Government Operations Committee on May 16th, 2017

[The Vice-Chair, NDP, Erin Weir]

Colleagues, it's 8:45, so let's get started.

The finance committee has asked our committee to study two clauses of the budget implementation bill that affect Shared Services Canada.

We have three organizations before us. I would invite them to testify for up to 10 minutes each. We'll start with Shared Services.

[Ron Parker, President, Shared Services Canada]

Thank you, Mr. Chair.

We're pleased to be here today with the committee on the two clauses. With me are Alain Duplantie, the chief financial officer and senior assistant deputy minister for corporate services; and Graham Barr, our director general for strategic policy, planning and reporting.

Shared Services Canada was established in 2011 to modernize the Government of Canada’s information technology infrastructure.

SSC delivers email, data centre, network and workplace technology device services. SSC also delivers cybersecurity and IT security services to the Government of Canada.

SSC is pleased with these legislative amendments. They will help us implement our mandate. They also directly support our minister's mandate letter, in which she is asked to modernize procurement practices so that the practices are simpler and less administratively burdensome.

Among the advantages, the amendments would help SSC to offset the large administrative burden of the low-dollar-value procurement transactions we currently do for others. As well, they would allow us to focus on the more complex and strategic transactions. This would make it easier and faster for departments to get the IT goods and services they need in order to deliver digital services and programs to Canadians. In short, we think they would provide a win-win solution for SSC and our customers.

Departments would be able to purchase some IT goods and services directly from vendors through SSC procurement vehicles.

SSC will remain the contracting authority for IT goods and services for the Government of Canada. We will continue to set up the IT contracts and ensure economies of scale. As well, we will continue to perform the supply chain integrity assessments, to ensure that only trusted equipment and software are used in the delivery of key services.

Looking specifically at the amendments, they would result in two separate yet related changes.

First, they would amend section 7 of the Shared Services Canada Act to authorize the minister responsible for SSC to delegate to other ministers the power to procure certain IT items related to our mandate. This could include items such as microcomputer peripherals like keyboards and USB keys, using Shared Services Canada's standing offers.

Currently, departments do not have the ability to procure these basic items on their own, and SSC provides little value added in these transactions. These IT devices would therefore be strong candidates for delegation of procurement authorities to ministers and their departments.

Printing would be another potential area for delegation. SSC is currently in the process of establishing a new method of supply for printers. We aim to put in place three contracts with industry-leading manufacturers. We will establish catalogues of goods and services that have been standardized and verified for security purposes. With the proposed changes, the minister would be able to delegate to departments the ability to buy from these catalogues.

The second change would amend section 9 of the Shared Services Canada Act. This would enable the minister for SSC to authorize another minister to deliver services related to our mandate in exceptional situations where it is more practical, efficient, and financially viable to do so. This addresses the fact that SSC is obligated to provide all goods and services related to our mandate in all locations where the government has a presence.

That's not efficient and, in some particular situations, not very practical. This could apply to embassies, consulates, and defence deployments overseas run by Global Affairs and the Department of National Defence. These departments currently do not have the ability to provide basic IT goods and services to their employees without going through SSC.

Before closing, I also want to explain how we got here.

In September 2015, Order in Council 2015-1071 clarified and expanded SSC’s responsibilities related to the procurement of goods and services.

The intent was to reduce the duplication of procurement efforts between SSC and Public Services and Procurement Canada. It was also to better leverage the purchasing power of the crown by consolidating service delivery and acquisition in one place.

With this order in council, back in September 2015, SSC assumed responsibility for a number of existing PSPC procurement tools, but it didn't have the authority, which this legislation now provides, to delegate low-value purchases to others, the way PSPC could and did. This meant that SSC also assumed the sole responsibility to execute all acquisitions related to the delivery of shared services, including procurements on behalf of departments.

Overall, this resulted in a substantial increase in low-value, high-volume transactions flowing through Shared Services Canada. From September 1, 2015 to March 30, 2017, we processed approximately 24,000 transactions for the procurement of goods and services on behalf of other departments. Approximately 80% of those transactions were below $25,000.

The amendments we are discussing today would help to offset the administrative burden that SSC is experiencing and provide additional flexibility to SSC in meeting our customers' needs. It would be a lot more efficient for the departments to access these vehicles themselves.

