Evidence of meeting #112 for Government Operations and Estimates in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was business.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Louis-Martin Parent  Director, President's Office, Canadian Federation of Independent Business
Pierre-Yves Boivin  Vice-President, Strategy and Economic Affairs, Fédération des chambres de commerce du Québec
Iain Christie  Executive Vice-President, Aerospace Industries Association of Canada
Yvon Boudreau  Consultant, Fédération des chambres de commerce du Québec
Jim Quick  President and Chief Executive Officer, Aerospace Industries Association of Canada

12:35 p.m.

Conservative

The Chair Conservative Tom Lukiwski

Thank you very much.

We'll have to wait for Monsieur Parent, perhaps, to respond to Monsieur Drouin's line of questioning.

12:35 p.m.

Liberal

Francis Drouin Liberal Glengarry—Prescott—Russell, ON

Thank you, Mr. Chair, and just let know at three minutes. I will share my time with my good friend Mr. MacKinnon. He wants to speak for three minutes.

Many thanks to the witnesses for being here today.

I want to go back to an issue that Mr. Peterson touched on, vendor performance. How do we evaluate previous vendor performance and how do we weight that in a next procurement? Should we score this? How much weight should it carry in the next procurement cycle? Should it be a pass or a fail?

I'm curious to find out from witnesses, because a lot of the witnesses have told us, yes, vendor performance should be taken into consideration, but then the question is how. That's the tougher question and I'm curious to find out.

I'll start with Mr. Quick and Mr. Christie.

12:35 p.m.

Executive Vice-President, Aerospace Industries Association of Canada

Iain Christie

Again, my experience with this certainly comes directly from living the dream and having worked for different governments and seen what worked and what didn't. You're right. It's a difficult question. I know that Public Services and Procurement Canada is working on it and looking at different models. I wouldn't want to prejudge its efforts.

The features you need to get right are that, if you do it right, and when I have seen it work, the performance management system becomes an incentive not only for the companies but for the project managers inside government to improve their performance. You end up with procurement officers who want to have vendors that are scoring the highest grades. It becomes a mark of pride to them to have good suppliers. They proactively work with suppliers to improve their grades before they get rated.

When we were subject to systems that worked, that's why it worked, because the person on the other side who was buying was as interested in our performance as we were and was constructive in helping us become a better company. When you do that, procurement will get better for everybody. Companies will deliver, they will enjoy that, the government customer will enjoy it, and we'll end up with better companies and a better procurement system. The trick is to use it as a way to encourage everyone to do better, not as some kind of filter where you weed the bad from the good.

12:35 p.m.

Liberal

Francis Drouin Liberal Glengarry—Prescott—Russell, ON

Yes.

Now I’m going to turn to my friends from Quebec.

12:35 p.m.

Consultant, Fédération des chambres de commerce du Québec

Yvon Boudreau

I’ll give you a specific example of something that is already federal practice, in the case of pre-qualification processes.

12:35 p.m.

Liberal

Francis Drouin Liberal Glengarry—Prescott—Russell, ON

Very well.

12:35 p.m.

Consultant, Fédération des chambres de commerce du Québec

Yvon Boudreau

The challenge comes down to assembling a jury that is as qualified, as impartial, and, of course—ethically speaking—as independent as possible. Taking into account the bids received, it is still possible, with a qualified jury, to assess how bidders are likely to perform on the basis of the proposals submitted and to determine which is the most promising. Obviously, as I was saying earlier, government contracts can also take into account a bidder’s past performance.

12:35 p.m.

Liberal

Francis Drouin Liberal Glengarry—Prescott—Russell, ON

That, right there, is the problem. Past performance is not assessed. Actually, an assessment is done; businesses are asked whether they have been in operation for 15 years. It is becoming increasingly difficult for us to defend businesses whose performance fell short in the past but who land another contract. Business owners tell me that the same contracts always go to the same people. I don’t even need to name them; all you have to do is read the news to see which companies I’m talking about. Year after year, the performance of certain IT companies, for instance, is lacking, and I find it very difficult to defend that. I have to answer to my constituents, so I want to make sure that everyone has an equal opportunity and that companies deliver what they are supposed to.

How do we assess that?

12:40 p.m.

