Government Operations Committee on April 26th, 2018

[Marc LeClair]

Yes, absolutely. It's how they measure success too. They'll do one RFP and then they'll do the set-aside RFP. You might wait by the phone forever before you get a call up, but I think they measure that.

It's even with the numbers that they put forward now. You see in Health Canada and Corrections, they've got these astronomical numbers there, but now they're starting to count outsourced programs, such as the Correctional Service Canada. I'm pretty sure that the new health arrangement in B.C. where it's outsourced, is a program that is being devolved, but they're counting that devolution as part of their numbers.

Their numbers don't make sense. One of the things that this committee should consider is a recommendation that puts some accountability in that program, because it has been orphaned in indigenous affairs for years. It gets some attention. Sometimes they go out around town talking to people, but public works isn't really engaged in all of that. There really needs to be accountability built into the system, because there's none now.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Yes, absolutely.

[Brian Card]

The other weakness I find with their reporting is that there are 177 government entities in Canada and 26 procurement vehicles, so it would be a lot easier if you tried to measure that and track it and monitor it via the 26 procurement vehicles versus the 177 entities. That's a recommendation that we're making.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Did you want to add something?

[Marc LeClair]

No.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Speaking of your recommendations, what else are you recommending for this committee?

[Brian Card]

We're recommending, as an example, that maybe they could set up an aboriginal portal. There they could actually send opportunities out to the aboriginal community, especially whenever you see an opportunity that's going to one supplier and nobody knows that; it's kept secret. They should send that to the aboriginal community through a portal and say they can submit a compliant bid. They should have that opportunity. That would be a quick solution to meeting their targets.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

I'm sure we'll get back to Mr. Drouin's theme.

Mr. McCauley, you're up for seven minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Gentlemen, welcome.

Mr. LeClair, it's good to see you again. I'm shocked that you beat Tom in golf, because Tom, I understand, used to be a near-pro golfer.

[The Chair, Conservative, Tom Lukiwski]

He didn't just beat me; he just annihilated me.

[Kelly McCauley, Conservative, Edmonton West, AB]

The 15% you were chatting about, where did that come from? We have set-asides in PSAB for a certain level. Where did 15% come from?

[Marc LeClair]

That's in Manitoba because of the size of the indigenous population in Manitoba.

[Kelly McCauley, Conservative, Edmonton West, AB]

It's a correlation. Okay.

I think it was Manitoba Hydro that you were talking about, with regard to this set-aside. If it's successful, how are they building capacity among indigenous workers? In Edmonton and in Alberta we've got a fair amount, but we have difficulty with workplace participation. Is it 15%? I don't want to put the cart before the horse. It's great that they're succeeding, but how do we get to the capacity so that, when we have a set-aside we can properly involve indigenous companies and youth?

[Marc LeClair]

That's a good question.

[Kelly McCauley, Conservative, Edmonton West, AB]

It's not just in construction, but in other areas as well.

[Marc LeClair]

When we met with the head of procurement, he said whether it's a job in the big company or a job with the subcontractor, it amounts to the same thing. Well, it's not the same thing. If it goes to the subcontractor, which would be the indigenous entity, it builds capacity by obtaining a subcontract and running the job and making a profit. On the other side, the contractor is just paying the labour union and himself.

This is why building the subcontracting component is so important. When we graded RFPs, for example, when we put the grading system in for that one in Hydro, companies were graded higher if they did subcontracting as opposed to having only employees.

[Kelly McCauley, Conservative, Edmonton West, AB]

How do you come up with the 15%? Is that 15% a dollar value or is it 15% of...? What has come up with other witnesses is that we don't want to have an indigenous-owned company on paper that does not provide any benefits, training, or capacity-building to the indigenous community itself. Is it just 15% of a dollar value? Is it 15% of workers?

[Marc LeClair]

It depends on the nature of the contract. In the case of HICPS, it was 20%. I bid on that with another claims outsourcing company, and it was difficult to get to 20%, but we got there. We bid against an incumbent, and I don't think they've ever met the 20%, and I don't think anybody has held their feet to the fire. Part of the solution for any of this is to make sure we have compliance measures that work.

[Kelly McCauley, Conservative, Edmonton West, AB]

You spoke about the work Enbridge did, and we've heard from other witnesses from the energy industry about the great work Suncor and ATCO do without the government forcing them to do set-asides. They do it as a natural part of business. Can you expand on some of the success stories dealing with the energy industry that maybe we can copy over on the government procurement side?

[Marc LeClair]

I think the energy industry is a prime example of what's working. They have an obligation, to some extent, because of the Supreme Court's ruling on the duty to consult and accommodate. However, that was occurring before the Supreme Court weighed in. With Enbridge, we negotiated 15 joint ventures that are going to be moving out in August with the mainliners. They just made it happen. They told the mainliners that there was going to be a minimum indigenous requirement, and that when they went through Manitoba, there was also going to be a minimum Métis requirement. It had a certain dollar value, and the Métis in Manitoba signed an eight-year agreement with Enbridge, which went over and above the pipeline. They then negotiated 14 subagreements, and Enbridge told the mainliners that they can't self-perform everything—they have to rent stuff, get fuel, and so on. For all of those contracts, they negotiated with the first nations and Métis. They said that the supply arrangements were pre-commitments to the project, and that all five mainliners had to see the indigenous people and work out a cost for those services. And they did. It's the same thing with the construction.

[Kelly McCauley, Conservative, Edmonton West, AB]

How would you extrapolate that over to, say, EllisDon for the parliamentary district?

[Marc LeClair]

There's still an opportunity, because the scope of work on Parliament still needs to be defined.

[Kelly McCauley, Conservative, Edmonton West, AB]

What I'm looking for is what the energy industry has done. What would you do to EllisDon to achieve the same success as with, say, Enbridge or Suncor?

[Marc LeClair]

The owner of the project is the people of Canada and the Government of Canada. The Government of Canada needs to tell EllisDon in the contract they enter into for each scope of work...

[Kelly McCauley, Conservative, Edmonton West, AB]

They want 15% of the subs to go to...?