Government Operations Committee on Feb. 22nd, 2021

[The Chair (Mr. Robert Kitchen (Souris—Moose Mountain, CPC)), Conservative, Robert Gordon Kitchen]

I call this meeting to order.

Welcome to meeting number 18 of the House of Commons Standing Committee on Government Operations and Estimates.

Today's meeting is taking place in using the new webinar format. Webinars are for public committee meetings and are available only to members, their staff and witnesses. Members may have remarked that the entry to the meeting was much quicker and that we are immediately entering into an active participation, bearing in mind that we've had a little bit of delay here in getting the witnesses. All functionalities for active participants remain the same. Staff will be non-active participants only and can therefore can only view the meeting in gallery view.

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Now, with that, we have one witness here.

Thank you, Ms. Bull, for being with us.

I'll invite her to have some opening remarks, and, hopefully, by the time she's done, we will have the second witness so we can proceed further.

Ms. Bull, you have five minutes, please.

[Tabatha Bull, President and Chief Executive Officer, Canadian Council for Aboriginal Business, COVID-19 Supply Council]

[Witness spoke in Ojibwa and provided the following text:]

Aanii, Tabatha Bull n'indignikaaz, Nipissing n'indoonjibaa, Migizi dodem.

[Witness provided the following translation:]

Hello, my name is Tabatha Bull. I am from Nipissing First Nation, and I belong to the Eagle Clan.

[English]

As president and CEO of the Canadian Council for Aboriginal Business, I want to thank you, Mr. Chair and all distinguished members of the committee, for the opportunity to provide you with my testimony and to answer your questions.

Speaking to you from my home office, I acknowledge the land as the traditional territory of many nations, including Mississaugas of the Credit, the Anishinabe, the Chippewa, the Haudenosaunee and the Wendat peoples.

From the beginning of the pandemic, the government provided supports for business. A number of those supports were required to be remedied to include indigenous businesses. CCAB has repeatedly highlighted the need for a navigator function specific to indigenous business to assist with the understanding and uptake of the various programs. Indigenous businesses have found navigating the bureaucracy, which often does not consider their unique legal and place-based circumstances, a significant barrier to accessing the supports necessary to keep their businesses alive and maintain their well-being.

The lack of targeted assistance for indigenous business to utilize these government supports underlines the need for an indigenous economic recovery strategy that is indigenous-led, builds indigenous capacity and is well resourced to support indigenous prosperity and well-being.

Such a strategy was not mentioned in the recent Speech from the Throne, nor the fall economic statement. We acknowledge the number of important renewed commitments that were made, but there was no mention of efforts to support the economic empowerment of indigenous peoples, businesses or communities. We hope the government will use the upcoming budget to signal to Canadians that indigenous prosperity and economic reconciliation matters.

During my previous appearances before the House of Commons Committee on Indigenous and Northern Affairs on May 29 and November 17, I stated that unique circumstances facing indigenous businesses were not initially considered when forming the eligibility of CEBA or Bill C-14. This left many ineligible for the wage subsidy. We appreciate that these gaps were remedied. However, we must not forget the additional burden the almost month-long gap had on many indigenous businesses.

Unfortunately when the government introduced Bill C-9, which extended the benefits for rent and wage subsidies, CCAB again had to underline that the government did not consider the unique circumstances facing indigenous business. In this case, it took 82 days to receive clarity from federal officials that the aboriginal economic development corporations are likely not eligible for the rent subsidy. This delay and the disappointing response demonstrate that indigenous businesses continue to be an afterthought when programs are designed to support Canadian businesses.

To support sound federal policy development and effective interventions during the pandemic and in collaboration with leading national indigenous organizations, CCAB undertook two COVID-19 indigenous business surveys to understand the impact of COVID-19. From our most recent survey, we found that nearly half had to let go of staff. Although 57% of indigenous businesses remained open throughout the pandemic, 30% of those businesses surveyed indicated they would survive less than six months without additional financial support. In this vein, I would like to underline that indigenous businesses have repeatedly told us they cannot take on any more debt.

