Government Operations Committee on May 3rd, 2021

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

I call the meeting to order.

Welcome to meeting number 28 of the House of Commons Standing Committee on Government Operations and Estimates.

The committee is meeting today from 1:39 on my clock, which would be 3:39 on yours, until 5:39.

We will hear from PSPC and Indigenous Services Canada as part of the committee's study of businesses owned by under-represented groups, and to discuss committee business.

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

Before speaking, wait until I recognize you by name. When you are ready to speak, you can click on your 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 their microphone is unmuted and say “point of order” to get the chair's attention.

The clerk and analysts are participating in the meeting virtually today. If you need to speak with them during the meeting, please email them through the committee email address. The clerk can also be reached by his mobile phone.

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.

With that said, I will now invite the witnesses to make their opening statements.

I see they have just come on board. Thank you.

I don't know exactly who is going to be presenting, but we'll start with Indigenous Services and then go to the next group if we can.

[Jessica Sultan, Director General, Lands and Economic Development, Economic and Business Opportunities Branch, Department of Indigenous Services]

Good afternoon.

Thank you, Mr. Chair and committee members, for the opportunity to provide an overview and update on the procurement strategy for aboriginal business.

Before I go further, I would like to acknowledge that the land on which I work and live is the traditional territory of the Algonquin Anishinabeg people.

My name is Jessica Sultan, and I am the director general of the economic and business opportunities branch at Indigenous Services Canada.

Federal procurement is a powerful catalyst for economic development. Since 1996 the procurement strategy for aboriginal business managed by Indigenous Services Canada has been instrumental in encouraging indigenous businesses to procure with the federal government.

Indigenous Services Canada last appeared before this committee in November 2017 to provide an overview of the procurement strategy for aboriginal business. That appearance was included as part of a June 2018 committee report on modernizing federal procurement, which contained 40 recommendations, eight of which were aimed specifically at the procurement strategy for aboriginal business.

Since the release of this report, Indigenous Services Canada has continued with an indigenous procurement modernization initiative. As part of this initiative, Indigenous Services Canada has engaged with numerous stakeholders, including but not limited to indigenous economics development organizations and their members, national and regional indigenous organizations, organizations that represent modern treaty rights holders, and various levels of government in Canada and internationally. The feedback from these engagements was summarized in a discussion paper that was posted on the public-facing ISC website in mid-2019.

In December 2019, the Prime Minister made a commitment to have at least 5% of federal contracts awarded to businesses managed and led by indigenous peoples. The Department of Indigenous Services Canada, along with Public Services and Procurement Canada and the Treasury Board of Canada Secretariat, have been working collaboratively to implement this 5% commitment, while concurrently pushing forward with the modernization of the procurement strategy for aboriginal business.

At the outset of the COVID-19 pandemic, Indigenous Services Canada supported the establishment of an indigenous business COVID-19 task force, which brought together the leadership of indigenous business organizations to provide the Government of Canada with a single, unified indigenous business voice during this time of crisis.

Also of note, in December 2020 the deputy minister of Indigenous Services Canada sent letters to 92 federal departments and agencies requesting that they set multi-year indigenous procurement objectives as required by the procurement strategy for aboriginal business.

In January 2021, the Minister of Indigenous Services Canada and the Minister of Public Services and Procurement Canada sent letters to their counterparts again reiterating the importance of these multi-year indigenous procurement objectives.

Thank you for the opportunity to provide opening remarks. It is a pleasure to be here with you today.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Ms. Sultan.

Now we'll go to PSPC.

[Lorenzo Ieraci, Acting Assistant Deputy Minister, Procurement, Department of Public Works and Government Services]

Thank you, Mr. Chair, and good afternoon.

Before we start, I'd like to acknowledge that the land on which I work and live is the traditional territory of the Algonquin Anishinabeg people. We acknowledge the importance of continued work towards economic reconciliation for indigenous people.

My name is Lorenzo Ieraci and I'm the acting associate assistant deputy minister for procurement. I am pleased to be here to speak about the progress Public Services and Procurement Canada has made since our last update to the committee. Joining me today is Clinton Lawrence-Whyte, director general at the office of small and medium enterprises.

