Public Accounts Committee on March 7th, 2024

[The Chair, Conservative, John Williamson]

Thank you, Mrs. Shanahan. There was no misquoting. They are engaged in a discussion.

Mrs. Kusie, you have the floor.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

We discuss. They cover up.

[The Chair, Conservative, John Williamson]

You have the floor for about 20 seconds for your closing remarks, please.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much, Mr. Chair.

I think it's very evident; any individual knows that if you take a sample size of something, you can apply it to a larger subset. If you take polls as an example, you can take a small poll and apply it to a larger subset. That's just one thing, as an example. I think we would find as well that the mismanagement we have seen in arrive scam is potentially being used in this larger subset of the largest project in the history of Canadian IT government projects.

Thank you very much, Mr. Chair, and thank you to the witnesses.

[The Chair, Conservative, John Williamson]

Thank you very much.

Ms. Bradford, you have the floor for five minutes, please.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Thank you.

I will give my turn over to MP Shanahan. I have to leave for a ministerial announcement. MP Kayabaga has stepped up, so coverage is here.

The floor is yours, Brenda. Thank you so much.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you.

Thank you very much, Chair.

I want to take this time to thank the deputy minister and the entire procurement team for really stepping up during those early days of the pandemic. When the world was in a health crisis never before seen in 100 years, all hands were on deck to make sure that we first had the PPE. I remember how desperate people were to obtain that protection equipment. We were also ensuring that we were collecting the right information to adequately quarantine people until such time as we got the vaccines. We heard from the deputy auditor general on how those vaccines were obtained. They were distributed across the country and lives were saved. Again, thank you very much to the procurement team.

I think it's fair to say that a general common thread in most of the recommendations we are hearing from the procurement ombudsman and the AG when it comes to PSPC is for you to play a greater oversight role in contracting by client departments. This is something that I believe your department accepts. We have heard testimony that you are doing so.

Generally speaking, delegating authorities to other departments and public servants is meant to make the process more efficient and reduce bottlenecks. We did hear from the Auditor General yesterday that she was especially concerned about access by smaller suppliers. We can think of indigenous suppliers to a system that may become over-regulated. Obviously, though, there needs to be accountability.

I wonder if you can speak a bit from your perspective to find the balance between oversight and efficiency, as both are obviously very important.

[Arianne Reza]

Thank you very much for the question. I think it's a super-relevant question.

I've been working at PSPC since 2016, and all through 2017 and 2018 we focused on how to simplify procurement. We came to OGGO and were able to be witnesses, and we were able to take some great recommendations that were put forward by OGGO in terms of how to unbundle the federal procurement system to make it more accessible to Canadian SMEs.

Canada has a huge portion of its economy based on SMEs. We've spent the last five years looking at supplier diversity, at making sure that our procurement practices are inclusive and at working to figure out how to reduce barriers and how to make it less burdensome. You've probably heard ad nauseam about the e-procurement system, but imagine that every time you wanted to compete, you had to fill in paperwork and you had to show your certification and your ISO standards, which must be complete. Every time you miss putting in that certification, you're screened out. At least by having the e-procurement system, we're hoping that it will be a level playing field for SMEs to have quicker and easier access.

At the same time, I think we are struggling, based on what we've seen here as well. Do we have the right strategy to unbundle procurement? Where are we introducing risk? Where are we introducing complexity? How do we take all those considerations and create the balance to be able to deliver services?

We've heard a lot of different reports from the AG cited or spoken about recently. One that I was reviewing last night was the recent one on IT projects, and I think it's the one that was just referred to. In that context, the fundamental issue for the Government of Canada is that most of our systems are decades old. They were built in-house, not paper-based, and they have reliances. How do we move to a digital transformation to be able to deliver services to Canadians, and how do we see SMEs as part of that? These are the areas we are grappling with.

While I still have the floor, what I would also raise to the table's attention is that I believe that procurement is one spoke. The other spokes are the government's HR practices and staffing practices that should allow us to bring in people quickly with the right skill sets.

Fundamentally, as a deputy head, I really focus my attention on project management. I think that's a key piece of the equation that we need to talk about as a key part of the financial delegation. We need to talk about how the money is being spent and how things are being planned for, so that when we do procurement processes, they're actually meeting the timelines and they're properly planned, and that if you're buying something, you're not increasing through amendments the contract value exponentially.

I'll pause here. Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much. That is the time for Ms. Shanahan.

Mr. Lemire now has two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

My question is for Ms. Reza or Ms. Poulin.

At this point, should the policy and regulations for awarding contracts that benefit first nations be reviewed? Does the Dalian situation call into question contracts awarded to first nations? Is this a unique situation, or does it affect other areas?

[Arianne Reza]

Mr. Laporte can comment.

[Dominic Laporte]

Our department sees the newspaper reports and the impact of the situation. However, we must also acknowledge that this isn't our main responsibility. That responsibility falls to Indigenous Services Canada, and we're in contact with the organization. I think that the organization is keen to resolve the situation and is quite seized with the issue.

