Government Operations Committee on May 7th, 2015

[The Chair, NDP, Pat Martin]

Good morning, ladies and gentlemen. We'll call the meeting to order. Welcome to the 48th meeting of the Standing Committee on Government Operations and Estimates, as we continue our investigation and study into the programs and the activities of the Canadian General Standards Board.

This will be the final meeting at which we're going to be hearing testimony from witnesses, and so it's fitting and timely, I think, that we've invited the Canadian General Standards Board representatives to join us today: Ms. Begonia Lojk, director of the acquisitions branch; and Mr. Desmond Gray, the director general of the acquisitions branch.

We'll invite you, as our witnesses, to make some opening remarks, and then we'll go directly into questioning.

Mr. Gray, you have the floor.

[Desmond Gray, Director General, Acquisitions Branch, PWGSC, Canadian General Standards Board]

Thank you very much, and bonjour.

Today I'm very pleased to once again appear before you to discuss the Canadian General Standards Board and how it engages Canadians in developing standards and providing conformity-assessment services to meet Canada's national interests.

With me is Begonia Lojk, Director of CGSB, an organization within the Acquisitions Branch of Public Works and Government Services Canada.

Given that there are a few new members since our last appearance before this committee in May 2014, I would like to highlight some of the key points made in our first appearance, and give you an update on CGSB activities.

CGSB has been developing standards in support of government purchasing since the 1930s and has been offering certification programs since the 1980s. It is the only federal organization with this mandate, one that supports Canada's federal procurement, health, safety, trade, socio-economic, regulatory, and environmental interests. These standards, which are established through a balanced stakeholder model, set quality, performance, and safety requirements.

Industry can benefit from economies of scale by offering products and services for broader markets that also comply with government requirements. For example, the government purchases $593 million worth of fuel on average every year, based on CGSB standards. These are the same industry standards used for selling fuels to global markets.

In addition, CGSB leverages a network of more than 4,000 Canadian volunteers from across Canada, including tactical experts, consumers, industry representatives, academics, regulators, and others, who contribute their time and expertise to develop standards and participate in certification committees.

Regarding standards development, CGSB manages an open and transparent consensus process that helps ensure that there is a strong Canadian voice in standards development. It is always important to have balanced input from Canadian stakeholders when we harmonize with or adopt international standards.

The Canadian General Standards Board also offers certification services to meet the need for third-party, independent verification to evaluate whether products and services meet specific requirements. These services suppliers to demonstrate their compliance with the quality performance characteristics required by their markets.

Last June, this committee heard from officials in the Department of Fisheries and Oceans who use CGSB-certified companies to source fisheries observers to meet their program and regulatory needs for a stable and sustainable Canadian fishing industry.

CGSB verifies the processes that ensure DFO receives accurate and timely information on the harvesting activities at sea, in the scientific catch and sampling data. The fishing industry and DFO both depend on this information for fisheries management, monitoring and scientific research.

CGSB differs from other standards bodies in Canada in that its primary focus is government interest. This means that CGSB will develop standards and programs in areas in which there is a clear public need. In all cases, CGSB provides services in response to Canadian stakeholder needs.

At our last appearance, you asked specific questions about how standards impact competition, manufacturing costs, etc. In our replies, we explained that standards are inclusive and support innovation through requirements that are performance-based, rather than prescriptive. Standards level the playing field, support innovation and enhance trade.

The CGSB organic agriculture standard, for example, supports a $2.8 billion industry in Canada that includes many small and medium-sized enterprises. These standards are used for certification, for provincial jurisdiction, and for harmonization and equivalence with major trading partners, including the European Union, the U.S.A., and Japan.

Over the past year, CGSB has continued to refocus its services in support of government needs.

Last June this committee heard comments from industry about the CGSB furniture qualification program and its need to be better integrated with procurement services. Discussions are now under way with our PWGSC colleagues in procurement to explore mechanisms to more effectively use the CGSB furniture qualification program to procure furniture for public servants.

This past year, CGSB also introduced GC Standards. GC Standards use a streamlined process that is faster, more flexible, and less costly than the process for traditional standards but are still based on a robust consensus process.

CGSB continues to work in areas that have traditionally supported procurement, such as petroleum, construction, protective clothing, and many others. In fact, many of the standards that CGSB is currently reviewing are referenced in the National Master Specification, which is also used for federal construction projects.

The Canadian General Standards Board is providing Canada's input on a new international standard on sustainable procurement. It also leads the international standards work on non-destructive testing used by industry and which supports the Natural Resources Canada certification program.

This concludes my opening remarks. I want to thank you for the opportunity to provide you with this update. We would be pleased to answer any questions you may have.

Merci.

[The Chair, NDP, Pat Martin]

Thank you very much, Mr. Gray, for that overview of the important work that the General Standards Board does.

