Government Operations Committee on Nov. 7th, 2017

[Arianne Reza]

That is an excellent question, because I wanted to show the different points on the continuum where procurement comes into it.

First and foremost, for any procurement, regardless of PSAB, the first place we stop, after trade obligations, is to look at the modern treaties to see what the modern treaty obligation is. As a first order, all procurement is reviewed against it. If the procurement is taking place in a geographic zone where a modern treaty applies, we have to look at that specific agreement. They may have first right of refusal. They may get all the business. They may just want to be part of the solicitation process. That's the first order. Then, other considerations like PSAB, or a general procurement strategy will apply.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Whalen was asking about how we define “first nations”, and the answer was that it is basically self-declaration. I appreciate that may apply to PSAB. Presumably, to receive the procurement benefits under the modern treaties, the bidder would have to have status as a member of that first nation.

[Carolyne Blain, Director General, Strategic Policy, Department of Public Works and Government Services]

Indeed, we would actually work with the claimant groups to be able to identify who the suppliers are within the modern treaty obligations, so we ensure that we have the right list of suppliers to do business with in that particular context.

[Erin Weir, NDP, Regina—Lewvan, SK]

Just going back to my question about the division of INAC, it strikes me that the procurement obligations under the modern treaties might connect to crown-indigenous relations, whereas the broad PSAB program might fit better with indigenous services.

[Sheilagh Murphy]

The modern treaties are certainly negotiated through what might be considered the CIRNA side. Once they are in place, all departments are actually obligated to follow those treaties and implement them. It really isn't necessarily CIRNA overseeing. They will do the broader analysis and review of implementation requirements across those land claim agreements that go beyond just procurement, but in the end, individual departments—including our PSAB side—will have to take on that obligation and make sure we're incorporating it, not only into the approaches of PSAB but into other programs as well.

There certainly is an implementation oversight that happens through maybe the CIRNA side, but we catch these agreements through the procurement strategy and implement them through the strategy.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Madam Shanahan, you have eight minutes, please.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you very much, Chair, and thanks to all the witnesses for being here this morning.

I'm sorry that I missed the earlier meeting. I just want to go back over the goal of the PSAB, just for the record. Could you let me know the last time the strategy was actually reviewed to see if it was meeting those goals?

[Sheilagh Murphy]

The goal of the procurement strategy for aboriginal business is to help indigenous businesses gain experience, bid, and partner with Canada, and to increase the number of contracts that go to indigenous businesses so that they get a larger share of the federal contract offerings. That's the overall goal.

The strategy was put in place in 1996 to help indigenous businesses and federal departments work together to realize a larger footprint of federal contracts within the indigenous community, and the opportunities they present. That remains the objective. We did an evaluation of PSAB in 2014. That evaluation is up on our website if you would like to look at it. It had a number of recommendations, which we have implemented and which we continue to work on. There was an internal evaluation in 2014, and an action plan was developed and is being responded to.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Okay.

There are two things I want to follow up on. The goal of helping aboriginal businesses gain experience is part of that. This idea that the federal government could be a first customer.... Is that a tool that is available—a first customer to a new business? I'm thinking of a new business just starting up.

[Sheilagh Murphy]

It can be. Individual departments are letting these contracts. They need to be out there looking for the opportunity. What we try to do through both PSPC and INAC, both in our PSAB work and in our work more generally, is to try to identify businesses that could benefit from federal contracting, help them get registered, and match them to departments. Departments do that themselves as well.

I don't know if we would say it's a first principle. The goal is to get out there, identify businesses that would like to do business, look for opportunities that are emerging through a contracting offer, and ask if there are businesses out there that we could match and work with. We did that in shipbuilding, as an example, where businesses wouldn't naturally come to this. We proactively worked with Irving and with indigenous businesses and organizations to see what we could do to maximize benefits from that offering. That's how we operate across the program.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

I know you mentioned that it's on the website, and I think that's the motto for so many things. A lot of things are “on the website”, but could you recap for us what is the most important finding you had in doing that 2014 evaluation? I'm thinking along the lines of actually making that operational, because there is a big gap between what we want to do here from Ottawa and what is actually happening on the ground.

[Sheilagh Murphy]

I could quickly recap for you, if you'd like. One of the findings was that the approach we used generally favours larger and more established firms over new and smaller businesses and entrepreneurs, so we need to have the PSAB tailored to the needs of all businesses. We can do that through regional training and more direct work with those businesses.

We've developed a video. We've done more outreach activities. We've done a Canadian Council for Aboriginal Business survey to see what the training needs and gaps are for businesses that inhibit them from participating. As well, we've done pilots to raise awareness of the strategy. That's one action we undertook.