These changes can't be rushed, either. We must be careful. An unfortunate incident occurred and made headlines. However, our department isn't in charge of updating listing policies. We strive to ensure that all our government contracts incorporate the largest possible indigenous component. The department is quite proactive in this area. However, the directory isn't our responsibility.

That said, I know that our department and Indigenous Services Canada are quite seized with the issue right now.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

It's quite fascinating. If the goal is to give contracts to indigenous companies and non‑indigenous companies end up doing the work, the goal isn't being achieved.

I have a question about Canada Border Services Agency. Reading between the lines, CBSA may have insisted on excluding other suppliers. Where can we get more information on this? Have your internal investigations revealed any criminal activity at this stage that could be brought to the committee's attention?

[Catherine Poulin]

As I said earlier, we received reports from three organizations over the past few months. We received reports from Canada Border Services Agency, observations from the Auditor General and the report from the procurement ombudsman.

We look carefully at all the information brought to our attention. We also check for connections with other information that we may have within the department. The process is really to validate the allegations, see whether any other information supports them, and then carry out a comprehensive analysis of that information. Once we conclude that criminal activity may have taken place, we turn the case over to the Royal Canadian Mounted Police.

That said, we're concerned about the allegations brought to our attention regarding the supplier's work on its own statement of work. We may have shared our concerns in this area with the Royal Canadian Mounted Police a bit earlier than usual. Right now—

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Can you share your concerns with the committee as well?

[The Chair, Conservative, John Williamson]

Sorry, Mr. Lemire, your time is up.

Next up, we have Ms. Idlout again. You have the floor for two and a half minutes, please.

[Lori Idlout, NDP, Nunavut, NU]

Qujannamiik.

I'm not entirely convinced by the deputy minister's responses regarding the uniqueness of what happened in COVID-19. There have been other world epidemics and pandemics, most recently SARS and H1N1. I think there have been recommendations that must not have been implemented to allow for such drastic failures by this Liberal government on ArriveCAN.

Second, I want to mention the continual failure of this Liberal government regarding indigenous peoples in terms of contracting as well, because, as I said earlier, the Nutrition North program is a major failure. It's supposed to help alleviate poverty, but the way that it's contracted out is another indication of whether meeting indigenous peoples' needs is actually at the forefront of this Liberal government. I point very easily to the fact that Nutrition North is supposed to alleviate poverty, but the North West Company has profited by $119 million in one quarter, and in that same one quarter, they've received a $61-million subsidy from the federal government.

I'll ask the Auditor General what policies and procedures are needed to strengthen contracting procedures, especially when it's supposed to alleviate things like poverty among indigenous peoples.

[Andrew Hayes]

Thank you for the question.

Just before I dig into that answer, I would signal that the member's point about the pandemic and previous experiences like SARS is indeed a matter that we raised in our pandemic preparedness report. We said that there were long-standing known issues that should have been dealt with long before this pandemic presented itself, and we hope the government has learned from those lessons.

In terms of policies for procurement to make sure that there is good service for indigenous people and for the Nutrition North program, what I would say is that this matter comes down to the departments responsible for those procurements in making sure that the requirements and services that are needed are clearly articulated in the contract documents, whether they be in the request for proposal or the ultimate contracts that are signed with those organizations.

Again, tying this to our ArriveCAN work, this is exactly why we made the recommendations that deliverables and costs be captured in documentation and included in the contracts.

[The Chair, Conservative, John Williamson]

Thank you very much. That is the time.

We turning now to Mr. Genuis, who is our second-last questioner. Then we have Ms. Shanahan, and that should be a wrap.

Mr. Genuis, you have the floor for five minutes.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Chair.

There are so many different parts to this arrive scam scandal.

One of them is the fundamental fact that was revealed by the Auditor General's report, which is that the process was rigged: People who had been predestined by the government to get a contract sat down with government officials to determine the terms of the request for proposals, which they would then bid on. It's a rigging of the process, a predestining of the process.

We believe in free will, not predestination. We think that everyone has an opportunity, based on their decisions and actions, to access government contracting if the system is working properly, but it's no wonder that with this kind of system, outsourcing has increased 60% under these Liberals with deals that are rigged.

My first question is for Ms. Reza. Have those involved in this arrive scam rigging been identified and held accountable?

[Arianne Reza]

As we have both indicated, we have referred the matter to the RCMP.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Have you identified which individuals were involved in this discussion on the government side?

[Arianne Reza]

Catherine, would you respond?

[Catherine Poulin]

Some information provided concerns suppliers, and other information relates to employees. We're currently analyzing whether the employees acted within the scope of their regular duties, or whether they deviated from the expectations set for them. This analysis is ongoing, and as soon as we have more—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

I'm sorry. You're saying that you're doing work to identify whether or not there was a problem. The Auditor General's report was very clear on this.

Maybe I'll just go to Mr. Hayes.

In the process of your work, were you able to identify the individuals who were responsible for this bid rigging? As well, are you aware of other instances of this practice occurring across government?