Evidence of meeting #52 for Government Operations and Estimates in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was agreements.
A recording is available from Parliament.
4:35 p.m.
Conservative
The Vice-Chair Conservative Daryl Kramp
He mentioned that it is possible, but it would be theoretically very, very impractical.
Yes.
4:35 p.m.
Bloc
Diane Bourgeois Bloc Terrebonne—Blainville, QC
Mr. Chairman, can we ask the witnesses whether they would be available to come back, since they haven't answered all our questions? This time, since we have a lot of questions left, we could devote the two hours to them, if that's possible.
4:35 p.m.
Conservative
The Vice-Chair Conservative Daryl Kramp
Might I suggest, Madame Bourgeois, that should this committee have the wish to bring them back, then certainly we can give instruction to the clerk. And we would definitely entertain that possibility should it be a decision of the committee.
4:35 p.m.
Bloc
Diane Bourgeois Bloc Terrebonne—Blainville, QC
Do I have to introduce a motion? No? Could we set a date among ourselves? Thank you.
4:35 p.m.
Conservative
The Vice-Chair Conservative Daryl Kramp
Once again, thank you very, very kindly.
We will suspend for a minute or two while we welcome our new delegation.
4:40 p.m.
Conservative
The Vice-Chair Conservative Daryl Kramp
We'll call this part of the session to order.
We'd like to welcome the delegation from the Canadian International Trade Tribunal. We have Elaine Feldman, the vice-chair; Randy Heggart, the director of procurement review; and Reagan Walker, general counsel.
Welcome, and we apologize in advance for the brief time we have to spend with you today. But of course, depending on your presentations and the purview of the members here, we'll see how we progress with this meeting. I hope we'll reach a satisfactory assessment of what you have to offer today without another meeting, but let's just play that one by ear.
Without further ado, the floor's open to you.
May 17th, 2007 / 4:40 p.m.
Elaine Feldman Vice-Chair, Canadian International Trade Tribunal
Thank you very much, Mr. Chairman.
Thank you for the invitation to appear before the committee.
My name's Elaine Feldman, and as you said, I'm the vice-chair of the Canadian International Trade Tribunal. On my left is Reagan Walker, who is the tribunal's general counsel; and on my right, Randy Heggart, who's the director of procurement review at the tribunal.
Let me start today by giving you a brief overview of our mandate.
The tribunal's an administrative tribunal, operating within Canada's trade remedies system. We are an independent, quasi-judicial body that carries out its statutory responsibilities in an autonomous and impartial manner and reports annually to Parliament through the Minister of Finance.
The tribunal hears cases on dumped and subsidized imports, safeguard complaints, and appeals from customs and excise tax rulings. When requested by the federal government, the tribunal also provides advice on other economic, trade, and tariff matters. The tribunal also hears complaints about federal government procurement. I'm appearing today to discuss that aspect of our mandate with you.
Bid challenge began in Canada on January 1, 1989, with the coming into force of the Canada-U.S. Free Trade Agreement. At that time, it was handled by the Procurement Review Board. The United States has had a similar mechanism in place since the 1930s.
The bid challenge portions of the North American Free Trade Agreement, the Agreement on Internal Trade, what we call the AIT, and the World Trade Organization Agreement on Government Procurement, the AGP, came into force on January 1, 1994, July 1, 1995, and January 1, 1996, respectively. The government mandated the tribunal as its reviewing body for bid challenges under these agreements.
I have provided to the committee a briefing document on the provisions and coverage of the three trade agreements, and now I will provide a quick summary of the key objectives and provisions of these agreements.
Generally stated, the objective of procurement review in Canada is to ensure that procurements covered by the trade agreements are conducted in an open, fair, and transparent manner, and, whenever possible, in a way that maximizes competition.
As a party to NAFTA and the AGP, Canada has agreed to provide suppliers from the other countries that are parties to this agreement with an equal opportunity to compete with Canadian suppliers for contracts involving specified classes of goods and services, including construction services bought by certain government departments, agencies, and enterprises, such as crown corporations.
The signatory countries have reciprocated by opening up their government procurement opportunities to Canadian business. These agreements guarantee national treatment and non-discrimination for goods and services originating in Canada, as well as to the suppliers of such goods and services.
Some notable exceptions to the coverage of these agreements are communication services, transportation and relocation services, shipbuilding and repair, and goods and services related to military operations, such as armaments and vehicles. The agreements also allow exemptions for reasons of national security and for small and minority businesses.
As a party to the AIT, the federal government has agreed to provide all Canadian suppliers with equal access to procurement opportunities involving most goods and services, including construction services, in the government departments and agencies and crown corporations listed in the AIT.
The AIT prohibits the federal government from discriminating against goods or services of a particular province or region and the suppliers of such goods or services and those of any other province or region. The AIT imposes constraints on procurement procedures aimed at promoting equal access to procurement for all Canadian suppliers.
Although most federal government procurements with a value of over $25,000 are covered by the AIT, notable exceptions are advertising and public relations services, health services, and social services.
The AIT contains exemptions for national security, for measures with respect to aboriginal peoples, and for measures that are part of a general framework of regional economic development. The AIT also allows preferences for Canadian goods and suppliers and for Canadian value added, as long as those are consistent with Canada’s international obligations.
I would now like to talk briefly about how the procurement review process is carried out at the tribunal.
Suppliers may challenge federal government procurement decisions that they believe have not been made in accordance with the requirements of NAFTA, the AIT, or the AGP.
Potential suppliers who believe they have been unfairly treated during the solicitation or evaluation of bids or in the awarding of contracts on a designated procurement may lodge a formal complaint with the tribunal.
A potential supplier is encouraged to attempt to resolve the issue first with the government institution responsible for the procurement.
