Government Operations Committee on Feb. 23rd, 2017

[Pat Breton]

If I may, Mr. Chair, invoking the NSE allows the Government of Canada to ask certain questions and require certain information that the trade agreements otherwise wouldn't allow, but as my colleague mentioned, it doesn't impact our sourcing strategy or our ability to sole-source. Those decisions are separate. From an officer perspective and an industry perspective, the sourcing strategy and the way the procurement rolls out are nearly identical, with the exception of some of those requirements during the procurement with regard to supply chain integrity.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Mr. Weir, you have three minutes, please.

[Erin Weir, NDP, Regina—Lewvan, SK]

I'd like to give the panel a chance to answer the question about whether the underlying issue here is that trade agreements are too stringent in their procurement provisions.

[Lisa Campbell]

I'm happy to answer to answer the question, thank you.

We look at the Canada-Europe trade agreement that is in place. It's actually common for countries to ask for this kind of exception. It's what all the signatories agreed to. Regarding our national security exceptions, our counterparts in the trade agreements also have similar provisions for their purposes as well. In our view, it strikes the right balance between promoting global competition and trade, and allowing countries, for valid national security purposes, to pull out of the trade agreements for restricted purposes when they need to.

[Erin Weir, NDP, Regina—Lewvan, SK]

I'm glad you brought up the Canada-Europe agreement, because for the first time it extends these procurement disciplines to provinces and municipalities. Would they have any opportunity to invoke the national security exception?

[Lisa Campbell]

I'm here on behalf of the federal government and won't be able to speak to provinces and municipalities. But I can tell you that for CETA it's article 19.3 that has a security and general exception clause:

Nothing in this Chapter shall be construed to prevent a Party from taking any action or from not disclosing any information that it considers necessary for the protection of its essential security interests....

It's similar to the other trade agreements.

[Erin Weir, NDP, Regina—Lewvan, SK]

I raise the issue because it seems that the federal government uses national security exceptions as a bit of safety valve from some of these trade agreement requirements, whereas I think it would be very difficult for a province or a municipality to ever invoke this exception.

[Lisa Campbell]

We often deal with provinces and municipalities because of the links between our work, and they, like us, favour competition. I'd reiterate that the invocation of the NSEs doesn't mean we don't compete globally; in fact, we do, which is the principle that the trade agreements are all about.

[Erin Weir, NDP, Regina—Lewvan, SK]

You've made the point that, even when the national security exception has been invoked, there can be competition. I wonder if you could speak to the possibility of sole-sourcing without invoking the national security exception.

[Lisa Campbell]

They are again distinct, so the request for sole-source may arise in those circumstances that I've described. We look very carefully at the government contracting regulations, and again, because our default is competition, if there's any other supplier out there that can offer the business solution.... We also look very carefully at client departments' requirements to make sure they're not overly tailored to one supplier. So there is a really robust challenge function in Public Services and Procurement Canada, again to default to competition, because in our view that maximizes choice and innovation, as well as providing best value for government.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We'll go into our final seven-minute round.

Mr. Ayoub, go ahead for seven minutes.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Thank you, Mr. Chair.

I want to thank the witnesses for providing us with as much information as possible on these issues. Information dissemination may not always be easy.

I would like to know whether a list of authorized suppliers is publicly available. Is there a public list of the contracts that have been put in place and of the expenses incurred by each of your sectors? Has such a list been disclosed, or did the department just disclose budget and expenditure totals?

[Lisa Campbell]

Thank you for your question.

I would invite all the committee members to visit our website, which contains a lot of information that could answer your questions. All of our standing offers, as well as lists of suppliers, are published in the “buying and selling” section of our website.

We have created lists of pre-approved suppliers across government. As part of procurement modernization, we are currently updating those lists to make it easier for suppliers to sell in Canada and for Canada to buy.

There is already a lot of public information on our website. It would be our pleasure to send you specific links where you could find answers to your questions, should you be interested.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

I will also let the other witnesses answer.

Let's start with you, Ms. Robertson.

[Karen Robertson]

The CSIS information isn't available anywhere online, because we don't publicly share any information about our business. However, that information is very much maintained internally and is available to many oversight bodies. That could be the Treasury Board Secretariat, the Security Intelligence Review Committee, or the Office of the Auditor General. Anybody with appropriate clearance has access to that information. We follow all of the disclosure rules; we just keep the information in-house.

With respect to vendors, we absolutely maintain a list of vendors, because, similar to my colleagues, we compete absolutely everything that we can. We're always looking for vendors. We also liaise with one another. We make sure that if we clear a vendor, SSC is aware of it, and we're also aware of their vendor list. I think, from a procurement perspective, we're actually working from the same lists.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Do you know what percentage of purchases made in Canada involve Canadian suppliers and what percentage of those purchases involve foreign suppliers? Is that information available?

Ms. Campbell can probably answer this question.

My question also concerns security clearances for urgent purchases, which comply with administrative rules, but do not comply with routine procurement rules. I am dividing the purchases into two categories, and my question concerns both of them.

Do you have that information?

[Lisa Campbell]

Thank you very much for the question.

I can tell you that small and medium-sized businesses in Canada have been awarded contracts totalling $5.5 billion a year. That accounts for 35% of the total value of procurements awarded by our department. Over the same period, procurements under $1 million have accounted for nearly 80%. So to answer your question, I would say that the percentage is significant. Averaged out, it's about 40%.

Our department does a lot of outreach to small and medium-sized businesses. Annually, we have about 4,000 contracts with them. We want to make sure that they have access to procurement, that it is easy for them to do business with the federal government and that global competition benefits them. That is very important to us.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Do you have that information concerning the portion outside Canada?

[Lisa Campbell]

Do you mean exports?

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

I am talking about purchases made outside Canada involving external suppliers, either because of competitive requirements, or because those kinds of purchases cannot be made in Canada.

[Lisa Campbell]

Thank you for the question.

We are looking at that a little more closely. I will talk to you a bit about the policy on industrial benefits.

In Canada, we are trying to attract companies from around the world and thereby provide industrial benefits when those companies do business in Canada. Our policy has been in effect for a number of years. Since December 2015, $24 billion has been invested in Canada. A $9-billion investment is underway, and we anticipate another investment of $5 billion. Those are contracts that have been awarded and that require companies to invest in Canada—in other words, they require businesses to provide work for Canadian suppliers, invest in our universities and invest in research and development.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Should the information become available, let us know. I would really like to have it.

[Lisa Campbell]

I would be happy to do it.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

The idea behind my question has to do with competitiveness. The public, including us, does not really have all the information, but it must trust in the process and in your recommendations. Given that lack of information, how can we ensure that there is competitiveness? Not everyone is the auditor general or has the required security clearance to access that information. What mechanism can be used to restore the confidence of Canadians and the rest of MPs by enabling them to evaluate the data and to ensure that, regardless of your security level, there is full compliance?

[Dennis Watters]

As in the RCMP's case, every department has an internal audit committee that develops a risk-based plan annually. By year's end, those committees are capable of reviewing practically all the activities in a department. Although the audits themselves are not conducted in all the branches, people know that auditors can come at any time, including those from the Office of the Auditor General of Canada.