Public Services and Procurement Canada has come a long way since the tabling of the committee's report on modernizing federal procurement in June 2018. Canada's prosperity, more than ever, depends on ensuring that all Canadians have access to the economic tools and opportunities to build their businesses, including opportunities to access federal procurement.

The COVID-19 pandemic has had a significant effect on Canadians, and it has disproportionately impacted women, indigenous peoples and Black, racialized and other ethnic communities.

The pandemic has also demonstrated that we must eliminate long-standing gender inequalities and systemic racism in this country. Minister Anand's mandate letters and the Speech from the Throne commit our department to increasing supplier diversity and leveraging procurement processes to achieve socioeconomic goals. The 2021 budget also reaffirmed the importance of continuing to modernize federal procurement and creating opportunities for Canadians and the communities in which they live.

As Canada's largest purchaser—more than $20 billion is spent each year on goods and services—Public Services and Procurement Canada has an important role to play in ensuring that the economic recovery leaves no one behind.

Since 2018, we have made significant progress in modernizing our procurement processes and advancing socioeconomic outcomes through procurement. By implementing measures such as the eProcurement Solution and improving our Buyandsell.gc.ca website, we are helping to remove barriers that prevent small businesses from participating in federal procurement.

To increase the diversity of our supplier base, our department assessed various ways of incorporating socio-economic consideration into the government's procurement processes, such as including more under-represented groups. In January 2021, Public Services and Procurement Canada launched the Black business procurement pilot as a tangible first step to expand procurement opportunities for Black entrepreneurs. Moreover, our office of small and medium enterprises provides education and assistance to under-represented groups across Canada, and is developing coaching services for businesses owned by diverse groups.

Our department has also been working to include indigenous businesses in procurements. Together with Indigenous Services Canada and the Treasury Board of Canada Secretariat, we are creating a target to have at least 5% of federal contracts awarded to businesses managed and led by indigenous people. Over the last three fiscal years, and in its role as a common service provider, our department has awarded an annual average of $442 million through nearly 1,500 transactions, such as contracts, call-ups and amendments to indigenous suppliers. Including indigenous benefit plans and procurement activities and offering awareness and education services through our office of small and medium enterprises increases the possibility of indigenous peoples and businesses competing successfully for contracts, as well as for participating in employment and training opportunities.

In 2018, our department also established the Accessible Procurement Resource Centre, or APRC, to help federal departments and agencies incorporate accessibility criteria into their procurement needs. Overall, our initiatives are aimed at identifying barriers faced by people with disabilities, both as end users and as suppliers.

Together, these initiatives are seeking to bring a positive economic impact to thousands of Canadian small businesses, including those led by under-represented groups.

We are also implementing a social procurement policy for our department and will be developing a social procurement program, which will provide additional guidance on how to operationalize and implement social procurement. Public Services and Procurement Canada will also start collecting data to inform decision-making on social, accessible, green and indigenous procurement. As we move forward, we will continue to work with our federal partners on government-wide initiatives to increase bidder diversity, as well as enable the inclusion of socio-economic outcomes for all federal procurements.

In closing, I note that we are motivated to move forward with this very important work. We have taken important steps, but we know that more needs to be done. Our goal is to ensure that government procurement provides opportunities for all, and we are continually moving in that direction.

Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Ieraci.

We'll now go to questions, starting with Mr. Paul-Hus for six minutes.

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

Thank you, Mr. Chair.

Good afternoon to the witnesses.

The Innovative Solutions Canada program was launched in December 2017. So the 2019-2020 report was tabled two or three years after its implementation.

In the “Challenge Stream” component of this report, funding provided to companies, particularly in the technology and health fields, is discussed. Recipients of funding included 60 businesses. No indigenous businesses received funding, no businesses run by people with disabilities received funding, and only two businesses run by women received funding.

Is there a reason for this?

[Lorenzo Ieraci]

Thank you for the question.

The Innovative Solutions Canada program is managed by Innovation, Science and Economic Development Canada, or ISED. So I'm not in a position to answer the question directly, unfortunately. My colleagues who work in that department would be better able to answer questions about the parameters of the program and how it is managed.

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

So none of the three witnesses here today can answer these questions.