Consultant, Fédération des chambres de commerce du Québec

Yvon Boudreau

Our businesses say that it is entirely appropriate—

12:40 p.m.

Conservative

The Chair Conservative Tom Lukiwski

I'll interject just for a moment.

Mr. Drouin, if you want your colleague to have have three minutes, you're at that point right now.

12:40 p.m.

Consultant, Fédération des chambres de commerce du Québec

Yvon Boudreau

It is entirely appropriate to assess performance midway.

12:40 p.m.

Liberal

Francis Drouin Liberal Glengarry—Prescott—Russell, ON

By the way, it’s not the SMEs.

12:40 p.m.

Consultant, Fédération des chambres de commerce du Québec

Yvon Boudreau

No, no. I understand completely.

It’s appropriate to do that, but the criteria need to be known and transparent, and the information should serve a purpose afterwards.

12:40 p.m.

Liberal

Steven MacKinnon Liberal Gatineau, QC

Thank you, Mr. Chair.

Thank you, Mr. Drouin.

Thanks especially to the witnesses for being here today.

As Parliamentary Secretary to the Minister of Public Services and Procurement, I must tell you that we are determined to modernize the procurement process. It’s one of the top priorities set out in the Minister of Public Services and Procurement’s mandate letter. The SME issue is obviously hugely important.

As part of this process, we have reached one or more agreements with various jurisdictions regarding acquisitions related to specific jointly held properties. Most of the agreements are with provinces, but we will soon be extending them to municipal authorities as well as to the health and education sectors.

I’m going to share a little anecdote with you. One province had a concern. One of its manufacturers was worried prior to signing the agreement with the Government of Canada. The province was adamant about doing business with the manufacturer, who turned out to be selling the product to the federal government and, by extension, all of its partners, at a lower price than what it was charging the province.

Unfortunately, Quebec still hasn’t signed the agreement.

Not only does this tool provide value to taxpayers in various jurisdictions—there is only one taxpayer, as we know—but it also affords businesses in those jurisdictions the opportunity to offer their products and services at the national level.

My question is for the representatives of the Fédération des chambres de commerce du Québec. If there is enough time left, the representative from the Canadian Federation of Independent Business can answer as well.

Would you be supportive of federal government efforts to expand the agreement and sign one with the Quebec government? Are you even aware of those efforts?

12:40 p.m.

Consultant, Fédération des chambres de commerce du Québec

Yvon Boudreau

No, not particularly.

Generally speaking, the FCCQ has been an active supporter of agreements on interprovincial trade and other agreements of that nature. We tend to be in favour of anything that has the potential to increase trade. I’m not familiar with the specific draft agreement you’re referring to, but philosophically, we are not opposed to any such movement toward openness.

12:40 p.m.

Conservative

The Chair Conservative Tom Lukiwski

Unfortunately, we're out of time.

We'll now go to our final two five-minute interventions. We'll start with Mr. Shipley.

12:40 p.m.

Conservative

Bev Shipley Conservative Lambton—Kent—Middlesex, ON

Thank you very much.

Mr. Parent, I want to follow up on Erin's comments regarding the regulatory process. When we look at your page 8, there's 71% with “The government's tendering/bidding process”, “No means of determining what the gov't wants”, and “Too much paperwork”. Then another 20%, actually, which I didn't include in that 70%, is the “Inability to contact the actually user/purchaser”. We've had some discussion about that. Mr. Christie brought it up.

Then when you get to your page 10, you mention “Simplicity of forms”, “Clarity of steps necessary to sell to federal gov't”, and “Notification”. Those were the three that you had mentioned.

I'm glad to hear from our witnesses in some respects that things are improving. Quite honestly, I think, as political people, we want to see that. Many of us have been in business. We understand small businesses. They're in our ridings. We talk to them all the time. I think many of us get that.

I think our challenge is that if that's the case—and we've talked about it here—why do you think it is so difficult? That's a policy thing, I guess. The challenge becomes of moving forward in the complexity. Why have they become so complex? Is it for liability? Do you have any ideas?

I want to go to Mr. Parent.

12:45 p.m.

Director, President's Office, Canadian Federation of Independent Business

Louis-Martin Parent

Actually, you touched on it right at the end there. The end-of-mandate report by the procurement ombudsman states it very well.

