Government Operations Committee on April 30th, 2013

[The Chair, NDP, Pat Martin]

I wish the minister was here to put that question to.

Who's next? Linda Duncan.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you, Mr. Chair. I'd like to follow up on your questions, Mr. Chair.

The report on plans and priorities says that the department will pursue measures to enhance integrity in procurement. Presumably that includes within the department. So in light of the envoy decision, I did note that in addition to imposing the $30 million cost award against the government, the court also recommended a third investigation arising from that by the department.

So I guess the obvious question is.... That, coupled with the issues that CIDA has run across because of SNC-Lavalin, I did put the question to the government yesterday in the House. It does seem peculiar that there seemed to be some integrity rules for CIDA and different ones for Public Works. My understanding is that the new improved integrity guidelines for procurement only require the department to look at convictions by Canadian courts.

Can you clarify that? Particularly since there are now many foreign bidders, including for P3 contracts, is PWGSC also giving consideration to convictions or allegations of corruption that occurred outside of the country?

[Michelle d'Auray]

Thank you for the question.

You correctly mention our integrity framework. As I indicated in a response to an earlier question, one of our biggest suppliers in terms of alternate service delivery for operations and maintenance is, in fact, SNC-Lavalin. They have voluntarily integrated our integrity framework into their contracts, even though the contracts are still in place. The interdictions or the debarments are based on convictions, and they are convictions in Canadian courts. We have a mandate to oversee the contracts, which we issue under our legislation. We do offer and provide those contractual services to a number of departments and agencies. So those that procure through us are covered by that integrity framework.

With regard to the foreign-based, that is an element that we are looking at today but it is not currently in place. It is with regard to convictions in Canadian courts.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thanks. That is of concern, since as we speak there are P3 contracts being considered that could include foreign entities.

My next question is on advertising. Your reports on spending on advertising are issued at an extremely delayed rate. One of the actions that the government, to their credit, took out of the Gomery Commission was to actually become more transparent and open and to issue reports on spending on advertising, and yet we have to wait. Members of Parliament who are responsible for scrutinizing spending had to wait for two years after the spending.

I'm wondering if you are giving consideration to a rapid expeditiousness of those reports in lieu of the fact that contrary to what the government has been reporting in the House, the spending on advertising is rising, and rising for things such as $20-plus million on the War of 1812, which members of the public are saying they're not particularly excited about.

So I'm wondering if you could speak to what measures on openness and accountability in advertising the department is pursuing under your mandate to improve more expeditious reporting on the actual spending on advertising.

[Michelle d'Auray]

Thank you.

There are two reports on advertising that are put forward. One is put forward by the Treasury Board Secretariat, which is in relation to the central advertising envelope, and then what Public Works produces are the actual expenditures.

We are conscious of the delays, but we are working with the suppliers, because what we need to post are the actual expenditures and we get that information from our agency of record and the various departments. So we have to make sure that what we produce are, in fact, verifiable numbers.

We are working on accelerating that and working with our suppliers to make sure that we can produce those numbers as expeditiously as possible.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Do I have any time?

[The Chair, NDP, Pat Martin]

One minute.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

I have a question about the purchase of Les Terrasses de la Chaudière.

You may be aware that we are actually conducting a review of efforts by the government to invest in improved energy efficiency and the monumental cost savings that can be achieved for taxpayers through that. Did you factor in the costs of improved energy efficiency, and frankly, indoor air quality improvement in Terrasses de la Chaudière, known as “Shoddy Air”, before you made that purchase?

[Michelle d'Auray]

Thank you for the question, and I will defer, if that is possible, to Mr. McBain to answer that question.

[The Chair, NDP, Pat Martin]

That seems only natural.

[John McBain, Assistant Deputy Minister, Real Property Branch, Department of Public Works and Government Services]

Thank you for the question.

First and foremost, the opportunity to purchase was built into the lease contract. It was pre-set at a certain date for a certain amount. So when we were considering it, it wasn't that we were negotiating a price. The price was set in the lease document.

We evaluated the investment that the taxpayer had made through rental payments over the life of the lease and looked at the assessed appraised value of the property, which exceeded $300 million, and concluded that given those factors, the investment of $54 million to purchase the complex was a worthwhile investment for the taxpayer.

Your question about energy efficiency is a sound and a solid one. There is a heating and cooling plant that is located in Les Terrasses de la Chaudière that is part of our consideration we are putting forward under a project, which we have been consulting the industry on, called the energy services acquisition program. So modernizing that plant and bringing efficiency to the complex is already in our consideration.

[The Chair, NDP, Pat Martin]

Thank you, Linda.