Another one was around our data collection. We don't always have the data that allows for complete analysis on whether we're truly creating and expanding viable businesses, so again we need to look at the way in which we're capturing data on those businesses, to see if we can use other means to get at data. That is going to be part of our modernization: where might we improve data collection and where might we be able to have other sources of information that help us improve PSAB? Those are the things that we are working on and building into our forward plans.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Very good.

My colleague asked about GBA+ analysis. I just want to remind everyone that gender-based analysis is between men and women, of course, but the “+” there means all of those youth and marginalized groups within a community, culturally and so on, and I think there is still a lot of room for analysis there.

I would like to throw out a question for the PSPC folks. Could you talk about how PSAB works operationally in a procurement process? What decisions and what criteria are we using in a set-aside procurement? Would you be involved in that, or is that back to...?

[Carolyne Blain]

Certainly from a procurement perspective, one of the key things is really the early planning. What we do as a common service provider for other government departments is to ensure that we actively engage with those client departments to define early on what those requirements are for the acquisition or the procurement of their goods or services.

One of the aspects that we often find in the context of procurement, in particular with small business enterprises, is potential barriers in how we define our requirements. We want to ensure that we work up front, early on, through the planning and the engagement to define those requirements and ensure the application of either the CLCA, comprehensive land claims agreements, or if that's not applicable in that context, the PSAB.

Then, in regard to how PSAB applies, through competitive approaches nationally, it restricts or sets aside essentially the procurement for the aboriginal groups and the suppliers that are registered through the INAC registry. Once we have that process launched, then we work with the supplier community, of course, through the outreach, to ensure visibility and an understanding of what the procurement is about, early notification, and different types of notification potentially, depending on what the goods or services are that are being procured, so—

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you for that, Madam Blain. I'm running out of time.

[The Chair, Conservative, Tom Lukiwski]

You have 30 seconds.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

I have other questions. Could I submit them in writing, especially around recourse that business owners might have with a decision that goes against them? Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you.

To our witnesses, just to follow up on Madam Shanahan's comments, should there be other questions that committee members have, I assume you would encourage all committee members to get them to you. Reciprocally, if you have any additional information that you think would be of benefit to this committee in our ongoing study, we would encourage you to please make those submissions directly to our clerk.

Thanks to all of you for being here. You have been very informative and extremely helpful.

Colleagues, we will suspend for a few moments while we get our next panel to the table.

[The Chair, Conservative, Tom Lukiwski]

Colleagues, I think we'll resume now.

Thank you to all of our witnesses for being here. We'll get going quickly.

I will introduce our first intervenor, Mr. Marc LeClair, the bilateral coordinator for the Métis National Council.

Mr. LeClair, you have 10 minutes please.

[Marc LeClair, Bilateral Coordinator, Métis National Council]

Thank you, and sorry we're late.

I recommend that you recommend to the Speaker that we get an RFP to get some signage in here so people know where they're going. Every floor, you get up there and there's nothing.

Anyway, thank you for inviting us to appear.

We'll talk a little about PSAB, and what it is and what it isn't. Our biggest concern with the procurement strategy, apart from the lack of informatics and the difficulty in bidding through the existing system, is that we don't think the procurement strategy goes far enough. We've been arguing for Public Works to include new tendering instruments with large procurements.

In the past what we've done.... For example, for non-insured health benefits claims, which primarily benefit first nations, there's an outsourcing of all the back end of the claims processing. In that contract, because it affected first nations, we put in a minimum indigenous requirement of 20% of the contract. All of these claims processors are big U.S. companies. I think we have one Canadian company that does it out of Halifax, so without that minimum indigenous requirement, there would be no benefit to indigenous people.

If we look just across the street here at all the major capital projects we're doing, even on Parliament Hill, there's no minimum indigenous requirement. Contractors are urged to try to set some targets or whatever. We have construction going on the Hill for the next decade. We could create a hundred indigenous masons and support a lot of indigenous companies, but we don't put in a minimum requirement.

My ex-wife manages the West Block building. There are no natives working there because the companies don't have to. We don't put that requirement in there.

Now in the private sector, we're getting the Enbridges; everybody in the oil patch is giving minimum indigenous requirements in the contracts. We don't put that requirement in there.

We have the Supreme Court building coming up. It's a $2-billion build. That's around the corner. We look at 100 Wellington. We thank the Prime Minister for giving us that building. We said we wanted the building, but we also want the construction on that portion of the building. Renovating that building and building the back part right out to Sparks Street is going to be about $100-million build—something like that.

