Government Operations Committee on Feb. 26th, 2009

[Corinne Pohlmann]

We were already planning a meeting.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Well, if I can join in, that would be great, and I'll host you at my office.

Thank you very much, Ms. Pohlmann, for your testimony.

[Corinne Pohlmann]

I'm sorry I have to leave, but thank you.

[The Chair, Liberal, Derek Lee]

Thank you for the social networking initiative. You're on.

And Mr. Anders is going to take the chair for a few minutes.

Go ahead, Ms. Hall Findlay.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you.

I do have a couple of questions for Ms. Miller, but anybody else can fill in, if needed.

You had a comment earlier about the number of contracts or the percentage of contracts that were going to SMEs, and that number was going up, which sounds encouraging. I just want to clarify, because I may have missed it. Were those percentages based on contract monetary value or number of contracts?

[Shereen Miller]

That was based on total value of contracts let by Public Works.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Okay, thank you.

Just to clarify, OSME does nothing in terms of working with foreign governments, with other entities at all?

[Shereen Miller]

Our mandate is to assist small and medium enterprises across the country to do business with the Government of Canada.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you. That was a misunderstanding on my part.

Could you now possibly address some of the concerns that were raised by Monsieur Thivierge and Mr. Lynt about the bundling of contracts and the size of contracts--which I think I heard also from Ms. Pohlmann--being so large now and increasingly large that they become less accessible to SMEs, and the lack of a business case or a business plan for the bundling of some of those contracts to become a very much larger request?

[Shereen Miller]

I have to confess that I'm not here really as an acquisition specialist, so I can't really speak knowledgeably about the acquisitions direction. I believe that Liliane Saint Pierre, who is the ADM for acquisitions, will be before you next week. She's in a much better position to answer things about trends or where procurement is going.

The actual consultation piece has to do with IT procurement and those directions. So I think it's really two separate issues you're asking me about. And the expert for that would be ITSB and the people who have run the consultation. And now that the consultation piece is finished, they're in the process of doing analysis. We weren't prepared to speak to that matter today, so we didn't actually bring in anybody who is an expert in that. If those people appear before you in order to respond to that question, I think you'd get a more fulsome answer.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Okay, that's perfectly fair.

And I have a question for the CABiNET gentleman. There have been, of course, recent charges laid under the Competition Act. We have a list of companies that have been charged. Can you just confirm if any of them are members? I'm just trying to clarify my own information; I'm not suggesting anything. I just want to know if these are members of your organization.

[Jeff Lynt]

Yes. We believe, or we know, that a few of our members were indeed charged. They're members of our association as well other associations, such as ITAC and CATA. That's really all the information I have on that.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you.

Do I still have a little bit of time, Mr. Chair? I'll go back to Public Works and Ms. Miller.

It seems as though there has been a bit of a lack of communication between the CFIB and your organization. CFIB is not, by any means, the only organization representing SMEs. Are there other organizations that you and your department have engaged in communications with and that you send information about these seminars to? Is there a list of these organizations that you do communicate with on a regular basis?

[Shereen Miller]

Thank you for that question.

Yes, there are many, many organizations. We work very closely both with associations and with the chambers of commerce in various areas. As well, there are a lot of different kinds of partnerships, the result of which is, for instance, that some of our seminars are provided in Punjabi and in Mandarin on the west coast. We work in very close partnership with many community groups, many industry groups, and various industry associations.

In fact, that's primarily how we work when we're doing that kind of outreach, but we do many other kinds of outreach. We also have an Internet presence, obviously, with Business Access Canada, which is at contractscanada.gc.ca.

We have industry outreach bulletins. We write articles in various bulletin papers, the newspapers of various associations, and community newspapers. We do our seminars and presentations. We appear at trade shows and various events, along with other departments, frankly, that also have a mandate to help small and medium-sized enterprises. We do it in partnership with them.

We also, from our policy perspective, look at what kinds of barriers other associations identify. If this were more of a dialogue format, we would have been able to confirm, for instance, that CFIB worked very closely with us in the consultations we did last summer with respect to MERX and the government electronic tendering system. They were part of those consultations.