Thank you, Mr. McBain.

Peter Braid.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you very much, Mr. Chair.

Thank you to all of our departmental officials for being here today.

Madame d'Auray, welcome. I wanted to start with a question for you. Of course, PWGSC's oversight of procurement is an important part of the department's mandate. You indicated in your opening presentation that one of the department's main priorities is to continue to improve and streamline procurement processes. Could you just update us on your efforts there, please?

[Michelle d'Auray]

Thank you.

We have undertaken a substantial review of a number of categories, for example, of goods and services. We have 31 major categories, and we are going through an extensive review process for each one of them, engaging with industry.

One of the comments we received was that when we pull together supply arrangements or standing offers, they tend to be for a length of time and companies don't have an opportunity to either refresh or update their information, and we don't have an opportunity except when we have to re-compete these on a three-year, or depending on the length of the arrangements. We have worked with companies and various suppliers to ensure that we can, in fact, refresh them on an ongoing basis and have them done on an as-needed requirement. I think this is one of the key areas where we have significantly improved our processes, so that departments and suppliers aren't left with a static set of supply arrangements for suppliers on those lists.

The other aspect I spoke to earlier was industry engagement. I did commit to providing information on how we do that. We have extensive consultations because we want to be part of the business cycle of companies, and we want to be part of the requirements cycle of our client departments and agencies. We have to make sure the supply and the demand are meeting each other's requirements, at an opportune time. We have taken steps on a number of these categories of supply, or of procurement activities, and we are working our way through them. I think we have found, up to now, that has received good input from companies, from suppliers, and from our client departments and agencies.

We've also streamlined a couple of major procurements, where we have looked at, for example, shared travel services. My colleague talked about video conferencing, but we still travel. Therefore, being able to drive the best price and the most effective way of getting at your travel services.... We have been able to obtain the services of a supplier that would allow us to have some very competitive rates. But that was generated as a result of a fairly extensive discussion with our client departments and agencies, to get at what their requirements and essential needs are.

We were able to then engage with suppliers to have a better conversation about what they could provide us in services in a timely fashion.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you very much.

Mr. Lakroni, I suspect this is a financially related question.

I'm looking at page 303 of the main estimates, at the line item for acquisitions. There's been a steady decline for that particular item, from the 2011–12 expenditures of $157 million, down to $152 million, now down to $129 million.

Could you just speak to the reasons behind that?

It's good to see a line item actually decreasing.

[Alex Lakroni]

It's on page 303. There are two factors. There are commitments made under strategic review; that's $3.3 million. There is also the program of Canadian innovation and commercialization that accounts for $22 million. As you know, this program was introduced on a pilot basis and now has been put in budget 2013. So this money has not been spent. It shows a reduction of $22 million. The other reduction or increase is $3.5 million to support the program to supply vaccines to the Government of Canada and other stakeholders.

All these reductions account for $22.2 million.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

So, the CICP shows up somewhere else because it has now been made permanent, based on the recommendation of this committee I might add. Is that correct?

[Michelle d'Auray]

It's an issue of supply and the timing of supply. When we make our request to the Treasury Board, and if it is accepted, then it will be appearing in the supplementary estimates. You will see it in that supply period at that time.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Great. We'll look forward to that.

Finally—

[The Chair, NDP, Pat Martin]

Be very brief, Peter.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

I see a continued investment in the rehabilitation of the Parliament Buildings and the parliamentary precinct. These are very important investments for the government and for Canadians. I can't think of any heritage buildings in the country that are more important than our Parliament Buildings.

Could you very briefly update us on the status of these projects, the complexity of them, and how you managed to bring some of them in under budget and on schedule?

[Michelle d'Auray]

I have the list of projects somewhere in here. They are major. They deal with all of the main buildings of the parliamentary precinct, the East Block and the West Block. We also have the Macdonald building as well.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

The Sir John A.—

[Michelle d'Auray]

Yes, I mean the Sir John A. Macdonald Building and the Wellington Building.

My colleague Pierre-Marc Mongeau has had a very rigorous approach to both the tendering and the project management. As you can imagine, when you are refitting heritage buildings, all kinds of things can be uncovered and found. Some good and some more intricate, if I can put it that way. There is very tight project management. There are very tight controls. There is an ability to reallocate and focus more specifically when we identify issues that arise. Essentially, the projects at this point are all on track. The budgets and the control mechanisms that are followed are quite significant. They're quite tight.

[The Chair, NDP, Pat Martin]

I'm afraid that's all the time we have for that subject. Thank you.

Next, from the NDP, we have Denis Blanchette.