Evidence of meeting #23 for Government Operations and Estimates in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was domestic.
A recording is available from Parliament.
Deputy Minister, Department of Public Works and Government Services
That's a really important question. All of our masks to date, frankly, are coming from China or the U.S. We have 3M deliveries through the U.S., and the rest are pretty much through China.
We have a contract with Medicom for both surgical masks and N95 masks. Surgical masks are starting to be produced this month, and the N95s will be in late August or early September. That will be our first domestic certified N95 mask, once they're up and running.
Conservative
The Chair Conservative Tom Lukiwski
Thank you very much.
We'll now go to our third round, which will be two and a half minutes each, starting with Madame Vignola.
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
Thank you.
I'd like to talk about Amazon.
Amazon informed the committee that, under its contract with the Government of Canada, it would offer its services at cost.
Are we to understand that Amazon is not making any profit under the agreement it signed with the Government of Canada?
Deputy Minister, Department of Public Works and Government Services
The Amazon question is an interesting one. Yes, the first part of the contract was at zero profit. They were going to learn what it took to actually operate this business. The other part of Amazon was that we were anticipating, with our colleagues at Public Health, a model in which the Public Health Agency would be delivering goods to a broad range of locations, many locations in every province. That's why we thought Amazon would be useful.
It turns out that the provinces actually wanted delivery to a central location, so Amazon.... Well, there's actually no activity right now against that contract. Because the provinces want a rather simplified delivery organization in terms of where the goods go, the Amazon model is not heavily used. No activity is going on there right now.
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
I see.
How is it that a company listed on the stock exchange, a company whose primary goal is to make a profit, signed a contract with the federal government to offer its services at cost, making no profit?
What, if anything, is Amazon getting in return?
Deputy Minister, Department of Public Works and Government Services
I think it was out of a desire to help. They're not the only ones we've seen doing that. We've also seen some of the gown manufacturers in Canada want to contribute and keep their workforce busy, so they're offering us pricing that's effectively at cost. It's something we've seen, although not across the board, by any means. There's still some profit making going on in some companies, but we've seen quite a few companies that just want to help bring their workforce back and do it for zero profit.
Conservative
The Chair Conservative Tom Lukiwski
I think we'll have to end the testimony there.
On that note, we'll now go to Mr. Green, for two and a half minutes, please.
NDP
Matthew Green NDP Hamilton Centre, ON
Jeff Bezos made $13 billion on Monday. I want to be clear and to the point, because I think Amazon should have been at this committee, quite frankly.
What was the cost?
Deputy Minister, Department of Public Works and Government Services
The actual amount paid to Amazon was about $200,000, give or take. As I said, there is no activity going on against the contract now, because the deliveries to the provinces are still to centralized places.
NDP
Matthew Green NDP Hamilton Centre, ON
So the centralized places could, in fact, have been the national emergency strategic stockpiles that are kept across the country for distribution.
Deputy Minister, Department of Public Works and Government Services
No. Every province would have a location, because provinces are the primary providers of PPE and health care. They would all have a central location that they would use to then manage distribution.
NDP
Matthew Green NDP Hamilton Centre, ON
Is it safe to say, then, that the public sector is, on a go-forward basis, with Canada Post and Purolator, able to deliver on behalf of Canadians in the future waves of crisis? Can we now cut our relationship with Amazon?
Deputy Minister, Department of Public Works and Government Services
As I said, there's no activity going on right now against the contract. We have been using Purolator and Canada Post heavily, as well as other companies, to help us deliver on these things.
I think it depends on the model. A relatively simple model, as we have right now in terms of location of deliveries, requires one sort of expertise. If it's more complicated than that, it could be a different model altogether.
NDP
Matthew Green NDP Hamilton Centre, ON
How have we not learned lessons that would suggest a model going forward? We're four months into this. I have deep concerns, Mr. Chair and members of this committee, that we're still not adequately prepared for future waves of this, given how we're doing logistics and the supply chain management of our national emergency stockpile and our future procurements. I would have thought that four months in we would have had an integrated supply chain that would allow us to look into the future months to know what we're looking at in the second wave: what we're going to be procuring and the set-asides that we're going to have for the national emergency stockpile.
Would you care to comment on that?
Deputy Minister, Department of Public Works and Government Services
I think part of that question would have to be answered by the Public Health Agency and, in some respects, the provinces, as provinces are kind of the front line. How we organize as a federal government is very much done in concert with our relationship with the provinces.
NDP
Matthew Green NDP Hamilton Centre, ON
We've heard here whole-of-government-approach language being used by the Liberal government, yet public health and procurement still don't even know what the other one needs in terms of future planning for the NESS.
Conservative
The Chair Conservative Tom Lukiwski
We'll have to end the testimony at this point.
Colleagues, we'll now go to our second hour. Because we are taking only 45 minutes' worth of questions before we go into committee business, I'm suggesting that the first round of questions be five minutes in duration, followed by a second round of four minutes and a last round of two minutes.
We will start with a five-minute round.
Go ahead, Mr. McCauley.
Conservative
Kelly McCauley Conservative Edmonton West, AB
I'm sorry, but you were breaking up and I couldn't hear you. There's a bad Internet connection.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Great. Thanks.
Mr. Matthews, I want to talk about the Nuctech contract that was awarded to a Chinese company for the security systems within our embassies. How did they win this? Was it purely on a low bid?
Deputy Minister, Department of Public Works and Government Services
Let me know if you can't hear me. I'm getting a message that my Internet connection is weak as well.
This was a competition, and it was based on two things: meeting the requirements as defined—
Deputy Minister, Department of Public Works and Government Services
Yes, the lowest compliant bid. You had to have a product that met the requirements, and then there was a price factor.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Do you know why the national security exemption was not used for this RFP, considering we use NSE for everything from paperclips to photocopy paper? Why wasn't it done?
Deputy Minister, Department of Public Works and Government Services
This is a standing offer that will allow for the machines to be ordered, if desired. The requirement at the time identified that the client had no security requirement on these machines. Global Affairs Canada has now indicated it wants to have another look at that, because that would result in a very different type of competition—