We'll begin with questions right away.

For the official opposition, we have Mr. Mathieu Ravignat.

[Mathieu Ravignat, NDP, Pontiac, QC]

Thank you both for being here.

I'll start with a request for some information. Do you use external consultants presently, and if so, can you give us a sense of whether that use has increased or decreased in the last five or ten years? And can you tell me why you use the majority of your external consultants?

Thanks.

[Desmond Gray]

Sure. I will turn to Begonia in a second to assist me in this answer, but I'll give you the knowledge I have to start.

One area in which we have used consultants for some time is auditing. We employ auditors to help us deliver our ISO 9000 and ISO 14000 certification programs.

I was there about 15 or 20 years ago when we did an analysis when we began this program in CGSB. I'll be very frank with you: there has been continuous progress in CGSB to ensure that it is not working in a domain where the private sector should deliver services. So while we recognize the important role we play in the public sector, we also seek to ensure that, where we can, we utilize resources in the private sector, especially because they can be far more cost-effective.

For example, we carry out a series of audits for clients all across Canada, and we have them in the United States and even in other countries. It's far more cost-effective for us to contract with consultants who have the technical expertise, the skills, and the knowledge. We don't then have to employ them on a continual basis. It has been a more cost-effective model for us.

Begonia, would you like to add anything?

[Begonia Lojk, Director, Acquisitions Branch, PWGSC, Canadian General Standards Board]

Des is absolutely right. We do use external consultants, mostly for auditing services.

To answer your other questions, the number has increased over, I would say, the last four years, primarily because our staffing levels have been reduced. Around 2010, we had about 46 people on staff; we're now down to about 33. There are many reasons for that: retirement, attrition and so on; to some extent there were budget cuts as well. But we find that the use of external consultants works very well for us. It gives us flexibility and also reduces the costs for industry, because we will use consultants who are located in the jurisdiction in which the audit is taking place whenever we can.

I'm trying to think whether we use consultants in other areas. We use laboratories to do our testing. They are not consultants, but they are external services.

[Mathieu Ravignat, NDP, Pontiac, QC]

So despite the fact that your budget has been cut—and you point out that this may be a factor in you having let some people go or having reduced your staff—you're having to pick up that labour by hiring external consultants. Is that what I understand?

[Begonia Lojk]

Well, to clarify—

[Desmond Gray]

I think that may be a slight part, but the majority of it was based on sound economics, to be honest with you.

When we did the ISO 9000 and 14000 standards, we evaluated the total cost of doing the work using public servants versus the cost, after we did the audit detail plan, of using privately located and privately contracted consultants. We looked at what the cost benefit to Canada would be. The cost was significantly reduced through the use of consultants.

[Mathieu Ravignat, NDP, Pontiac, QC]

Okay.

I'd like to change subject. I'm concerned, I guess, about how senior managers and executives are assessed in the organization from a performance perspective.

[Desmond Gray]

As you know, there's an annual review process for all executives in the Government of Canada. It's an annual process and it's based on setting clear objectives at the beginning of the year with every executive. These performance appraisals, of course, have to link to the individual business plans of each organization, to the branch, often to the department, and to the government's broad objectives.

[Mathieu Ravignat, NDP, Pontiac, QC]

So it has to do with the basically functioning of the rest of the public service.

[Desmond Gray]

It does, because, of course, it's part of the public service. But the plans are specific for each one. For example, in the case of CGSB, Begonia will have specific key objectives that are unique to her role in this function. These are determined in part through a discussion with me and in part through a discussion with my boss, and we make sure they also align with the broader perspectives of the acquisitions branch, PWGSC, and also with the government's priorities.

[Mathieu Ravignat, NDP, Pontiac, QC]

Has the attrition, the reduction in personnel, been mainly from management?

[Begonia Lojk]

Reduction in personnel has been done completely through attrition. A number of people have retired over the years and we have not backfilled the positions.

On the standards side, we've also put in what I would call efficiencies, because we've improved our processes. We hope to continue to do that.

On the certification side, especially for environmental management systems, we have very few clients. We're basically down to only one or two clients, so we don't really see a future for that business line within government. There's very little interest, so we no longer have an internal person there. He left voluntarily and we simply didn't replace him.

On the quality management side, we use external auditors to supplement our own. We have two internal auditors who go out and do audits.

[The Chair, NDP, Pat Martin]

That concludes your time, Mr. Ravignat.

Thank you, Ms. Lojk.

For the Conservatives, Mr. Chris Warkentin, go ahead for five minutes, please.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you for coming this morning. I'm thankful that you have come because at the last meeting, I was left with more questions than answers.

