Government Operations Committee on March 24th, 2021

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

I call this meeting to order.

Welcome, everybody, and thank you very much for coming this afternoon to meeting number 22 of the House of Commons Standing Committee on Government Operations and Estimates.

The committee is meeting today from 4:49 to 6:49. We will hear from the Minister of Public Services and Procurement Canada as part of the committee's study on the subject matter of supplementary estimates (C), 2020-21.

I would like to take this opportunity to remind all participants in this meeting that screenshots or taking photos of your screen are not permitted.

To ensure an orderly meeting, I would like to outline a few rules to follow.

Interpretation in this video conference will work very much as in a regular committee meeting. You have the choice, at the bottom of your screen, of floor, English or French.

Before speaking, please wait until I recognize you by name. When you are ready to speak, you can click on the microphone icon to activate your mike. When you are not speaking, your mike should be on mute.

To raise a point of order during the meeting, committee members should ensure that their microphone is unmuted and say “point of order” to get the chair's attention.

In order to ensure social distancing in the committee room, if you need to speak privately with the clerk or analyst during the meeting, please email them at the committee email address.

For those people who are participating in the committee room, please note that masks are required unless seated and when physical distancing is not possible.

I want to thank the minister for being here today and for offering to be here for 90 minutes. It's greatly appreciated.

At this point in time, I invite Minister Anand to make her opening statement.

[Anita Anand, Liberal, Minister of Public Services and Procurement]

Thank you so much, Mr. Chair.

Good afternoon, committee members and Mr. Chair.

Before beginning, I would like to take a moment to acknowledge that I am meeting you from the territory of many first nations, including the Mississaugas of the Credit, the Anishinabe, the Chippewa, the Haudenosaunee and the Wendat peoples.

With me today are the deputy minister of PSPC, Bill Matthews; associate deputy minister Michael Vandergrift; and assistant deputy ministers Arianne Reza and Lorenzo Ieraci.

Today I am pleased to discuss PSPC's supplementary estimates (C) for the fiscal year 2020-21. First, allow me to address my department's 2019-20 departmental results report.

Among our many accomplishments for that fiscal year, we launched two Coast Guard vessels and delivered a third to the Navy. As well, the open and transparent competition to replace Canada's fighter fleet marked an important milestone in 2019 with the release of the formal request for proposal to pre-qualified suppliers.

We also advanced efforts to ensure that public servants are paid accurately and on time, and significant progress has now been made to reduce the backlog of pay transactions as a result of the Phoenix pay system.

PSPC's work for the year also supported the government's climate action and sustainability priorities by reducing our operational greenhouse gas emissions by nearly 60% through energy efficiencies in our real property portfolio.

Mr. Chair, these are only a handful of our accomplishments.

Of course, when the pandemic landed on Canada's shores in early 2020, my department responded quickly to procure services, supplies and equipment to protect the health and safety of Canadians.

Let me move to a vaccine update. As this committee well knows, this past year was truly like no other. The loss of precious lives, the depths of trauma experienced by Canadians and the damage to the economy wrought by COVID-19 continue to reverberate. With an ever-increasing supply of vaccines now flowing into this country, and more and more Canadians rolling up their sleeves, we are finally beginning to see a light at the end of the tunnel.

My department has pursued a diversified approach to vaccine procurement, and that approach is paying off. Canada is now set to receive 36.5 million doses before Canada Day, and we are continuing to work with vaccine suppliers every day to move up deliveries of doses.

By the end of September, all those who are eligible in Canada will have access to a vaccine. However, we know that our extraordinary procurement activities will need to continue. There is more work to be done.

I shall move to supplementary estimates (C).

To that end, the majority of funding we are requesting in our supplementary estimates is meant to continue supporting Canada's pandemic response. Namely, PSPC is requesting to convert $380 million in unused statutory funding into voted appropriation. This will allow us to continue procuring critical goods and services on behalf of the Public Health Agency of Canada and to help with Canada's ongoing response and recovery efforts.

The PSPC quickly mobilized a significant portion of its workforce to focus on COVID. This has left a large gap in the day-to-day operations of the department, which have not slowed during the pandemic. Therefore, we are also seeking $8.2 million to help PSPC handle other critical procurements to support the ongoing operations of government.

Beyond pandemic-related activities, we are seeking $6.1 million for additional resources to correct data errors in the federal pension system that were transmitted by the Phoenix pay system. While the number of incoming data errors has declined recently, a backlog of files has accumulated that requires attention.

In addition, we are seeking $9.2 million for accommodations costs for pension administration employees, and we are requesting a transfer of $1.6 million to Shared Services Canada as part of an effort to consolidate IT services and decommission data centres. This will save considerable costs in providing data, email and telecom services for government operations.

Mr. Chair, PSPC will continue to lead on many other critical initiatives—from maintaining federal buildings, to defence procurement and supporting the national shipbuilding strategy. That strategy is revitalizing our marine sector and creating jobs for Canadians across the country.