I assume the same will be true for my next question. In the 2019-2020 annual report, it states that only 2.6 % of the companies that applied to the programs were majority women-owned companies.

In your opinion, is this low percentage normal?

[Lorenzo Ieraci]

Again, our colleagues at ISED would be better placed to answer a question about the Innovative Solutions Canada program.

I know, however, that the program, which was developed by our colleagues at ISED, is intended to encourage innovation in technology. Unfortunately, I don't know how the program is doing to ensure that companies are aware of the program and understand how it works.

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

This program was put in place by the Liberal government, and it was my Liberal colleague who wanted to study it today. We're trying to ask the right questions to understand what happened. Having said that, I understand that this is the responsibility of another department, and I don't blame you at all.

I would still like to go back to the “Challenge” component. Of the companies that applied to the program, 2.6% were majority women-owned, and of those, 2% received funding.

I assume you can't tell us why some companies were selected and others rejected, because that is a matter for ISED. Am I wrong?

[Lorenzo Ieraci]

That's right. ISED representatives would indeed be in a better position to answer your question.

I can mention one point, though, that I hope will be helpful. The Office of Small and Medium Enterprises, or OSME, is one of the organizations that is part of our department. OSME has offices across the country, and one of its activities is to ensure that businesses view the Government of Canada as a potential client to which they can provide goods and services.

Some businesses may not think of the Government of Canada as a potential client. Through its activities, OSME ensures that businesses are aware of this fact, and helps them by explaining the procurement system. It lets them know what opportunities exist and explains how to be part of the procurement system.

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

Thank you.

Now let's go back to the committee's report, which was tabled in June 2018 and included about 40 recommendations.

Could you tell us what proportion of the recommendations have been implemented? Are we talking about 20%, 30%, 40 % of them?

[Lorenzo Ieraci]

We are already in the process of implementing almost all of the recommendations for our department. Several of these recommendations deal with simplifying the federal procurement system. Two of our activities in this area would be of interest to the committee. The first is the implementation of our electronic procurement system, which we are implementing to simplify the process for suppliers. We want them to be able to register and find procurement opportunities without difficulty.

The second is about simplifying contracts. One of the recommendations and some of the comments we received mentioned that it was not always easy or obvious to understand procurement-related documents.

So we are addressing two elements. On the one hand, we want to simplify how documents are presented and how they can be found and accessed so that suppliers can easily find the information they need. On the other hand, we are looking at how we can simplify the text. We've been told in the past, and we're still being told, that the information is still quite technical and uses legal language. So we're looking at how we can make these documents easier to understand.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Ieraci.

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

Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

We will now go to Mr. Jowhari for six minutes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair.

Thank you to both our witnesses.

Mr. Ieraci, it's good to see you again. It's good to have you back in our committee.

Let me start with Madam Sultan.

The minister's mandate letter includes a target of 5% for contracts with indigenous businesses. How are you or your department working to meet that 5% minimum of contracts for indigenous businesses in the procurement process? How are you partnering with them? Do you have any results to share with us in terms of what the current situation is and what the results of the previous work you've done are? What have we moved toward?

[Jessica Sultan]

Thank you for the question.

I would be pleased to respond on behalf of Indigenous Services Canada.

I will note that it is Public Services and Procurement Canada that is, in fact, the lead on the 5% target. We are working very closely with them as well as with the Treasury Board of Canada Secretariat.

We're in the process right now of working through how this target will be put in place, specifically on the part of Indigenous Services Canada, in addition to working with our two partner departments. We're undertaking significant outreach with various indigenous organizations to ensure that we appropriately understand both the opportunities and the potential challenges of having more participation by indigenous businesses in federal procurement.

In addition, we are undertaking extensive training and a provision of knowledge internal to the Government of Canada both in terms of the practical aspects of undertaking procurement and also in terms of cultural awareness to ensure that federal public servants are knowledgeable about how they can procure with indigenous businesses.

Another step we're taking in a tangible way is increasing our outreach and encouraging businesses to register on a database called the indigenous business directory, which is the authoritative source of indigenous businesses listed with the federal government. It is a place where federal procurement officers can look to find indigenous businesses that they may be able to work with in order to fulfill a procurement requirement through an indigenous business.

Thank you.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Madam Sultan.

