Government Operations Committee on Nov. 9th, 2006

[The Chair, Liberal, Diane Marleau]

Thank you very much.

We'll go to Mr. Alghabra, five minutes.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Thank you, Madam Chair.

If you could time me, I want to give the last minute to Mr. Proulx.

Minister, I want to build on what Mr. Nadeau had discussed earlier. We had a representative of small business suppliers come to speak to us; they wrote to us before. They tried to be positive and they had a positive attitude about what could happen next, but I felt, and I think the majority here felt, the gist of their presentation was that they have serious concerns about the direction and the approach of the department.

It would be a shame if we didn't give you the opportunity to respond directly to those concerns, concerns of a lack of consultation, concerns of a shocking pressure to consolidate, concerns of unwillingness to have a discussion with stakeholders. I think those were real. They wrote to us. They came to talk to us about them. I know you said they were happy about some of the issues, but that wasn't everything they said. They have real concerns. So would you please respond to those concerns?

[Michael Fortier]

I totally understand how some of these businesses, not just in this space...but you will notice that a lot of noise with respect to the transformation came from this particular space. These are very small businesses, many of which are based here in the National Capital Region. I put myself in their shoes, and I totally understand that if you've been doing business with the same client for several years, if not decades, and the processes you have followed have worked fine.... For many of them this very important client--it could be your only client--proposes to transform the way it does business, and I totally understand that for some of them this can be very much a concern.

I can't comment on what people said to what people. Mr. Nadeau mentioned earlier the question of mergers. It didn't come from my office. I wouldn't encourage people to merge to do business with us. I've made that clear.

On the lack of consultation, as I said earlier, we have thousands of people who deal with suppliers on a daily basis, and initially these were who the deputy was getting his feedback from. We interact with those folks on a daily basis. The time came for us to take a step back, because we can't be the client and the rule maker and everything and have the right objectivity. Initially, we probably did, but having the Conference Board running this consultation process was a good idea. I believe many of them were reassured by the fact that we did launch this process.

[The Chair, Liberal, Diane Marleau]

Thank you.

Monsieur Proulx, you have two minutes.

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

Merci, madame la présidente.

Mr. Marshall, I'd like to address this question to you, sir. You mentioned, and I think you're right...with regard to the contract for A.T. Kearney, you mentioned $19 million. I think the call was for...was it $15 million? It was $19 million, except that $19 million was for four years. How could you let a company bill the government in one year, or less than one year, $24 million? What was done? What happened?

[David Marshall]

Madam Chair, when the contract was put in place, it was given the scope to take the whole period of what we thought the transformation would require--five years and maybe even a bit longer--so that it didn't restrict us from accessing that resource. At the same time, the contract specifically provided that if we had needed to re-profile it and accelerate work, that was envisaged and authorized to take place. If we look at the general view about what the transformation would cost over five years in the budget of 2005, a provision of about $90 million was made for that period. It was provisionally allocated to take place at about $20 million or $25 million a year over four years.

As we got into it and understood the magnitude of what needed to be done in the early years in order to be able to reap the benefits of transformation--the government, as the minister has pointed out, is a very complex and large organization--we prepared business cases and received Treasury Board approval to spend $76 million of the $90 million in the first two years. That's a signal that showed it was necessary to build up the transformation in the first two years in order to be able to reap the benefits later.

Of course, A.T. Kearney advised us during that period in making a number of changes. To describe a bit about what they did, they had over 60 people, consultants, on our premises through long hours over a six-month period. They brought in experts, including from their European and U.S. operations, without charging us for travel, in order to advise us. What they contributed to us was the very complex analysis of what the government is spending--because the systems are not there to tell us that--in order to be able to analyze how to improve procurement. For $20 billion of spending, 12 million transactions, 51 departments, they built the analysis. They gave us guidelines and helped us consult with specific departments to see what the pattern was in those departments. Then they helped us shape our strategies for 11 major categories of goods and services that covered almost $4 billion of government spending. There was an enormous amount of value obtained.

I should also point out that this kind of transformation work is very hard to undertake with our regular staff, who have, at the same time, every day, to process thousands of transactions.

[The Chair, Liberal, Diane Marleau]

Thank you, sir.

Mr. Warkentin.

[Chris Warkentin, Conservative, Peace River, AB]

Mr. Poilievre has a couple of questions that he'll take first.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Mr. Minister, it must be very frustrating to see people now criticizing and attacking the very things they did themselves. We have seen three examples of this today: the changes in procurement policy were undertaken by the former Liberal government; the agreement with Minto for the leasing and purchase of the JDS Uniphase building in Nepean was accepted in writing by the former Liberal government—we have the written proof, and can show it to any reporter—and the contract with A.T. Kearney was signed by the former Liberal government. Some MPs didn’t say a word when the decisions were made, and now they’re trying to play politics by attacking us and changing their minds.

Do you find it a bit bizarre that MPS who supported these three decisions change their minds six months later?

[Michael Fortier]

Thank you for your question, Mr. Poilievre.

As you know, I am a senator, so my partisan side is less well developed than it is in other people. I try to remain above the melee. I made a few comments to Mr. Proulx a short time earlier, but I didn’t want to point a finger at him any more than at others. Since I have known him, he has always been interested in the balance in real estate between the two sides of the river. I may be wrong, and I know he’ll correct me if I am, but I think this is a newfound interest, that manifests itself much more often since we are in power.