I want this committee to know that we are applying recommendations from the Auditor General's recent report on the national shipbuilding strategy, and we are working with our partners to closely manage shipbuilding progress.

These are just a few examples of our department's wide-ranging work to support Canadians. The funding requested today will allow us to continue to do our important work for Canadians on many fronts, while continuing to procure vital supplies and services that are keeping Canadians safe in this time of crisis.

Thank you very much.

Meegwetch.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Minister, for your opening comments.

We will now go to our first round of questions.

Mr. Paul-Hus, you have six minutes.

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

Thank you, Mr. Chair.

Good evening, Madam Minister. It's been a long time since we've seen you at a committee meeting. Welcome.

You may have guessed that I'm going to start by asking you about vaccines. I would like to understand why we learned from the New York Times that the European Union has signed an exemption agreement with 92 countries, but not with Canada. Have you negotiated to have an exemption so that we are not constantly afraid of not having our vaccines?

[Anita Anand, Liberal, Oakville, ON]

I want to indicate that while it has been a while since I've been to the committee, I have had four appearances at OGGO, and eight appearances across five committees, with 9.5 hours of testimony in total. I am very interested in being collaborative and transparent with Parliament, and working with Parliament.

In terms of your question relating to the EU, we have managed, despite the EU's transparency mechanisms, to continue to get our vaccines out of Europe, because of our diplomatic efforts.

In addition, we are seeing a record number of vaccines coming to Canada, two million this week alone, nine and a half million by the end of March, 36.5 million prior to the end of June, and 118 million prior to the end of September. Our diplomatic efforts are working.

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

In fact, Madam Minister, you are telling us that, in terms of contracts, Canada is poorly organized and must engage in diplomacy. This is costing us billions of dollars, because we are talking about money, billions, today. So if we fail on the diplomatic front, we may not have vaccines in three weeks. At some point, it won't work.

As for export permits, we know that export permits to Canada will be in order for the next two weeks, but we don't know about what comes afterwards. The export permits could be denied and we would be left without vaccines.

Is that possible? Yes or no.

[Anita Anand, Liberal, Oakville, ON]

I would like to reiterate that it is as a result of our diplomatic efforts that Canada has continued to receive vaccines from Europe. The nine and a half million doses prior to the end of March are as a result of our diplomatic efforts. There is an acceleration of doses from one quarter into the next, and indeed, we are continuing to see deliveries from Europe this week and next week. We will continue to work with our suppliers and diplomatic channels to ensure Canadians have vaccines.

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

Thank you, Madam Minister.

I'm going to talk about the ventilators now. We heard on Monday from one of your senior officials, Mr. Mills, that you ordered 40,000 ventilators last year. At the time, I asked how many were needed, because, from the beginning, I thought that was just an unbelievable order.

Of the 40,000 ventilators in a nearly $1 billion contract, 500 were used. We have received 25,000 ventilators, so they have already been manufactured. We have no choice but to pay for them. Fifteen thousand ventilators are still to be manufactured.

Can we terminate the contract to save hundreds of millions of dollars? Can we do that?

[Anita Anand, Liberal, Oakville, ON]

I wish to clarify that I did not order 40,000 ventilators. The PSPC undertook contracting at the request of both ISED and the Public Health Agency of Canada.

As you know, we're the contracting arm of government. Our role is to respond to the requests. Certainly, during this health crisis, the requests were coming to us from other government departments, and that's exactly what we did.

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

Madam Minister, if the Public Health Agency of Canada places an order that does not make sense, doesn't someone somewhere say that it makes no sense, that the government will not spend almost $1 billion and give money to Baylis Medical or others if there is no need?

Isn't your department supposed to monitor all of this and say when things don't work?

That said, the question remains: can we terminate the contract? We have ventilators for the next 60 years. Can we terminate the contract and get the money back, or do we have to give the money to the companies and realize that the government just lost money and it's no big deal? It's your job to monitor this.

[Anita Anand, Liberal, Oakville, ON]

My duty is to ensure we are undertaking the contracting process in a responsible way. When the Public Health Agency of Canada, responding from requests from the provinces and territories, asks us to enter into contracts to serve Canadians during the largest health crisis our country has faced, that's exactly what we undertook to do.

We're supporting the Public Health Agency of Canada. We're supporting ISED, and making sure that Canadians across the country have the materials and supplies they need to combat the pandemic.

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

Madam Minister, with all due respect, no one, not you, not your senior officials, is asking questions. You say yes, you send the contract and you issue the cheque.

We end up spending $400 billion. Every time a question is asked, the answer is that we have no choice. It doesn't work that way. On the one hand, people are going to have to pay back $1,000 or $2,000 because they received too much CERB and on the other hand, we are spending billions of dollars without question, and that's okay.

Mr. Chair, my time is up, but I would have had a lot of questions.

Thank you, Madam Minister.

[Anita Anand, Liberal, Oakville, ON]

Do I get to respond to that, Mr. Chair? There were some inaccuracies in the question.

[The Chair, Conservative, Robert Gordon Kitchen]

Yes, Ms. Anand, and you have 15 seconds.