Three weeks ago, Public Works came out with a tender for precinct two—to do all that work at precinct two—for project managers. The project managers are limited. They got this thing so jacked up.... It was first out for a three-week tender, so only the incumbents could win. They expanded that. Then, you have to have your local resources in Ottawa, within a 50-kilometre patch of Ottawa. For Métis, forget it. We're out.

We have done these minimum indigenous requirements in shipbuilding. You might have heard of the success of Membertou First Nation. They were successful because they got minimum indigenous requirements in the shipbuilding and some of the military contracts.

This government has put out a huge build on infrastructure. We should require that these companies have a minium indigenous requirement. That goes beyond just setting aside PSAB. Although, we would say, with 100 Wellington, that build should be set aside just for indigenous contractors. Yes, they'll probably have to enter into JVs, but at least they'll get a piece of the action.

Right now, we have all of this work that's going out there. There's no indigenous requirement. You're not really helping indigenous business. You have to remember about indigenous business that while it's growing, it's not diversified. It's not large enough to participate in these contracts. When we've done all these bundling contracts like we're doing, indigenous people have no chance to get in them.

We run a $65-million construction company. We did Manitoba Hydro. We did a $21-million directly negotiated contract. We created the company. It did another $40 million. It won the bids. Now it has 15 joint ventures with Enbridge for Line 3. That's because we started with a procurement system. We made sure that this time there was going to be something for the indigenous people. We started that, and we built it.

That's really what we need to do. There are lots of things we don't like about PSAB. When it first got going, there were a lot of 51% shell companies that were indigenous in name only. In the United States, they have section 8(a), where the government has a legislative mandate to set aside contracts for minorities, Native Americans, and women.

They have a whole business office in the Department of Commerce. They have a good supplier development system there, where they actually work with minority companies to build their quota, just as I talked about with our experience. We don't have that here. We have a few bureaucrats who you just heard from here. I raised, for example, 100 Wellington with the deputy and with the chief of staff for the minister.

I said, “Why is there no requirement for any indigenous involvement in project management for that precinct?” They said they'd get it fixed. It's four weeks later. Yes, okay.

On PSAB, everything is like.... It's a duck; everything falls off the side of that thing. It's not that it doesn't have potential, but the way it's operated now, it's not focused on the larger stuff. It has no capacity development system. Having a couple of bureaucrats go to some conferences and tell them how easy it is to get procurements.... I'm in that business as a consultant. I've won a dozen; I've bid on fifty. I know how hard it is.

It helps when it's the PSAB system, and we should expand the scope of it, but it's not going to get us to where the really big contracts are: shipbuilding, federal infrastructure, and the like. It extends to services: call centres, tax collectors, employment insurance people, that sort of thing. We need to open up some of that system. We are direct-delivering employment programs. The government of Canada did it for the last 20 years. We've done it better, with better results and at a lower cost. When we look at procurement for all our call centres and service providers, we would be happy to negotiate an effective and rewarding contract for both of us on any of that stuff.

The Métis are primarily western Canadian. We represent the Métis Nation, and we are very proud of that. In two years, we'll celebrate our 200th year since negotiating Manitoba into the Confederation. We are really looking forward to that. We participated in the Canada 150 celebrations. We are very proud Canadians, and we are very entrepreneurial. We are looking for work and for contracts.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We now go to Madam Bertha Rabesca Zoe.

[Bertha Rabesca Zoe, Legal Counsel, Tlicho Government]

He is first.

[The Chair, Conservative, Tom Lukiwski]

You have 10 minutes, Mr. Salter.

[Colin Salter, Legal Counsel, Tlicho Government]

Thank you.

I would like to bring you a perspective of the modern treaty holders. I think a lot of what was said was quite helpful and we agree with. The Tlicho agreement is a modern treaty, protected under section 35, and it includes both self-government and land claims. It's the whole package together.

I had the privilege of sitting at the negotiating table for 10 years to help build that agreement. I had the opportunity to build into the Tlicho treaty what the “economic measures” are that form chapter 26 of that agreement. The way that chapter works is that it really sets out some large objectives. Then it talks about tools, about how you will get there. Fundamentally, I think, for the purposes of PSAB, one of those objectives was that Canada's programs, and also those of the Government of Northwest Territories, should be built to foster Tlicho self-sufficiency. It then goes into specific measures about how that self-sufficiency will be achieved, including following the preferential contracting policies intended to maximize local, indigenous, and other kinds of contracting opportunities.

When I sat at that table, PSAB was brought to us in that negotiation as, look, this is the kind of economic tool that Canada will use to ensure that you have this opportunity to participate in these large economic opportunities. But my experience has been, over the last....

The Tlicho are now, is it, 11 years post effective date?

[Bertha Rabesca Zoe]

Twelve.