Government Operations Committee on May 26th, 2015

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Thank you, Mr. Chair.

[The Chair, NDP, Pat Martin]

Thank you for being here, Minister.

The meeting is suspended.

[The Chair, NDP, Pat Martin]

Ladies and gentlemen, we will reconvene our meeting. We are examining the main estimates. A new group of witnesses has joined us at the table.

Committee members, we're going to go just until 12:45, because we want to deal with the votes so that we can report the main estimates to the House of Commons, and we also want to very briefly discuss future business for upcoming meetings.

I notice that a few members are out of the room, but I believe, in the interest of time, we should get started.

May I ask who will be making the presentation for Shared Services Canada?

Ms. Forand.

[Liseanne Forand]

We don't have any prepared remarks, Mr. Chairman.

[The Chair, NDP, Pat Martin]

Okay, then we will leave the minister's remarks on the subject to stand as your presentation.

We'll go right into questioning then with Mathieu Ravignat for the official opposition.

[Mathieu Ravignat, NDP, Pontiac, QC]

There's what I would call a considerable amount of confusion within the public service with regard to how Shared Services Canada is going to result in efficiencies for them. What's being done to inform them about the changes that are coming?

I have a follow-up question to that, but we'll start there.

[Liseanne Forand]

The transformation agenda that Shared Services Canada is responsible for really is a Government of Canada transformation agenda that will affect every public servant in terms of how they work, the equipment they have to do their work, and the IT security they can rely on. We consider that engagement with public servants to be very critical both within our own department, in terms of how their workplace and work will change over the next five to seven years, and more broadly with public servants.

Also, we've actually used the opportunity of the clerk's initiative called Blueprint 2020, which sets out a vision for the public service in 2020, to point out that in fact that vision cannot be achieved if we don't do the infrastructure modernization we are doing as part of our agenda.

We've pointed out that for that to be possible, we need better computing capacity and more storage capacity. Our data centre consolidation program will increase storage capacity by seven times, which, as I'm sure you can appreciate, is important in a world of big data. It's also important for public servants to be able to connect with one another more easily and on an ongoing basis.

Our transformation agenda will increase bandwidth, for example, by at least four times, which, as you can probably appreciate, is critical for streaming data, video conferencing, and enabling public servants in the regions to be full participants in the work.

There are a number of areas in which the transformation is really going to improve the workplace for public servants.

[Mathieu Ravignat, NDP, Pontiac, QC]

When I speak to public servants, almost all of them say that what was good about the old system, particularly when it came to email, was that it was responsive to differing needs—I'm sure that's not the first time you've heard that—and that there's a considerable amount of fear with regard to going to shared services, because they're going to lose that kind of flexibility. They're going to lose what they need that is specific to their workplace and specific, even, to their category or job.

What can you tell them to reassure them that this kind of one-size-fits-all system is going to actually allow them to do their job more efficiently?

[Liseanne Forand]

Thank you for that question.

One of the metrics we track within Shared Services Canada is the number of incidents that affect mission-critical IT systems across government. Those are beyond email, but in some departments email is a mission-critical system. We track those numbers all across government on an ongoing basis, and I'm happy to say that, compared to the situation in 2012-13, in 2013-14 we had a 20% improvement in mission-critical incidents. That means there were 20% fewer.

In fact, the way we are consolidating the oversight and management, improving our change management processes, and managing problem resolution is actually improving the service that departments are getting. That's because while some departments were very well served under the old system, for example, a large department like CRA with top-of-the-line and state-of-the-art IT, many departments were not as well served. They were small and they didn't have the bench strength in terms of service capability, restoration of service, and modernization of their equipment.

We're confident that the new consolidated approach on email and in other areas will deliver improved service for public servants across the system.

[Mathieu Ravignat, NDP, Pontiac, QC]

Turning to the delays, are there financial repercussions with regard to the contract between you and Bell with regard to these delays? Are they getting off scot-free?