I also mentioned in my appearances at House and Senate committees that numerous indigenous businesses were prepared to readily provide PPE to meet Canada's medical needs. Lists of such indigenous businesses were provided to numerous federal departments as early as March 2020, but only a small fraction of the over $6 billion of federal procurement contracts for PPE was awarded to indigenous business. In a press release of September 21, 2020, it was noted that seven indigenous companies were awarded contracts totalling approximately $2.5 million. This equates to 0.04% of the federal spend on PPE. We understand through discussion with PSPC and through our own combing of publicly available data this value is slightly higher. However we continue to be unable to obtain confirmation of the total spend on PPE in indigenous businesses.

To remedy this information gap, I would like to propose that this committee consider measures that would mandate government departments and agencies to report on their purchases from indigenous businesses as a part of their submissions to the main estimates and the supplementary estimates committee. Simply put, we cannot evaluate and improve upon what we do not measure and report.

I would like to leave you with this point of consideration. Too often, indigenous business concerns are an afterthought, resulting in indigenous organizations like CCAB working to prove to government that their response has not met the needs of indigenous peoples.

A reasonable starting point to support indigenous economic recovery would include procurement and infrastructure set-asides for indigenous businesses and communities respectively, and for government organizations to publicly report these expenditures.

CCAB is committed to continuing to work in collaboration with the government and our members and partners to help rebuild and strengthen a path toward reconciliation and a healthy and prosperous Canada.

Thank you, all, very much for your time.

Chi-meegwetch.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Ms. Bull, for your presentation.

I see that Mr. McHattie is here with us.

Please go ahead.

[David McHattie, Vice-President, Institutional Relations Tenaris Canada, Chair of the Board of Canadian Manufacturers and Exporters, COVID-19 Supply Council]

Good afternoon and thank you, everyone.

My name is David McHattie. I'm vice-president of institutional relations for Tenaris in Canada. I'm the board chair of the Canadian Manufacturers & Exporters.

The impact of the COVID-19 pandemic on Canadians has been severe by any metric, and I believe that the impact will be lasting for a considerable period of time. I was appointed to the COVID-19 supply council to provide insight and expertise regarding impacts on the Canadian manufacturing sector and how it can better support Canada during this time of need.

As an essential business for Canadians that directly generates 10% of GDP and employs directly 1.7 million Canadians, it is important that COVID-19 policy supports are developed with Canadian manufacturing in mind. Including direct and indirect impact, manufacturing amounts to nearly 30% of Canada's economic activity.

Priority issues for Canadian manufacturers are important for all of Canada. The safety and health of Canadian manufacturing employees is the primary priority. The industry needed access to PPE, timely testing and information to provide the goods essential for Canadians. Many manufacturers have ramped up or shifted production in response to the crisis to make more food, energy, PPE and other health care and health sciences products or input products. While this sector has modified its production, it has also had new safety protocols, and production regimes negatively impact its costs.

As many countries restricted supplies, Canadians became more aware of how important a stable, secure and flexible local manufacturing supply chain is to our national well-being. This is as important for industrial products as it is for consumer products. Organizations like the Canadian Manufacturers & Exporters were able to quickly transmit best practices through training services and to connect to members.

By creating the COVID-19 supply council, the federal government took a good step in reaching out to a diverse group for feedback, insights and support. The diversity of this group led to stimulating discussion that benefited all. Initiatives undertaken by the government that connected suppliers and buyers to establish a contingency reserve for strategic products and to inspire the expansion of Canadian supply chains have been lauded universally.

Considering that we're all learning lessons from the past 15 months, it is important that we continue to ask ourselves questions. How has the definition of essential goods changed for Canadians? Manufacturing does matter. Can we develop ideas and produce them here to supply ourselves and the world? How can we stimulate more domestic supply of essential goods through industrial policy and procurement strategies? How can we inspire Canadians to buy more local without limiting the benefits from globalization?

It's with the spirit of questions like these that the supply council worked. I appreciated the opportunity to participate and to contribute and felt like the government was listening to the views of manufacturers and exporters and Canadians broadly.

Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. McHattie.

We'll now go in to our first round of questions and we'll start with Mr. Paul-Hus for six minutes.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Chair.

I'd like to thank both witnesses for being with us.

I'll start with you, Ms. Bull.