The amendments are also consistent with the delegation of authority provided under the portfolio of Public Services and Procurement Canada. They are based on a proven model that ensures efficiency in procurement while centralizing purchases of higher complexity. As it moves forward, SSC will seek input from its clients regarding the implementation of a potential delegations framework.

We would now be pleased to take the committee's questions.

[The Vice-Chair, NDP, Erin Weir]

Thanks very much for your presentation.

We'll go now to the Department of Foreign Affairs, Trade and Development.

[Arun Thangaraj, Chief Financial Officer and Assistant Deputy Minister, Corporate Planning, Finance and Information Technology, Department of Foreign Affairs, Trade and Development]

Thank you, Mr. Chair.

My colleague Martin Loken and I want to thank you for the invitation to appear before the committee. It's a pleasure to be here.

I'll make a few brief opening comments, after which I would be pleased to answer your questions.

Global Affairs Canada is mandated to manage Canada’s international platform. The platform is a network of 179 missions in 109 countries that supports the international operations of Global Affairs Canada and 37 partner departments, agencies and colocators, such as provincial government representatives.

We are a 24-7, around-the-globe knowledge organization, where information flows continuously to enable everything that our department does. We depend on a secure and efficient information technology infrastructure, whether it's to promote Canada's interests in the world, to deliver trade and consular services to Canadians, or to provide humanitarian assistance.

A critical element of this mandate is the provision of IT services overseas. Global Affairs Canada fully supports the government's enterprise approach to information technology. Global Affairs works closely with Shared Services Canada to ensure that a secure, reliable IT infrastructure is in place to support our department's employees in Canada and our workforce abroad.

In particular, this includes support and maintenance of Shared Services Canada infrastructure, including servers, networking, secure systems, and email. It also includes local procurement of IT goods and services such as BlackBerrys, telephone lines, and Internet service providers.

Global Affairs and Shared Services Canada share and jointly fund a workforce of over 150 Canada-based and locally-engaged information technology professionals who deliver the majority of these services at missions abroad. This approach has been effective in maintaining service delivery abroad since the creation of Shared Services Canada.

Global Affairs Canada supports the proposed measures in the Budget Implementation Act related to Shared Services Canada. In our view, these are important tools to enable Shared Services Canada to focus on its core mandate and to streamline the delivery of services in challenging international environments. In particular, the delegation of procurement authorities for IT goods and services outside Canada would allow my department to respond more quickly to changing needs at missions abroad.

We look forward to working with Shared Services Canada to examine how these proposed changes, if enacted, can be leveraged to meet the needs of Canada's international platform.

Thank you, Mr. Chairman. We look forward to your questions.

[The Vice-Chair, NDP, Erin Weir]

Thank you very much.

We'll now conclude with the Department of National Defence.

[Len Bastien, Defence Chief Information Officer and Assistant Deputy Minister, Information Management, Department of National Defence]

Mr. Chairman, ladies and gentlemen of the committee.

I'm pleased to be here this morning to answer your questions.

I'm pleased to be here to take your questions on behalf of National Defence and the entities we represent in collaboration with our colleagues from Shared Services Canada. We'd like to support them in their endeavours to continuously improve the overall enterprise approach in the IT service delivery, and ultimately to the end user experience of our folks. We'll be glad to take any of your questions.

[The Vice-Chair, NDP, Erin Weir]

I appreciate the testimony.

We'll now go into questions from the committee. My intention is to get through a full seven-minute round.

I should also mention to committee members that my intention is to ask the NDP's questions from the chair. We're in an unusual situation where both our chair and the other vice-chair are absent, and there are no other New Democratic MPs on the committee.

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

Does that have to be unanimous?

[Some hon. members]

Oh, oh!

[The Vice-Chair, NDP, Erin Weir]

If it's not unanimous, let me know.

[Kelly McCauley, Conservative, Edmonton West, AB]

What makes it more difficult for the Chair should be the questions that we're asking here. We're fine with it.

[The Vice-Chair, NDP, Erin Weir]

It's a good criterion.

We'll begin with Mr. Whalen.

[Nick Whalen, Liberal, St. John's East, NL]

Thank you, Mr. Vice-Chair.

Thank you all for coming today at the request of the finance committee, as well as our committee.

