Government Operations Committee on July 23rd, 2020

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks everyone, and welcome back.

I want to follow up, please, on the comment that Mrs. Block brought up about forced labour.

I'm looking at Buyandsell.gc.ca. It says “ethical procurement certification solicitation clause...requires that the bidders and their first-tier subcontractors comply”. So second-tier contractors don't.

Your comment about self-certifying is very worrying. It scares me greatly that we're relying on a corrupt, despotic government and a system that is imprisoning millions of people and using forced labour, and forced transfer labour to cover up their forced labour, and we're going to deal with it on a self-certify....

Please tell me I'm wrong here, that self-certify is not as it seems and that we're not relying on them to self-certify that they're complying with our standards.

[Bill Matthews]

Thanks, Mr. Chair.

I'll start the questions, but I will go back to Ms. Reza in a moment, I think.

Self-certification is the starting point. You will appreciate that when we're dealing with suppliers in other countries, we don't always have access to the same types of information that we would in a Canadian context, but—

[Kelly McCauley, Conservative, Edmonton West, AB]

Let me interrupt there, though. When we don't have that access to information when we're dealing with a despotic regime that is jailing people for their religious views, or others, shouldn't we then say, “Well, we can't get the proper information. We're not going to deal with them or we're going to take added steps”?

What added steps are Deloitte and our experts on the ground in China taking to make sure that no goods are coming into our country that have been made by forced labour or forced transfer labour?

[Bill Matthews]

It's a two-part answer. Self-certification is one. The second part is the regime—

[Kelly McCauley, Conservative, Edmonton West, AB]

It's completely invalid to expect the Chinese government to self-certify, so let's skip that.

What's the second one?

[Bill Matthews]

The second part is that we do go back against all our contractors and check their track record in terms of any charges they have faced. If they've been found or have pled guilty to charges that are on the list, then they're not eligible. That's the two-step regime.

[Kelly McCauley, Conservative, Edmonton West, AB]

What charges? Pled guilty to the Chinese regime charging them...?

[Bill Matthews]

Mr. Chair, I mentioned the two-step process. We have the regime that checks against charges against the country.... I should ask Arianne if she wants to add anything to this.

[Kelly McCauley, Conservative, Edmonton West, AB]

Yes, please, and point out how I'm wrong here.

This is very worrying. It seems that there's very little oversight, apart from trusting this despotic country to self-certify. It's not breaking any laws in China to have forced labour—the Uighurs—so please tell me how I'm wrong here.

[Bill Matthews]

Arianne, did you want to jump in?

[Arianne Reza]

I was just going to confirm that, as you indicated, there is a two-key process at the heart of this: looking at the self-certification that we've put in place between Canada and our contractor in their first-level sub, complemented, of course, by the integrity regime. In addition, there are other pieces under way, including the work we're doing in combatting human traffic, looking at our code of conduct, working with our suppliers to review as much as possible their ethical supply chain, and adding in risk assessment.

[Kelly McCauley, Conservative, Edmonton West, AB]

We subcontract to Deloitte, which is the primary and may subcontract to someone else. We have just two levels that we look at. We can't count on a self-certification and we certainly can't count on your second backstop if they haven't been convicted of crimes, so we very much could potentially be buying goods from forced labour camps or the forced transfer of Uighurs, Muslims, Turks, Christians and others.

Again, I'd like to believe that we're not, but it doesn't sound like our checks are actually going to work. We're not dealing with the U.S.A. or Vietnam, where there is actually a basic rule of law.

We've seen them kidnap our citizens. We've seen them sell us faulty masks. We're not exactly dealing with a country that shares our values. They could very easily skip around our simple, basic two-step process. Am I right?

[Bill Matthews]

Mr. Chair, how much time do I have left? I have a sense we're running out.

[The Chair, Conservative, Tom Lukiwski]

Absolutely none, but I do encourage you to give a fulsome answer to Mr. McCauley's last question, if you could do so, once again, as quickly as possible in writing and direct that to our clerk.

We will now go to Mr. Jowhari for five minutes, please.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair.

Thank you, Mr. Matthews and your colleagues for the testimony today. I'd also like to thank your department for working so hard in making sure our nation is taken care of during these difficult times.

I want to follow up on a topic that was brought up earlier on the ESCR. You explained it as a short-term backstop for key industries. It's going to be launched on August 3. That's what I heard in your testimony and jotted down. Can you please explain why it's August 3? Why not earlier? Also, who can apply for this? What is the application process? How long does it take and what are the criteria?

[Bill Matthews]

Thank you for the question, Mr. Chair.

I have a couple of points on this one. In terms of why it's August 3, we wanted to make sure it was up and running, the process was clear and people had a chance to investigate the process before applying.

[Majid Jowhari, Liberal, Richmond Hill, ON]

I meant, why not earlier?

[Bill Matthews]

Why not earlier? It's a few days after the announcement just to give people some time to be ready. We're getting close to being ready to go, but it's about a week or so away, a week and a bit, I guess.

Who can apply? In terms of the first kind of lens, are you in one of the twelve essential services? I listed those earlier. That's the first key.

I mentioned the short term in that this is not meant to be an ongoing source of supply for an industry. This is 30 to 45 days' worth, if you're really in a pinch. That's kind of the model there.

Because of that, it does have to be fairly quick decision-making. A given industry would apply. It would get vetted. If it's in the transportation sector, it would come through the Department of Transport, which would do some assessment. We will be looking very quickly, first, at whether they are one of the essential services. Is the need proven? Have they exhausted all their efforts? Those types of things....

[Majid Jowhari, Liberal, Richmond Hill, ON]

How long will this process take?

[Bill Matthews]

We're hoping that it will be within a week. It's pretty quick. Again, it's something new for us. It has to be quick to be useful, because it's meant to be a short-term backstop. Obviously, if it takes months and months, that's not effective.

[Majid Jowhari, Liberal, Richmond Hill, ON]

What types of PPE are available as part of the reserve?

[Bill Matthews]

It's largely non-medical. You'll see KN95 masks. You'll see cloth masks, hand sanitizer and coveralls. Things like these will be stocked in there.

I should also have mentioned that part of the other reason for the delay, August 3, was to give industry a chance to organize as well. We do want industries self-organizing to the extent they can before they turn to the backstop.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you for that.

Talking about industries.... I'm switching to a different topic. You talked about the fact that 22% of the contracts that have been awarded are domestic contracts and are worth about 44% of the value, which is great. This is part of our strategy: building the capacity.

One of the things you mentioned, which I'd like you to expand on, is that the domestic ones have been slow to deliver. Can you expand on that one? Why have they been slow to deliver?

[Bill Matthews]

I should be more precise with my comments. Some pieces of domestic ones have been slow to deliver.

When you look at face shields, you will see that it's been very quick—quite miraculous, frankly—and really on board quickly. If you're getting into manufacturing ventilators for the first time, you need supply chains and raw materials, and that takes time to stand up. I would say that for face shields, it's absolutely very efficient, and for ventilators, longer.

Other factors that would slow an industry down in terms of ramping up include bringing your workforce back. Making sure your workspace is properly organized to reflect the COVID environment is part of the story as well. Access to raw materials is big. With regard to gowns—an area where the Canadian industry has done a fantastic job of responding—the material used to make traditional gowns was not readily available, so Health Canada, as a regulator, approved some additional materials, different types. However, again, to go and get that takes time.

It really depended on the complexity of the good being manufactured.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Great.

I have about 30 seconds.

I want to go back to a different topic, the N95. You highlighted the risks. You said that there are a couple of different risks: quality and access to supply. What are we doing domestically to eliminate these risks?