Mr. Ieraci, I understand that your department has been working with under-represented groups and SMEs. I've had the pleasure of working with you and your department a number of times in York region and in my riding of Richmond Hill, where we have benefited from input by OSME.

What specific actions has the department taken to reduce the barriers for the under-represented groups, and what result have you seen from these actions?

[Lorenzo Ieraci]

Thank you for the question, Mr. Chair.

In a moment, I'll turn it over to my colleague, Mr. Lawrence-Whyte, who will speak a bit about the office of small and medium enterprises and what they're doing to be able to support small business in terms of federal procurement.

To answer the question more directly, there are a couple of things that we are doing and have been doing to seek to remove barriers. What I would note is that some of the barriers to entry in terms of procurement impact all small and medium-sized enterprises regardless of ownership.

I mentioned two of the things previously. One, we're implementing the electronic procurement solution. This solution, which we're rolling out now, is going to make it easier for companies to register for federal procurement, to find opportunities on the new CanadaBuys website and to be able to participate in federal procurement.

I mentioned contract simplification. I don't necessarily want to repeat that as well, but one of the things we have been doing is really increasing the level of outreach and engagement with under-represented groups to raise awareness of federal procurement opportunities.

If the chair will permit, I'd like to turn it over to my colleague, Clinton Lawrence-Whyte.

[Clinton Lawrence-Whyte, Director General, Office of Small and Medium Enterprises and Stakeholder Engagement, Department of Public Works and Government Services]

Thank you very much, Mr. Chair, and apologies in advance. I have some microphone challenges, so I'll do my best to speak in a clear manner.

As mentioned, I'm the director general for the office of small and medium enterprises. One of the key elements of our mandate is to improve access to federal procurement for small and medium enterprises. We have been putting a particular focus on access for disadvantaged groups, and OSME has been working quite hard. We have a group of six regional offices that enable us to have active involvement in communities in providing support and outreach to these communities.

Our activities are basically grouped around three sorts of main areas in terms of how we support. The first area would be awareness, where we try to make sure that we're involved in activities so that we're enabling members of these communities to understand what it is that we offer. We work and participate in different events to make sure there's awareness of OSME and that what we offer is clearly understood.

We also undertake related educational activities. It could be free webinars. It could be presentations on how to bid or on other types of support that will enhance the knowledge of some of these communities on how federal procurement works.

Finally, it's assistance. We are open to folks just reaching out to our offices to have one-on-ones or other supports so they can be walked through and exposed to what they need to know to be confident and want to participate in federal procurement.

We do work quite actively to make sure that we are enabling these communities to understand procurement and to ultimately have success in the federal procurement process.

Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Jowhari. The timing was perfect.

Now we'll go to Ms. Vignola for six minutes.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

I will also revisit the committee's June 2018 report on modernizing government contracting for small and medium-sized businesses as well as women-owned and indigenous businesses. Small businesses rarely have the funds or resources to pay a full-time person to research government sites for potential contracts or to handle the paperwork associated with the Public Services and Procurement Canada, or PSPC, procurement process.

The same finding is evident from the committee's recommendations in June 2018 and several meetings it has held since January 2020: it is important to simplify the process and support small businesses.

What are you doing to reduce the administrative burden associated with the PSPC process for small businesses seeking to supply goods and services to the Government of Canada?

[Lorenzo Ieraci]

Thank you for the question.

I'll go back to the report that was filed in June 2018. One of the comments we received from suppliers was that it is quite difficult for them to find contracting opportunities on the Buyandsell.gc.ca website. The good thing is that there is a lot of information on this site, but for SMEs, this abundance of information is problematic.

So we created an email notification system. When a company undertakes a search for goods or services that are related to their field, once they register, they receive free emails that notify them each time a new document associated with their field of interest is published on the Buyandsell.gc.ca site. This eliminates the need for companies to search regularly, if not daily, for potential business opportunities. Once they are registered, they can receive notifications.

I talked earlier about simplifying contracts and electronic systems, but I'll stop here.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you, Mr. Ieraci.

Also in the same report, it is recommended that training be provided to procurement employees to develop their federal contracting skills and expertise in agile, results-oriented procurement methods.

Have employees had such training?