Government Operations Committee on July 23rd, 2020

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Mr. Chair.

I want to make sure that I've understood correctly what I think was said in response to Mr. McCauley's intervention prior to his motion.

I believe what we heard earlier regarding the ethical apparel policy is that this policy only extends to primary and first-tier subcontractors and that we don't know what happens if that first-tier subcontractor contracts out to additional companies.

We've also, I guess, learned that PSPC or the Government of Canada is relying on a regime that has an atrocious human rights record to self-declare that they don't engage in human rights violations when producing PPE, while at the same time there has been confirmation that there are companies using work camps for production.

Can you confirm that I've understood correctly your response to Mr. McCauley on these issues?

[Bill Matthews]

Just to reiterate, step one is the self-certification piece you mentioned and, yes, the ethical apparel policy that was quoted does have two levels: prime and first level down.

We also flagged earlier the integrity check that is done against contractors to look for criminal charges, etc. That's the system, in broad strokes, that we have in place right now.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

I want to confirm that we don't know what happens if that first-tier subcontractor contracts out to additional companies.

[Bill Matthews]

When we are doing contracting, we can have dialogue, but the actual policy itself applies to two levels down.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Okay, thank you.

I'm also wondering if you can tell me what role Deloitte has in ensuring that we're not buying PPE from companies that are using forced labour. I believe Deloitte has been contracted by PSPC to help with our supply chains, so I'm wondering if it has a role.

Does it report to you any findings that would then help inform PSPC on whether or not these companies should be engaged in procurement?

[Bill Matthews]

I will ask Arianne to correct me or to elaborate, just to make sure I have this right.

My understanding of the work done by Deloitte in identifying suppliers is that it was around their ability to deliver quality goods. I don't recall questions such as the member is asking.

Arianne, can you confirm or correct the record here?

[Arianne Reza]

First and foremost, Deloitte was there to help us with logistics and to help us identify suppliers that could help deliver quality goods.

In terms of its initial review, if Deloitte knew anything adverse, it would share it with us, but a lot of that came to the PSPC to review and ensure that integrity checks were done prior to any contract.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you.

I'm wondering—because my time is short with only four minutes—whether the department will commit to looking at the entire supply chain and every single subcontractor in China to guarantee that not one bit of what we are receiving is from forced labour or forced transport?

[Bill Matthews]

Mr. Chair, I have a couple of things on that.

[The Chair, Conservative, Tom Lukiwski]

We don't have time for a couple of things, Mr. Matthews.

I think Mrs. Block was looking for a yes-or-no answer.

[Bill Matthews]

Part of the department's plans are in modernizing procurements to look at these types of questions. However, I just want to flag that when you're dealing with a very deep supply chain in a faraway country, getting the line of sight into these types of questions is not an easy thing to do.

[The Chair, Conservative, Tom Lukiwski]

Understood.

We'll now go to Mr. Zuberi for four minutes, please.

[Sameer Zuberi, Liberal, Pierrefonds—Dollard, QC]

I'd again like to thank the witnesses for testifying.

I'd actually like to pick up on the theme that we heard about just moments ago. It's about the Uighur people.

Just to share this with other members of this committee, the Subcommittee on International Human Rights and I heard very disturbing testimony on Monday and Tuesday—for seven hours on Monday and seven hours on Tuesday—from experts and in first-hand accounts of people who have been interned or have been within the concentration camps in the Xinjiang Uighur Autonomous Region in China.

We heard from experts, including Irwin Cotler and others, that what's going on there rises to the level of genocide according to the UN convention. We also heard that Canada's responsibility to protect doctrine is engaged, and that there are crimes against humanity.

We heard that right now there are between 1 million to 1.8 million people who are in concentration camps in this province in China. We heard that 80% of Chinese cotton is coming from this province. We heard that there is widespread forced labour. We heard that their women are being forcibly sterilized with IUDs and the men are being irreversibly sterilized. There is widespread torture and rape occurring. We heard that there is surveillance going on within these camps, 24-7 surveillance, except for “black sites”. In these black sites, there's torture and there's rape.

We heard that this information was not getting out and has not gotten out until recently. Until recently, we've heard only anecdotal information from survivors. In 2019, what's been known as “the Chinese papers” and other leaked documents from the Chinese Communist Party were reported in the New York Times and showed that this a program, a system. Irwin Cotler, the former attorney general, said that this is the biggest concentration camp since World War II.