We did have the Standards Council of Canada before us. Our discussion forced me to question what the board really does and why it is important in this day and age when we see so many other standards organizations really taking the role that the board once really occupied. The fact that many of the standards within the catalogue of the board are outdated or have become duplicative, I think is a concern to people in industry but also to consumers generally. The thing that was most concerning to me was really the impediment for those people starting out, the entrepreneurs who would require standard testing.

At our last meeting, we talked about glass shower doors and the necessity in Canada for dual stamping, whereas that wouldn't need to be done in the United States. You described the board as really being responsible for maintaining the standards for government. My understanding is that if somebody wants to sell in Canada, they still have to have the board's approval if, in fact, there is a standard that is unique to the board.

[Desmond Gray]

It's an excellent question.

I want to clarify. I read the comments that were made and I thought, what exactly is going on? We have no certification program for glass shower doors under CGSB. We do not certify them. It would be the tempered glass. So as far as I understand what's going on, at the very least a lot of manufacturers who want to demonstrate to consumers that they actually meet a CGSB standard choose to put their own sort of publicity piece on it and say, “This meets CGSB Standard XYZ”.

[Chris Warkentin, Conservative, Peace River, AB]

Is there any standard at the board that a private manufacturer with no interest in doing business with the federal government would need to meet to comply with the board that would have duplicative certification?

[Desmond Gray]

I'm going to answer that in a second. I'm sorry but I do want to clarify one thing, and I'm sure you've had this from a number of people who have appeared here. I do agree this is a very complex business. It has many different levels and it touches on many different areas. It's part of my job today to try to be transparent and clear to help answer these questions. As a standards organization—and as you know, there are now eight of them in Canada, and we're one of them—our task is to write standards that meet the needs of somebody. It could be business. It could be government in terms of necessary regulation, or it could be voluntary to fill a gap where there's a need.

We have no authority whatsoever in CGSB to compel anybody to use any of our standards. A lot of our standards, for example, are taken up by a businesses that wants to use those standards to leverage their business, to improve the quality of their process, and to increase their market access by demonstrating they meet a certain level of quality. There is a market component to this. I'll be very frank with you: it's been my experience that often it's small businesses that don't have time to go out and do the investment and the research and development who are the ones who benefit the most from these voluntary standards because they can simply pick them up and apply them to their business model, and suddenly they're getting the intelligence from the bigger organizations.

[Chris Warkentin, Conservative, Peace River, AB]

My concern is, have we created duplication? There are now eight bodies and if the board goes out and seeks to develop the standard.... Really, the world has changed. I don't disagree that the board was necessary. I question now if it's necessary when you have so much of that space being taken up by other organizations that are international in scope.

[Desmond Gray]

I'm going to turn to Begonia, because I know she wants to comment. I'll just say one more thing. I don't want to hog it here. The CSA, the Canadian Standards Association, which is the largest standards organization in Canada, began in the early 1930s along with CGSB. We existed and we worked collaboratively in different areas and largely in the private sector and the public domain. I will tell you that was when CGSB first began and we were called the Canadian Government Specifications Board. Our task then was to write specifications for government procurement, because at that time there was no central procurement entity in the Government of Canada. Every department did its own procurement. We unified the demand and the definition through the documents of CGSB.

As you know, that changed with the establishment of the Department of Supply and Services in the 1960s. Then we became part of the Department of Public Works. The evolution in Canada is very interesting. Canada has evolved a system—and it is quite distinct in the world, in my opinion—whereby we established in 1970 the Standards Council of Canada as an overarching authority. I was just having a chat about this. I'm not that old, but I know people who were around at that time and who were involved in those conversations. One of the reasons the Standards Council was established was to ensure there was no overlap or duplication among the different standards-writing bodies in Canada. We used to have something called subject area recognition, managed by the Standards Council, that would say, “CGSB, you have expertise here. CSA, you have expertise in that area”. All of that was very important to make sure there was no overlap, and I hear you.

Given the introduction of four more new standards bodies, if you're asking me if it is a more complex world, it is, absolutely. The challenge to maintain efficiency in the Canadian system is increased because we're also trying to harmonize Canadian standards with international standards. That's part of the challenge.

I do want to say that Canada has a rationalized system. In the United States they use a very different approach. It's more of an open market approach and you can have multiple standards for the same thing coming out of different organizations. Trying to meet four or five different standards is, in effect, a cost of business.

In 1970 Canada made a decision—again, it's my opinion—to have a rational model so that Canadian businesses and Canadian consumers all had a clear line in terms of that organization and its management. I'll turn it over to Begonia.

[The Chair, NDP, Pat Martin]

We're so over time on this round that you'll have to wait.

[Chris Warkentin, Conservative, Peace River, AB]

We'll get back to that.

[The Chair, NDP, Pat Martin]

Perhaps in the context of other questions you can make the point you wanted to make, Ms. Lojk.

We'll go back to the NDP, to Tarik Brahmi.

You have five minutes, please, Tarik.