[Liseanne Forand]

The contract to deliver a single email system is a large contract, and it is quite a complex undertaking. The way the contract is structured, however, we only pay for the email service as users migrate onto the email service. The fact that there have been delays in migration has not had a financial impact on us from that perspective. We do have to keep the legacy systems running. We've consolidated, improved and streamlined our ability to do that. We're able to stay current with our costs that way. So no, there haven't been any impacts from that perspective.

Frankly, we want to make sure, as suggested by your previous question, that the system is absolutely sure and well functioning before we move people onto it. The fact that we don't have to pay until they do enables us to protect our financial interests as well.

[Mathieu Ravignat, NDP, Pontiac, QC]

So you can assure Canadians that it's not like a construction company that finds new costs and then suddenly you're dishing out more taxpayers' money for this contract.

[Liseanne Forand]

I can assure you that we're only paying for what we contracted for. At this point, we're not paying until people move onto the system.

[The Chair, NDP, Pat Martin]

Your time is up, Mr. Ravignat. Thank you very much.

Mr. Greg Kerr from the Conservatives, you have five minutes, please.

[Greg Kerr, Conservative, West Nova, NS]

Thank you very much, Mr. Chair.

Welcome. I want to get back to a topic that was raised earlier, and that's the shipbuilding program itself. Obviously, you don't commit $33 billion to the economy of Canada without having some massive impact.

I noticed that recently, bank economists declared that it would be worth 1.5% growth to the Nova Scotia economy alone in the coming years, year over year. It's a substantial part of that province. I'm also aware that one of the companies that has picked up some of the contracting, separate from this, just committed $50 million to $60 million in P.E.I. It's unrelated to shipbuilding, but because they're there, they wanted to grow into the economy. I also know that a number of small shipbuilding firms have really captured both the atmosphere, I guess you could say, and the opportunity, particularly in Europe in a number of ways with the smaller ships. They're looking forward to the $2 billion that will be spent on maintenance and so on.

I don't know how this will be calculated going forward, but obviously there will be a few glitches, if you want to discuss those. I think the big thing here that we have to talk about is the massive impact this has over a 25- to 30-year span on the economy and the spinoffs. I know a number of small companies. I went to a number of the briefings around the province to have the economic side talk about it. A lot of the small companies that had nothing to do with shipbuilding and nothing to do with engineering realized that if they could get a subcontract, in other words, if they spent the money and invested and geared up, they would be pretty well guaranteed work for a long time, for 20 to 25 years. Many of them said it was incredibly unusual to be able to bid and make that kind of investment in terms of growing the small firms. I noticed that the number is 200 or 300, but whatever the number of companies is, these are spread across the country.

I wonder if you could elaborate on that and talk about some of the impacts that maybe you notice more at the staff level or which you anticipate.

[George Da Pont, Deputy Minister, Department of Public Works and Government Services]

Thank you very much for that question.

As you said and as the minister highlighted, one of the main purposes of the national shipbuilding procurement strategy has been to rebuild the shipping industry. We've seen a great deal of progress on that in the first phase.

Irving Shipbuilding has invested over $300 million to upgrade its facilities. Seaspan on the west coast has done the same thing and has spent about $170 million of its own money. I've had the opportunity in the last couple of months to tour both those facilities and I can tell you that we now have world-class infrastructure in place that's going to be ready and capable of proceeding with the build contracts.

I think as the committee's well aware, the contract's been let for the building of the Arctic offshore patrol vessel. I'll use that as an example to highlight what the minister said. That's a large project and it will create spinoff benefits for companies throughout Canada, and not just in Irving Shipbuilding, because a lot of the value, a big part of the expense, is not so much building the vessel itself, but everything that goes onto the vessel: the navigation systems, the sonar systems, and so forth.

As part of the national shipbuilding procurement strategy, when contracts are being let, a great deal of emphasis is being put on value propositions and ensuring that there's ample opportunity and benefits to Canadian industry from that.

We're seeing that beginning obviously with the AOPS. As the minister said, we anticipate being in a position in June to see the start of the offshore fisheries science vessel for the coast guard, and we've started the very early stages of a process that will lead ultimately to a request for proposal for the Canadian surface combatant.