When you read the proposed amendments, obviously they don't flesh out some of the detail you've provided, Mr. Parker. Can you elaborate a little more perhaps on the advice that you might have provided to the minister regarding the forms of delegated authority? What sort of limits are there going to be on them? When you focused on the number of $25,000, was that a cap you've recommended the minister include in her delegated authority under proposed section 7.1? Are there other constraints? Based on your advice, is it going to require that they only be purchases under existing standing offers?

[Ron Parker]

On the latter point, I would expect that the vast majority would be under standing offers because those goods and services have gone through the supply chain integrity check, and they are secure and trusted in that event. In the broader frame, I think you've described well the questions we have to sort through with our partners. I expect that frame to vary at least somewhat across the partners, depending on their needs, as well as SSC's requirements. We have yet to sit down with the partners to work through the entire framework to elaborate. Our priority was to get their legislation articulated into the budget implementation act, and we will be following up in the weeks ahead to take on those types of issues, Mr. Chair.

[Nick Whalen, Liberal, St. John's East, NL]

Clearly, in some changes like this, the devil will really be in the details. Maybe this is a question for all departments. I'll leave aside section 9 for a moment.

What are your expectations at National Defence of the level of delegated authority that should be expected in order to realize the efficiencies at Global Affairs Canada?

Maybe, Mr. Parker, you could also speak to some other departments that may require less or more authority to achieve the efficiencies you've talked about.

Mr. Thangaraj.

[Arun Thangaraj]

When we've looked at the potential impact of this, we're looking at standard goods. For us, the efficiencies would involve our ability to roll those out in a timely manner. We work very well with Shared Services Canada. The current procurement process is an additional step. By using established and pre-competed standing offers, it allows us to select.... Take, for example, a keyboard, that's a fairly standard device, and to—

[Nick Whalen, Liberal, St. John's East, NL]

You don't anticipate wanting to use this authority for something larger, like specialized software applications, or anything like that?

[Arun Thangaraj]

No.

[Nick Whalen, Liberal, St. John's East, NL]

Mr. Bastien.

[Len Bastien]

Thank you, Mr. Chair.

For us, OIC 0958 in 2012 defined exclusions. The biggest area for us is our deployed operations. We support deployed operations under those exclusions. A lot of our capabilities for procurement are satisfied by that. It's not a big change for us, from a deployment aspect. In Canada, however, I can see this being of great advantage to the end users, and the service they're going to be able to get will be a lot more efficient and expeditious, I believe, just because the delegation of authorities will release the organizations to be more effective. I think that's....

[Nick Whalen, Liberal, St. John's East, NL]

Mr. Parker.

[Ron Parker]

I'll just make one point, and then I'm going to ask Mr. Duplantie to respond.

For the most part, software acquisitions are not part of our mandate. Specialized software is not on the table. This is about hardware and goods and services related to the delivery of IT infrastructure.

Alain, do you have any other thoughts?

[Alain Duplantie, Senior Assistant Deputy Minister and Chief Financial Officer, Shared Services Canada]

Certainly.

If we go back to the point in time when SSC took over the expanded mandate, in September 2015, Public Services and Procurement Canada had a number of standing offers and supply arrangements for departments to avail themselves of microcomputers, printing products, scanning products, and the like.

When the authority or the mandate transferred over, we did not have the authority to have the powers of the minister delegated to others. While previously departments could contract directly from vendors where the standing offers had been established, all their transactions then had to come through SSC in order to go to those same standing offers.

In the first instance, we want to tackle the low-hanging fruit. Where standing offers currently exist, or in the instance that Mr. Parker articulated in his opening remarks, a new contract for printing services, those would be opportunities available to departments. It would be more efficient on their end.

[Nick Whalen, Liberal, St. John's East, NL]

Thank you. I have one more question.

In proposed section 9.1, this seems like a broader mandate for international operations. If I understand correctly, Mr. Bastien, for deployed operations, DND already has sufficient authority to make its acquisitions.

However, Mr. Thangaraj, is there some requirement for Global Affairs Canada to have additional acquisition authority outside of Canada? Have you run into trouble over the last year and half with respect to the acquisition of cellphones, and whatnot, for use in the field?

[Arun Thangaraj]

Most of those acquisitions that we do internationally, we do jointly. For example, for BlackBerrys in the field, we have done that jointly with Shared Services Canada.

I think what we will be looking at, as Mr. Parker said, is where it's practical or efficient, or where there's a financial benefit to us, could we be doing some of those services internally?