It's interesting that the feedback results from their survey and the feedback from our consultations are diametrically opposed, because we got a lot of support for MERX, for the way MERX works, and for the fact that it's actually free for federal government requests because the federal government pays for that service. If this were more of a dialogue, we would have been able to share, I guess a little bit more fulsomely, with you the way in which we have partnered.

[Martha Hall Findlay, Liberal, Willowdale, ON]

That will be when we all get together.

[Shereen Miller]

We'll do it in your office.

[Martha Hall Findlay, Liberal, Willowdale, ON]

I have another question, then, for the CABiNET gentlemen.

We heard from the CFIB. They have raised what are obviously some very significant concerns about doing business with the government. Your organization clearly has significant concerns about some of the developments within government.

Do you work with the CFIB? Are they aware of your concerns? Have you coordinated any of your input to the government? Could you just speak a little bit to how that might work?

[Jeff Lynt]

Yes. Obviously, we're trying to meet with as many organizations or associations as possible that share common interests with us. Certainly, the words and the message that she gave today were very encouraging. It showed that we do have a lot of similar thoughts. We have met with their organization. As well, we've been reaching out to the organizations that represent the large systems integrators. ITAC is an example. So yes, we are reaching out. We're reaching across to try to get as much dialogue as possible.

The problem is that we're just not getting real consultations with government departments to really change their policies. That's one of the things Ms. Pohlmann talked about. It's the policies that we have issues with.

[Martha Hall Findlay, Liberal, Willowdale, ON]

My other questions were more IT-related, so I think I may be better off waiting until we have different folks.

Thank you very much.

[The Chair, Liberal, Derek Lee]

Madame Bourgeois would be next.

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

It will be Mr. Jean-Yves Roy, for four minutes, and then myself for five.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

Is that all right Mr. Chairman?

[The Chair, Liberal, Derek Lee]

We'll come back to her deficit later.

Monsieur Roy for five minutes.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

Thank you very much, Mr. Chairman.

I see how things are going and I have a very specific question to ask of Mr. McGrath and Mr. Hawkes. I would like to know if you have any data on the value of contracts awarded by Public Works and Government Services over the last few years. My question is very specific. I would like to know if the value of contracts has increased.

I will give you two very specific examples. In fact, you gave us two in your presentation, including that of SNC-Lavalin ProFac. You say that ProFac deals with 3,700 small businesses. In my region, SNC-Lavalin ProFac was awarded the contract for the Sainte-Anne-des-Monts post office. Do you know what the result of that was? The SME that had contracts for the maintenance of federal buildings in the region became sub-contractor to SNC-Lavalin, under conditions that were impossible to meet. SNC-Lavalin squeezed them so hard, and pushed them to the limit to such an extent that the contractor quite simply walked away from the contract because he could not make anything on it.

I will give you another example. In truth, if we really want to prevent small and medium enterprises from being awarded government contracts, there is a simple solution. We need only to bundle the contracts so that they are too big for small- and medium-sized enterprises to have access to them. SNC-Lavalin ProFac is a good example.

Moreover, we have learned that in the furniture manufacturing sector, you went from 34 to 5 providers. Obviously only the big businesses will have access to them.

Is this a means of eliminating the access small businesses have to contracts in order to have the fewest contracts possible to manage?

[Tim McGrath]

Mr. Chair, I'll take the question related to SNC-Lavalin ProFac.

In the situations that you describe.... With the Canada Post building, those buildings aren't part of our inventory, so SNC has their own relationship with Canada Post.

In our situation, what I can tell you is that as part of our contract, SNC has very prescribed measures and very prescribed steps in which they create a roster of companies in order to respond to work that's under $200,000. Anything above $200,000 has to be posted in MERX .

The nature of our industry, of the construction industry, is that it's very much small and medium enterprises. In fact, more than 90% of the companies involved in residential construction have fewer than five employees; 70% of companies involved in what's called commercial real estate have five employees or fewer, so it's just the nature of our industry that it's carried out by small and medium enterprises.