I think there's a great fear on the government's part of protecting the crown. Iain's colleague, Janet Thorsteinson, is very big on risk and how oftentimes procurement officials are fearful of doing something out of bounds, overly simplifying things, and being too clear, or what have you. It's gotten to the point where they're so careful that it hinders oftentimes clarity and simplicity. I think that's a big reason why it's very hard to simplify things on the back end.

I was talking a lot about e-procurement. Obviously, I believe very much in how important it is, but also a big part of the problem is the modernization of the principles and the rules underneath, which support that e-procurement system. The supplier advisory committee has a subcommittee that deals with risk. It is a big issue. I think that's a strong thing that we're talking about.

12:45 p.m.

Conservative

Bev Shipley Conservative Lambton—Kent—Middlesex, ON

My time is going to run here.

The issue really becomes.... We talk about the liabilities, we talk about the risk, and then we talk about simplifying the process, which seem to be going in opposite directions. I think for us as politicians, out of this, I'm hoping that some of the recommendations that are actually put in place.... We have determined the why, the governments. We know why we're doing these things, but we need some help on how to accomplish them.

I'm interested also in how we get new start-ups the credibility that they need as the more mature ones.... Getting that performance measure in place, is it difficult for a start-up? Is it using a large company because they know somebody? Is it because they can say that it's the quality of their product? I understand the differences between some of the sensitive maybe, aerospace and technology parts and ordering the concrete for a building project or something.

12:45 p.m.

Executive Vice-President, Aerospace Industries Association of Canada

Iain Christie

I have two four-letter words: BCIP and, well, it's SBIR in the United States but innovative solutions Canada. It's only a three-letter word in Canada.

I think those are two programs, without going into the details, that are squarely aimed at solving that problem. I encourage you to talk them about it.

12:45 p.m.

Conservative

Bev Shipley Conservative Lambton—Kent—Middlesex, ON

Are there any other comments?

Thank you.

On payments, what do we do in terms of the payments between 60 and 90 days and then notice of more than 90 days? How do we deal with that to improve it?

12:45 p.m.

Executive Vice-President, Aerospace Industries Association of Canada

Iain Christie

How long do I have? Bottom line is that it has to be a priority amongst the other top priorities, but it has to be a priority for procurement officials to get people paid on time.

I'll give you a very quick example, two different examples. One, you submit a claim that has a small error in it. On day two after the claim has been submitted, you get a call from the procurement officer, “You're going to need to fix something if I'm going to get you paid on time”.

The other example is, on day 28, you receive a formal letter with a return of the claim saying, “The following inaccuracies are in your claim, please resubmit”, which will give them another 30 days to assess it and then 15 days to pay it.

The first example, unfortunately, was not a Canadian government. The second was.

12:45 p.m.

Conservative

The Chair Conservative Tom Lukiwski

Thank you very much.

Madam Ratansi.

12:45 p.m.

Liberal

Yasmin Ratansi Liberal Don Valley East, ON

Thank you all for coming, and thank you for your presentations.

I have a question for you, Mr. Parent. I'm following up on what Mr. Shipley said. On your slides, you talk about how SMEs are not selling to government because of the tendering process and no means of knowing what the government wants, so there is a gap analysis of what the government wants and what you're trying to supply.

Somebody talked about OSME, the Office of the Small and Medium Enterprises. Have your members been using that office, and is it after using the office that they still feel that this is a really complicated system?

December 5th, 2017 / 12:45 p.m.

Director, President's Office, Canadian Federation of Independent Business

Louis-Martin Parent

The survey in question did have questions—again, in 2009—on OSME. At the time, it wasn't terribly well known. I think now they've done a lot of work to reach out to the supplier community and to do as many presentations and information sessions as possible.

I think the problem is, oftentimes, they don't know what they don't know. I believe, as Mr. Boudreau was saying, there's a perception of it being complicated, and they go to the buy and sell website, which again is a positive development, but they see a whole list of links and things that they have to do and everything, and it seems rather daunting to begin with. It's a question in their minds of whether to take the time they need to know about everything they need to know about, and do what they need to do, or to go to their normal suppliers in the private sector and do the thing that they know how to do.

I think I answered the question.