The organization you lead has identified a lack of transparency with respect to contracts awarded to indigenous businesses.

You're also a member of the COVID-19 Supply Council. Can you tell me how many meetings the council has held since its inception? If it's more than three meetings, I'd like to know if there are any minutes.

[Tabatha Bull]

My recollection, and I actually in preparation for this went back to look, is we had four scheduled meetings, one of which I was unable to attend, during the course of the supply council.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Mr. McHattie, you said you attended discussions that were stimulating and interesting. To what extent were you involved in procurement planning? Did you have any input? For example, Honeywell offered to sell N95 masks, but the offer was turned down. Were you involved in the discussions regarding these types of purchases?

[David McHattie]

The meetings of the COVID-19 supply council didn't discuss specifics, but rather discussed broadly concepts of the desire to expand the supply chain to include Canadian businesses, and to assure that the businesses in Canada were able to get supply.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Did these discussions focus on future or immediate needs? Were there meetings to respond quickly to Canada's needs?

[David McHattie]

Some of the discussions were about presenting ideas like the supply hub. We were given a very good presentation from those who were developing it. We gave, where appropriate, some feedback on how that could work for us, and how we could help expand the concept to connect with as many Canadian businesses as possible.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Okay, I understand.

There's also the issue of reports on the conflicts of interest.

There is proactive disclosure with the other committee that has been established, the COVID-19 vaccine task force. Companies participating in this working group have signed conflict of interest disclosure agreements. As far as your board is concerned, nothing was found.

Have you been asked to sign a disclosure agreement for potential conflicts of interest?

[David McHattie]

We did sign a disclosure agreement, yes.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Would you like this to be published on the government website to avoid any misunderstandings? Would you like the minister to publish it?

[David McHattie]

I don't have a position one way or the other on whether that should be published or not.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

For your part, Ms. Bull, has your organization signed an agreement to disclose potential conflicts of interest? If so, would you like this to be made public?

[Tabatha Bull]

We did, yes. I don't have a specific position at this time, but I wouldn't have a concern with it being public that we signed a conflict of interest.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Okay, thank you.

I know you're doing some analysis from a long-term perspective, but in the short term, do you have a say in the contracts that have been signed?

For example, the government ordered 40,000 respirators and received about 21,000. However, by any estimate, we have far too many respirators.

In your meetings, do you address these kinds of issues, namely, should we stop spending hundreds of millions of dollars on equipment we no longer need? Do you participate in these discussions?

[David McHattie]

We were not involved in the details of those kinds of discussions. We were only sharing our concerns, and our interest in finding more supply, and finding ways that the supply, and the inputs for that supply, could be provided by Canadian businesses.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

In light of what we've been through, do you think Canada is far too dependent on China for its supply of essential products such as masks, gloves or other personal protective equipment?

[David McHattie]

My personal view is that Canada benefits when we can have a greater supply at home and local. This pandemic has taught us that, while there are many benefits to globalization and having a diverse source of supply, nothing can replace having a capability at home that is secure, flexible and available to Canadians.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you.

We'll go to Mr. Drouin, for six minutes.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Mr. McHattie, can you explain the role of the supply council? I've heard your interchange with Mr. Paul-Hus on the overall strategy of what you were trying to achieve in terms of representing your members, but also helping Canada procure the PPE it needed.

[David McHattie]

As a member of the supply council, I was representing Canada's manufacturers and exporters. The objective was to provide some insight, some ideas and some feedback. We knew we were being asked, especially in those first challenging months, to provide fairly quick feedback on ideas and on initiatives that the government was working toward.

People were beginning to talk about how we could recover, and my view was to create a stable, secure supply in Canada that would benefit Canadians. There were many businesses wanting to step in and support the recovery of Canada and, where possible, provide a local supply that would be very valuable inside the overall context.

The objective was to provide advice and insight. We knew that we weren't participating in any decision-making. Our views were being listened to as counsel only, but were not used in decision-making.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

I'm sure there are MPs who have the same stories as I do, but I know that in my riding, for instance, Tulmar Safety was not in the business of manufacturing visors and/or health gowns, but it retooled quickly to supply the local hospitals. I'm sure you've heard very similar testimonies from many of your CME members.