back to something that one of our colleagues raised earlier about the number of RFPs. You talked about roughly 36,000 or 37,000. I didn't write it down.

Can you share with us what the protocol is for raising any specific RFP to the level of the minister being aware of...? I'm sure the department doesn't go through all 37,000 RFPs with the minister. Is there a protocol or a procedure in place that would identify the ones worthy of being highlighted or of being briefed on?

If you could comment on that, I would appreciate it.

[Arianne Reza]

Thank you very much, Mr. Chair.

I should be precise. The 37,000 transactions that are associated with procurement are not all RFPs. They can be amendments. They could be contract terminations. They are all events that we touch.

I should have added in my previous answer that many of the RFPs are posted on the CanadaBuys website, which is a collaborative website that the Government of Canada runs in coordination with all public jurisdictions in Canada so that you're able to see all the RFPs that are live.

In response to your second question, they get elevated due to complexity, due to the procurement plan or due to the risk associated with a procurement. For example, in COVID, there were many emergency authorities that had to be brought into place and many different types of procurement that were elevated to the minister's attention.

There are many different aspects to the answer, but it's really driven by risk, complexity and value. When it's over a certain threshold, depending on the commodity or service we're buying, it will then go to Treasury Board ministers to seek their approval to enter into a contract.