These projects are now at the takeoff stage, under way, and they will generate significant spinoff benefits throughout the country for all kinds of firms.

[The Chair, NDP, Pat Martin]

For the NDP, we have Mr. Tarik Brahmi.

[Tarik Brahmi, NDP, Saint-Jean, QC]

Thank you, Mr. Chair.

I would like to go back to what the minister explained to us earlier. The logic has been reversed with the new military procurement process. This process allows for a reduction in the time between when a call for tenders is issued to the industry, and the moment when the industry may submit bids. However, it does take some time before such a bid can be put together.

I will take Irving Shipbuilding as an example. Let's imagine that a company manufactures propellers in Saint-Jean-sur-Richelieu and wants to bid on a project. How did you change the old method so as to allow businesses to have access to these new projects? For instance, Service Marine Canada in Saint-Jean-sur-Richelieu told me that it could not bid on these calls for tenders because it is like a private club. The smaller businesses become the subcontractors of these large businesses that contract out orders. It is a private club.

How have you changed the way things are done to give smaller businesses access to these calls for tenders?

[George Da Pont]

Thank you for that excellent question.

As the minister said, before you actually get into a contract, we have reversed the process. She said that before we would have put out a request for proposal, gone through a fair bit of the long tortuous process, and found out only at that point what industry capability was. Often we had examples where it led to situations where the capability, what the government was looking to procure, didn't fit the budget. It led to a number of failed procurements.

By doing the industry engagement up front, and there's been extensive industry engagement, and I'll use again the Arctic offshore patrol vessel as an example. By doing that up front, it leads to a far more realistic request for proposal that actually aligns with what industry capability is, reflects industry advice, and ensures that we end up with capability on budget.

On your issue of the subcontractors, one of the main features of the policy is that everything will be competed. There may be some aspects where for a particular reason there's only one possible manufacturer, but the philosophy of the national shipbuilding strategy is that when you proceed and you get into the subcontracts, all of them will be competitive processes unless there is a very overpowering reason not to do that.

The other thing—

[Tarik Brahmi, NDP, Saint-Jean, QC]

I understand that and I understand the philosophy.

However, how does the department make sure that there is a transparent process that will allow all of the Canadian small and medium businesses to propose their services, when it deals with a large subcontractor like Irving? The SMEs have the production capacity, the technology or the necessary knowledge. What mechanisms are now in place which were not there before? What are the new mechanisms to ensure that the large company will respect that? Has there been some kind of change in methodology?

[George Da Pont]

I think the main thing in proceeding with the shipbuilding strategy is it's the government that's going to continue to set the rules. It's the government that's going to continue to set the framework within which contracts will be let. As I've indicated, the philosophy is that subcontracts will be competitive. They'll be publicized. There will be transparent processes around bidding. That is built into the process.

We are also looking at mechanisms for better industry engagement, as I mentioned, throughout the process so there will be more information available to companies, particularly small companies, of when things will be coming up that they might be able to bid on and what the contract will be looking for. The idea is more information up front, giving people more information about when a particular item that they might be interested in bidding on is likely to come up, continuing with transparency, and continuing with industry engagement and the philosophy of competitive processes.

[The Chair, NDP, Pat Martin]

Thank you, Mr. Da Pont.

Mr. Brahmi, you're well over time. Thank you very much.

The Conservatives are up next.

Mr. Warkentin, you have five minutes.

[Chris Warkentin, Conservative, Peace River, AB]

Thanks so much for being here. We appreciate any time that we have the opportunity to have officials before us so that we can grill them. I'm going to continue that process this morning.

We noticed from the estimates that the budget for accommodation of real property services has increased for this coming year. It looks like the accommodation of real property services has increased its budget by $209 million. Can you explain to me what that is for? What's included in that increase?

[George Da Pont]

Part of that is, in essence, a little bit of a bookkeeping issue that I'm not even going to try to explain. I'll ask our chief financial officer to take you through that.

[Chris Warkentin, Conservative, Peace River, AB]

Absolutely, thank you.