Government Operations Committee on March 22nd, 2018

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Has there been a formal analysis done in the preparation phase for the negotiations, or subsequently, now that the deal has been concluded, is there a document that provides that analysis? If so, could it be shared with the committee?

[Matthew Sreter]

To my knowledge, Mr. Blaikie, there is no such document that provides that type of an analysis.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

What is the feedback mechanism, then? Is the approach of the government, then, to simply wait until a contractor invokes one of those provisions to try to stop a particular procurement program or practice of the government and deal with it then, instead of proactively trying to understand how that works?

[Matthew Sreter]

No, not at all.

In terms of federal government contracting, if it's a change to a big-P policy, that change is manifested through Treasury Board Secretariat's contracting policy. If it's a change to small-p policies and procedures, they're manifested through Public Services and Procurement Canada's standard contract clauses, templates, as well as supply manual. Every time we conclude an agreement and it becomes effective, changes are manifested in those documents to reflect Canada's obligations proactively.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

How does CETA, for example, interact with the procurement strategy for aboriginal business? In what way have those documents changed, or have they at all? And if not, why not? How do those provisions relate to the existing procurement strategy for aboriginal business?

[Matthew Sreter]

What I can tell you in terms of PSAB is that it is a program. The program itself is based on the utilization of set-asides, primarily set-asides that are found in international trade agreements.

On the set-asides in international trade agreements, Canada ensures that we have set-asides for small and minority businesses, or aboriginal businesses explicitly; and, rest assured, all of our agreements have that specific provision.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Is there a threshold for those set-asides? Is it a business up to a certain amount, and anything over that threshold can't include those kinds of set-asides?

[Matthew Sreter]

I think that's a great question. In terms of how they're manifested in the agreements currently, to my knowledge, they are not based on a specific threshold. The threshold is left to be decided by the party implementing the specific trade agreement, in other words, Canada.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Okay. My understanding with CETA is that projects over a certain amount would have to be completely open to competition, which means no additions that might favour Canadian businesses that, say, are more likely to have relationships with indigenous—

[Matthew Sreter]

Absolutely, where trade agreements provide coverage for goods or services, there are thresholds that are indicative above which those trade agreements apply. When you apply a set-aside, the set-aside provides an exemption. It sets that procurement aside in whole or in part from the applicability of the trade agreement.

For any actions undertaken under the threshold, the trade agreements do not apply. For any actions taken above, you have to look at whether or not it should be set aside, in this case, for aboriginal businesses.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Regardless of the size of a contract, if you're hiring an indigenous contractor, and say, it's a $300-million infrastructure project, you could sole-source that and not be held to account under CETA. Am I understanding that properly?

[Matthew Sreter]

I'm not so sure I would agree with that. First, we need to analyze what agreements, including CETA or CFTA, apply to a particular procurement. Once that decision is made, we look at the procurement and the requirements and look to see what indigenous benefits could be provided. If indigenous benefits could be provided, then we set that aside for the purposes of that agreement. Therefore the value of the contract, if it's set aside in whole, does not come into play.

What come into play are specific policy considerations, for example, that are applicable under the procurement strategy for aboriginal business, ensuring that it's a mandatory voluntary set-aside and those criteria apply.

[The Vice-Chair, Liberal, Yasmin Ratansi]

Thank you.

I'm cognizant of the fact that you have time constraints and you want to leave by noon, so we will go to one last seven-minute round, and I believe Mr. Jowhari and Mr. Peterson are going to share their time.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you for joining us today.

Let me quickly acknowledge the great work that you've done. I echo what my other colleagues have said. Very much like Mr. Blaikie, I'm also new to this committee and I'm trying to get a holistic understanding of some indicators. A question was asked by Mr. McCauley, and you made a comment in response that we really don't have a lot of benchmarks yet.

I'd like to get an understanding. What is the overall budget that you're dealing with? How much of it have you spent? How many contractors has it gone to? Of those contracts, how many of them have been for indigenous? How many of them have gone to women and women's small businesses? Are any of those leading contractors getting some subcontractors coming in too?

I would like to start developing some benchmarks so that I can move on to the next. That gives you about two and half minutes to respond.

[Rob Wright]

I would say we are at the early stages of establishing a robust benchmarking, and I agree it is important. I can give you, certainly, a flavour today. If you look at this past fiscal year 2017-18 for the work that we undertake, you see that expenditure is a little above $400 million for the major projects under way.

I mentioned three here today, the West Block, phase I of the Visitor Welcome Centre, and the Government Conference Centre. Of course, there are a broader array of projects than that. So 2.1% of the expenditures went to indigenous firms, for example, which compares.... I think the latest data that we saw from the federal government was from an annual report from the procurement strategy for aboriginal businesses in 2014-15, which indicated that the Government of Canada averages 0.9%. You can see that it compares favourably with—

[Majid Jowhari, Liberal, Richmond Hill, ON]

Have we gone from 0.9% to 2.1%?

[Rob Wright]

That's 0.9% from a Government of Canada perspective and 2.1% for the work that we undertake here within the parliamentary precinct.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Was the target established at around 5%?

[Rob Wright]

The target of 5% was just established over the past year and we're trying to get to flow through to subcontracting and we're now setting up a regime to try and accomplish those targets.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Is that the dollar value? Is that also a combination of dollar value and the number of projects? We can have one project that's worth a lot of money, but if we break it down to much smaller projects and we get more involved—What is that?

[Rob Wright]

The 5% is really what we're trying to encourage for that to occur in all of the major projects.

We are working with our acquisitions partners, within the policy framework, to develop the types of approaches that will incentivize the major contract holders to work with.... Really, where most of the activities happen are the small and medium-sized enterprises that are contracted with PCL, EllisDon, Pomerleau, and others that are the major construction managers who will be winning the competitive contracts.

They then tender competitively and it's the incentivization at that level where we feel we can have the greatest success to encourage participation, whether it's from indigenous firms, creating indigenous employment, female-led organizations, etc.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you.

Mr. Peterson.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thanks everyone for being here.

Regarding the West Block, are we on schedule?

[Rob Wright]

Yes. The construction on the West Block will be completed over the next couple of months, so before Parliament rises, all of the construction will be completed.

Of course, becoming operationally ready is the key thing. We're working hand in hand with the House of Commons, in the case of the West Block, and the Senate, in the case of the Government Conference Centre, to make sure that they are operationally ready as soon as possible. The target is for the fall parliamentary session.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

In regard to 100 Wellington, you mentioned that you're going to utilize the voluntary set-aside on that.