[Anita Anand, Liberal, Oakville, ON]

In addition to the Public Health Agency of Canada, the made-in-Canada efforts that ISED was undertaking to make sure that Canadian businesses were able to provide domestic supply, whether it was ventilators, masks or gowns, were a very important part of our government's efforts.

The ventilators and companies that were chosen were as a result of an ISED competition that it launched. These suppliers were chosen as a result of that competition. After that competition occurred, run by ISED, PSPC stepped in to support the contracting in the final instance.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Minister.

If you have more to provide, please provide it in writing.

[Anita Anand, Liberal, Oakville, ON]

I will. Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

We will go to Mr. Weiler for six minutes.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you, Mr. Chair.

To our witnesses, thanks very much to all of you for being here today.

Especially, thank you to Minister Anand for joining us again today. This must be setting a record for the number of times a minister has appeared before committee in this amount of time, and in a pandemic no less, when I know you're working around the clock to procure PPE and of course vaccines in the most competitive market imaginable.

I want to switch topics a bit and start with a very west coast question. I'm proud to have a Seaspan shipyard within only a few minutes of my riding. I have many constituents who work there. I know they're doing some great work on various projects as part of the national shipbuilding strategy, and they are not shy about telling me about that. We also had the opportunity to see it in person last year.

Minister, please update us on the NSS, the work that's being done at Seaspan and the importance of the shipbuilding industry to our blue economy.

[Anita Anand, Liberal, Oakville, ON]

The national shipbuilding strategy is a very important aspect of the work that PSPC does. It's a key component to revitalizing Canada's shipbuilding industry, setting them on the path for further national and international projects in the future.

Seaspan was mentioned in the question. It's our west coast partner in the NSS. They're doing great work in relation to our joint support ships project. These ships are essential to our overall naval posture and will ensure that both Canadian ships and those of our allies have access to essential supplies while deployed. I look forward to continuing to engage with the member, with the NSS and with the shipyards while we move down the road to completion.

In addition, I want to make sure that all members of the committee recognize that through the NSS our government is creating good middle-class jobs across the country. This includes $1.54 billion annually to the economy and over 15,000 jobs per year. Through our fully costed and funded plan and our successful management of the NSS, we are delivering for Canadians, and we will continue to deliver for Canadians, whether it's the shipbuilding strategy, the delivery of PPE, the delivery of vaccines.... The list goes on, Mr. Chair.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you, Minister.

There's another issue that's especially prominent. Across the country, money laundering is an issue in Canada, but it's especially prominent in my province of British Columbia, where the nature of the money laundering that we see there actually has been given a name. It's called the “Vancouver model”.

The province has launched the Cullen commission. It has uncovered how in some cases we have Chinese capital evading some of the currency export controls through the fentanyl trade to Canada, which is then being laundered through real estate and casinos. This has an impact not only on fuelling the deadly opioid epidemic that we're having in B.C., but also on raising the price of real estate.

That's why I was very curious to see that in the supplementary (C)s, there is $419,229 under vote 1 for operating expenditures, which is requested “to strengthen Canada's anti-money laundering and anti-terrorist financing regime”.

My question to you, Minister, is, what specific measures would be implemented with the requested funding and how will they strengthen Canada's anti-money laundering and anti-terrorist financing regime?

[Anita Anand, Liberal, Oakville, ON]

As I wrote a number of articles in this area when I was a professor at the University of Toronto, it does give me some great pleasure to respond.

This funding allows us to establish a dedicated team of forensic accountants to support Canada's anti-money laundering regime, its partners and law enforcement agencies in fighting money laundering and terrorist financing in Canada.

I would also like to invite my deputy minister here to add any items from a departmental standpoint that he thinks are relevant.

[Michael Vandergrift, Associate Deputy Minister, Department of Public Works and Government Services]

Thank you, Minister. I'll be very brief on this.

You've nailed it on the head. This money allows us to supplement our existing team of forensic accountants. We work very closely with law enforcement agencies and FINTRAC—this forensic group—in terms of helping them with their efforts. This funding will simply allow us to staff up a little more. In fact, we've launched the human resource processes necessary to do this hiring.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

That's great news.

I think I have only about a minute, so maybe I'll try to get to my last question quickly here.

Minister, in your opening you mentioned that PSPC's work has led to a reduction of 60% in GHG emissions for the real property portfolio. I was wondering if you could just explain how the ministry has been able to accomplish that.

[Anita Anand, Liberal, Oakville, ON]

I'm really glad you asked this question also, because part of my mandate letter and part of what we are trying to do in our real property portfolio is to ensure that the systems—the electrical systems, the HVAC systems in the builds, the renovations and the new builds that we are undertaking in real property in our very large portfolio— are actually green. The Arthur Meighen Building in Toronto is an excellent example of the way in which we have been able to ensure that a contracting process, including the subcontracting process to some extent, has green portfolio acumen in it.

It's an extremely important aspect for our government, as you can see from the legislation that we've introduced. Also for me personally and for my department it is important that we continue to ensure that our real property portfolio is green.