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

Excuse me, Mr. Minister, but you are wrong.

[Michael Fortier]

I reassured him earlier that I knew that in the end, what he wants is for things to improve regarding the Government’s real estate presence on the Quebec side of the Ottawa River.

As for the A.T. Kearney contract, I saw Mr. Proulx throwing his hands in the air when my deputy minister told him we had obtained the services of A.T. Kearney employees who came from overseas without submitting the invoices. It should be remembered that his colleague Mr. Brison signed this $24 million contract without really thinking, as I said, of giving instructions to the consultants. The consultants should have come before the objectives were set. That is how it should have been done. In this regard, I have to deal with what was left to me, Mr. Poilievre, but as you know, I do my best and I try to remain above the mêlée.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

I understand. I gave three examples of decisions concerning which Mr. Proulx did not say anything when he was part of the Liberal government and about which he changed his mind. I’d like to talk about another example.

Has he ever suggested another location for the RCMP? Has he ever suggested a place where they could move, or did he just complain about the decision to move them to Nepean, a decision made by his own government? Did he ever suggest another location to your office?

[Michael Fortier]

I know that Mr. Proulx and others expressed their concerns when this move was considered. You said it, this move was considered long before we came to power. However, I couldn’t tell you if Mr. Proulx made suggestions or not: I don’t know, I have no idea.

[An hon. member]

Do I have any time left?

[The Chair, Liberal, Diane Marleau]

You have no time left, but I'm going to say....

I’ve been Minister of Public Works and Government Services. I can tell you that Mr. Proulx’s interest is not new. I can tell you that he has been talking about it for a long time and so have the others, it’s nothing new. You should be careful Mr. Poilievre. You tend to be quite—

[Michael Fortier]

If you will allow me, Madam Chair, Mr. Proulx and other colleagues from his party tabled several motions between 1993 and 2006 that are similar to motion M-316.

[The Chair, Liberal, Diane Marleau]

I am not in the House, but I can tell you that a lot of interest has been expressed in the issue of the 75%-25% distribution. There may be others, I don’t know, I don’t know who. However, I can tell you that when I was minister, there was lively interest in that issue. It’s not new.

We will go on to Ms. Thibault. We must be fair.

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much.

I would like to make a comment addressed to the committee members. At the start of this legislature, when we met for the first time, Mr. Kramp and I said that the worse thing that can happen to a committee is that the members behave in a too partisan manner. That is a personal comment. We hear witnesses and it must be rather distressing to see that we spend 20 to 25 minutes simply exchanging partisan remarks with them during a two-hour meeting. Obviously, Mr. Poilievre is not a permanent member of this committee.

I wanted to ask you, Mr. Minister, if you are aware of the article that appeared in the Globe and Mail. This isn’t too much of a digression, because in your opening remarks you spoke of the fact that your department has undertaken major reforms. You also spoke of the Shared Travel Services Initiative. I would like you to tell us something about that.

Furthermore, the budget of public servants—members of the armed forces or other public servants—who travel to a new home is also considerable. I was wondering if this was a good opportunity for you to give a few explanations about the article in the Globe and Mail. Are you thinking of doing another call for bids? It is my understanding that the report will be released at the end of the month, but since there have been leaks, will you agree to go to the second, third—?

My third question is the following: how will you make sure this type of thing does not happen again?

[Michael Fortier]

I want to make sure I understood your question properly. You began by talking about travel—

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

In the beginning, you talked about—

[Michael Fortier]

I thought you were referring to the policy on the reimbursement of travel expenses and the policy on employee travel. Then you referred to—

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I began by asking you if you could say a few words about the Shared Travel Services Initiative you referred to in pages eight to ten of your speech, and then about the article in the Globe and Mail.

[Michael Fortier]

Thank you.

With regard to the platform for employee travel, I believe it is important that we have an electronic tool available to the largest possible number of government employees. Obviously, the majority of them do not travel. However, it would be useful if these who are called upon to travel have a tool that would enable them to make airline ticket reservations, if they travel by plane, reservations for an automobile, if they are driving, or reserve a hotel room, using an easily accessible system. The system should also enable them to be reimbursed quickly and efficiently, without having to fill out all sorts of forms that must be submitted to the supervisor. In my opinion, the time it takes for people to be reimbursed, in some cases, is not reasonable. It is the paperwork involved, especially, that bothers me.

As for the travel expenses, I believe I spoke of it earlier to this committee. If not, I will talk about it now. It seems to me that we should insist that employees use the government American Express credit card. We negotiated an agreement with this company further to a call for bids. I find it regrettable that employees reserve vehicles and take out insurance using their own credit cards, when the insurance is already included in the agreement we have with American Express. We’re not talking about billions of dollars!

I’d like to get back to the point Ms. Nash raised a bit earlier. Nineteen thousand dollars, that’s a lot of money. One hundred ninety dollars, that’s a lot of money. Employees are not using government credit cards for all sorts of reasons, and it’s unacceptable. We will have to find a way of ensuring that these men and women do it because, in the end, they are travelling at taxpayers’ expense.

With regard to the leak in the Globe and Mail, you will understand that I have no intention of commenting on a leak from a report that will be made public at the end of the month. It will be my pleasure to come back and talk to you about it, once the report—

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Can we put your name down on the agenda right now?