Government Operations Committee on May 27th, 2008

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

Let me give you a concrete example. As an MP, I have met with engineering companies that had mandates for water purification in the past. In my region, the centre of excellence for water purification includes a school and has vast expertise in building water purification systems. They are specialized in urban engineering. Contracts were being awarded for detention centres. The engineering services normally had access to them and they were able to bid. For the past few years, they have seen their access to such contracts dwindling, be it for maintenance or for consultancy services. All the contracts are drafted in a way that excludes them. Moreover, the ones who currently get the contracts are the big engineering companies in urban centres or other parts of Canada. I have seen a tendency to draft contracts so as to favour their awarding to suppliers. Nothing says that these are single suppliers, but the contracts are drafted in a way that excludes small companies.

In such cases, can they come to see you? Will they be limited by financial considerations? In some cases, as my colleague Mr. Angus mentioned, the construction contracts are large.

[Shahid Minto]

Certainly in the last few years the Department of Public Works has shifted its business model from having hundreds and hundreds of standing offers to having either regional master standing offers or national standing offers for repetitive types of business--buying desks, light bulbs--and that's been a shift.

There's a policy issue here of whether that shift should happen or not. That's a separate thing. Our thing is whether at the time they issued these standing offers they did it in an open, fair, and transparent manner and whether the terms of these standing offers properly are enforced as they go through.

As a result of that, there has been significant market adjustment, I have no question. But the people who locally supply printers or other things are finding that some adjustments have to be made to the market.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

In some cases, when contracts are awarded, we see that we get can better prices in the regions. Nevertheless, contracts are awarded for the higher prices.

Besides, the contracts stipulate that the provider must be able to provide the human resources in order to carry out the contract. In many cases, the supplier to whom the contract was awarded does not have the resources he needs to carry out the contract. Those suppliers who are discriminated against by this sine qua non condition imposed on granting contracts have no other choice than to complain to the Canadian Trade Tribunal, which is very expensive. You could perhaps look into this aspect of the contracts. Some provisions effectively exclude small companies. One of the contract's provisions clearly indicates that the supplier commits to providing the resources needed to do the work and that he has said resources. But in fact, this is not true. What can he do in such a situation?

[Shahid Minto]

There are two issues.

I'm surprised about the concern as to how much it costs to go to CITT. My understanding was you didn't even need a lawyer to go to CITT, but you could talk to them about their processes.

On the second issue, I understand fully that SMEs have a problem when the breadth of a requirement is so large. These are small businesses who can't meet $50 million requirements. I understand that. The second thing I understand is that when it says you have to supply goods all across Canada and you have only established in one little office some place, you have an office in Gatineau here and you have to supply something to Winnipeg, you have a problem with an SME, and if it's a.... My understanding is that the department has taken some action to rectify those things. My understanding is that the department is finding ways to do some vertical slices so that you don't have to bid on the whole requirement but parts of the requirement. But that's an understanding based on what I hear. We have not verified that.

The last issue you raised was really important. You said that if there's a mandatory requirement that the contractor must have the manpower and he doesn't have the manpower but he gets the contract, well, I'm sorry, the evaluation was not done properly. Please come and talk to us. Clearly, if it's a mandatory requirement, it has to be met before the contract can be awarded. What does happen is that your understanding or somebody's understanding of that mandatory requirement may be that he has to have employees rather than access to subcontractors. There are technical things that are involved here. It's not that straightforward usually.

[The Chair, Liberal, Diane Marleau]

Thank you.

Ms. Bourgeois, there was a question you wanted to ask before the end of the meeting.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

I would like to raise two issues and make a brief comment.

Mr. Minto, is choosing typically Canadian businesses important for you? There are many American companies that have subsidiaries that they call Canadian, here in Canada. Are you going to ensure that contracts are granted, to the greatest extent possible, to Canadian businesses?

Second, do you speak French? A little?

Finally, I would like to wish you good luck in your position. I think that you will need it.

[Shahid Minto]

I understand you very well, I am bilingual.

It's just that if you want to have a spontaneous conversation, I have to go back to the language I have the facility to have a spontaneous conversation in.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

I understand. I just wanted to make sure.

[Shahid Minto]

Let me come back to the issue.

Our purpose in life, really, is to help people get their business, to help them solve their issues over here. We are not here to ensure that any particular person gets a contract. We are here to ensure that the contracts are awarded in a fair, open, and transparent manner.

My constituents, the people who can complain to me, are all Canadian suppliers. The act says that. It's defined in a way that American suppliers cannot come and complain to me. You must have a place of business in Canada to come to the procurement office.

The second issue, and this is important also, is that we are a trading nation. These are policy issues, but we are a trading nation. We have to give access to our trading partners through our contracts if we are going to get access to their market. Those are considerations people have looked at: is the market out there 15 times bigger than ours? I'm not passing judgment on that, but I'm saying those are part of the judgments and information people deal with when you're saying “only Canadian”. If you're going to give contracts to only Canadians, fine, but then they'll give contracts to only Americans.

I don't have a view on it, but I simply make that comment as a concerned citizen.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

I wanted to raise that issue because, all prices being equal, Canadian products are just as good as the products of American subsidiaries. Take for example the famous water heaters that were installed in the National Defence buildings. There was a similar case where an American subsidiary was chosen over a Canadian company. I think that we have to play a protective role, if you will. I just wanted to ensure that you think this is an important issue and that you can make that recommendation.

[Shahid Minto]

The honest answer is that I could not recommend a policy matter. I can recommend how to implement a policy and how to better implement a policy, but the foundation of the policy is somebody else's responsibility.

[The Chair, Liberal, Diane Marleau]

Thank you, Mr. Minto. Thank you for coming before us. We wish you well in your job, and hopefully you can help a lot of small contractors and keep the peace among them all.

[Shahid Minto]

Thank you.

[The Chair, Liberal, Diane Marleau]

Before we close the meeting, I just want to remind the committee that we will be receiving members from the CITT on Thursday.

After today sometime, our researchers will be sending around a draft report on passport services. I'd like you to have a look at that, because on the following Tuesday we will look at that draft report.

The following Thursday we will be having before us the Departments of National Defence and Public Works and Government Services with regard to procurement.

Thank you. The meeting is adjourned.