If this process is not successful or a supplier wishes to deal directly with the tribunal, the supplier may ask the tribunal to consider the case by filing a complaint.
When the tribunal receives a complaint, it reviews the submissions against certain criteria. If the tribunal decides to conduct an inquiry, the government institution is sent a formal notification and a copy of the complaint itself. An official notice of the complaint is also published in MERX and in the Canada Gazette.
If the contract in question has not been awarded, the tribunal may order the government institution to postpone awarding it pending the disposition of the complaint.
After receipt of its copy of the complaint, the government institution responsible for the procurement files a response. The complainant and any intervenor are sent a copy of the response and then have the opportunity to submit comments. Any comments are forwarded to the government institution and other parties to the inquiry.
Once this phase of the inquiry is completed, the tribunal reviews the information on the record so far and decides whether a public hearing is necessary or whether the case can be decided on the basis of the information on the record. Generally, cases are decided without a public hearing.
The tribunal then determines whether the complaint is valid. If the complaint is found to be valid, the tribunal may make recommendations to the government institution, such as to re-tender, to re-evaluate, or to provide compensation.
The government institution, as well as all other parties and interested persons, is notified of the tribunal’s decision.
Recommendations made by the tribunal in its determination are by statute to be implemented to the greatest extent possible.
The tribunal will ordinarily award reasonable costs to the complainant or the government institution, depending upon which one is successful the case.
In the last five years, the tribunal has received 330 procurement complaints. Consider that during the same time period there were more than 100,000 contracts for goods and services above $25,000 issued by Public Works and Government Services Canada alone. Although the complaints represent only a small percentage of the procurements performed by the federal government, their small numbers belie a significant impact on the integrity of government procurement through the disciplinary and instructional effects of complaints found valid.
Of those 330 complaints, 315, or more than 95%, were filed by Canadian suppliers. As you can see, the procurement review mechanism at the tribunal has primarily become a vehicle for Canadian business to address its concerns with the way some government procurements have been conducted.
With 18 years of procurement review experience in Canada behind us, it is important to emphasize some key lessons.
Truly competitive procurement processes require open bidding, clear procedures, and transparent criteria for selection.
Such a process enhances the integrity of the procurement system in Canada, invigorates the delivery of government services, and translates into savings for the taxpayer.
One of the intended purposes of the Federal Accountability Act is to ensure that the bidding process for government contracts remains fair, open, and transparent. Along the same lines, the Canada-U.S. free trade agreement and its successor, NAFTA, required that Canada adopt and maintain bid challenge procedures for procurement in order to promote fair, open, and impartial procurement procedures. The formal process of procurement review at the tribunal allows Canada to meet these obligations, as well as similar ones under the AIT and the AGP.
Before opening the floor for questions, it is important to set out the areas within which I am able to answer questions. I am speaking today in my capacity as vice-chair of the tribunal. Our mandate is to ensure that federal government procurements respect the obligations set out in our domestic and international trade agreements. I am thus able to answer questions on the provisions of the trade agreements and on the tribunal's procurement review process.
As an adjudicator, however, I am not at liberty to speak to individual cases. Moreover, I must stress that the tribunal administers these provisions of the trade agreements but has no policy responsibility with respect to the trade agreements. I am therefore unable to speak to government policy.
Mr. Chair, I would now be pleased to answer any questions you and your colleagues may have.
4:50 p.m.
Conservative
The Vice-Chair Conservative Daryl Kramp
Thank you very kindly.
We'll simply repeat the earlier round process.
Mr. Simard, you're up.
4:50 p.m.
Liberal
Raymond Simard Liberal Saint Boniface, MB
Thank you very much, Mr. Chair, and I thank the witness for being here this afternoon.
My first question is on the structure of the tribunal: how many members there are, how you are named, the terms. Could you tell us a little bit about that?
4:50 p.m.
Vice-Chair, Canadian International Trade Tribunal
The tribunal may have up to nine members, but we presently have seven. We have a chair, two vice-chairs, and four members. We are governor-in-council appointees. We may serve for a maximum of two terms, and the maximum of each term is five years, so the absolute maximum that any member or vice-chair or chair may serve is 10 years.
4:55 p.m.
Liberal
Raymond Simard Liberal Saint Boniface, MB
Okay.
I'm not sure whether you can answer this; I think you indicated that you can't speak to specific issues. But when talking about some of the things that are outside the agreement, we didn't talk about the bulk sales of water. Can you speak to that at all? I've never understood whether or not it was included in NAFTA. It's not clear.
4:55 p.m.
Vice-Chair, Canadian International Trade Tribunal
That's certainly outside the bounds of—
4:55 p.m.
Liberal
Raymond Simard Liberal Saint Boniface, MB
Okay, I'm sorry. I just thought I'd try to get a clarification.
What are most of the complaints about? You're getting quite a few complaints and you're getting them mostly from Canadian companies. What are the complaints about?
4:55 p.m.
Vice-Chair, Canadian International Trade Tribunal
They cover the waterfront. I have been in my position as vice-chair for about a year and a half and I have seen complaints on everything from the provision of portable toilets to the delivery of Canada's food mail in the north.
4:55 p.m.
Liberal
Raymond Simard Liberal Saint Boniface, MB
But there has to be something that comes forward all the time; there has to be something...or not necessarily.
4:55 p.m.
Vice-Chair, Canadian International Trade Tribunal
Well, the subjects of the procurements vary greatly. The issues relate to whether the procurement has been carried out fairly.
4:55 p.m.
Vice-Chair, Canadian International Trade Tribunal
Our decisions may be appealed to the Federal Court of Appeal.
4:55 p.m.
Vice-Chair, Canadian International Trade Tribunal
They are sometimes appealed, yes.