That's happening right now, so it's very apt that we're talking about supply chains, because supply chains are something that we—as Canadians, as Canada—can do to do our part to halt what's happening there.

We heard testimony from Amy Lehr, with the Center for Strategic and International Studies, director of the human rights initiative there. To pick up on the supply chains, as in the previous question, she said that you need strong Mandarin reading skills to do the required research. There are a lot of public documents. America has looked into these documents and is able to determine who is profiting from this forced labour and which subcontractors are profiting from this forced labour. We know that within the province where these concentration camps are right now, this is not the end product.

To pick up on what was previously asked, is it possible for the Government of Canada, and the departments in particular, to go further and beyond these two points, which are self-certification and doing a criminal check on companies? Is it possible to go beyond, to do the research that is required and to get somebody with strong Mandarin reading skills to ensure that we are not unwittingly wearing masks that are produced by forced labour and unwittingly having cotton shirts that are produced by forced labour?

This is a human catastrophe. We have a responsibility to protect. I'll leave it at that.

[The Chair, Conservative, Tom Lukiwski]

Mr. Zuberi, thank you very much for your testimony.

I believe, Mr. Matthews, that to adequately respond would take you far beyond our allocated time. I would ask that, if you can, you provide to the best of your ability a fulsome answer for Mr. Zuberi and, once again, in writing to our clerk as quickly as possible.

We'll now go to Mr. Aboultaif for four minutes, please.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

I would like to build on what Mrs. Block and Mr. Zuberi have asked in their questions and try to assist Mr. Matthews a bit on this end.

I've done international trade for a big part of my life. When you place orders overseas, you place them through a Canadian supplier. Is that correct or not?

[Bill Matthews]

In normal times, our go-to would be a Canadian supplier. Under the COVID crisis, we have done more dealings directly with the manufacturer to order at scale, but in the normal case, the member is quite right.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Okay. What's the percentage of orders that you fill directly through manufacturers in China?

[Bill Matthews]

Under the current environment, we have about 10 to 12, probably 10. Let's say 10—

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

How many major suppliers? I don't want to count every single smaller supplier you've dealt with, only the major suppliers. So far we haven't received a large number. Most of the orders you've received are at less than 50%; some of them are less than 15%. On the N95 there was about 2% last month.

Is there a way to backtrack on some of these orders, at least until you do some due diligence on these suppliers?

[Bill Matthews]

I think the member has touched on an important issue here because of the diversification of the market around N95s. As I mentioned earlier, we get some from the United States and the vast majority from China. The reason we have been doing that is that's where the market is.

While there is always the possibility to look into contracts, and we've looked a bit, there have been questions here around whether we can go deeper. This is an interesting question because it's not an area that's easy to get line of sight into. I'm guessing where the member is headed here is the idea that maybe we can go elsewhere. It's not easy to do in the N95 market.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Let me also suggest another thing. As I've said we have only 2% of the N95s, so 98% of the orders, which are supposed to be close to 190 million masks, haven't been received, as far as I know, unless you have a different number for me.

Do you know how legitimate those suppliers are and whether they're meeting all the requirements that are very crucial for Canadians and for our values? I'm not sure how deep you are into the contracts or what the penalties are, but to be honest with you I think if you have a way out you should examine those suppliers.

For the first wave of COVID, we were only able to receive 2% of the total N95 masks, which are supposedly very crucial for the safety of Canadians. If during the first wave we only received 2% of the total supplies that we ordered, why can't we start now?

[Bill Matthews]

The only thing I will add to that, because I expect we're about to run out of time, is the updated numbers on N95. We're up to just over 50 million masks on a total order of 150 million or so, which roughly at about one-third.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

No, your number was 221 million on the first.... You're at less than 25% of those. We still have 75% of orders that haven't been fulfilled, and probably the 25% that you've suggested may not all have come from China, if I am correct. You can correct me if you wish.

[Bill Matthews]

The other thing I should add is that we do have Medicom, a Canadian company, coming on board with N95s as well, which is our first foray into domestic manufacturing in this area. I think a really important part of this question as well is domestic manufacturing ability.

[The Chair, Conservative, Tom Lukiwski]

I'm sorry, Mr. Aboultaif. You're out of time.

We will now go to Mr. Drouin for four minutes, please.