Government Operations Committee on June 2nd, 2021

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

I would like to thank the minister for appearing in front of our committee again today. Thanks to all the officials for being here as well.

Minister, I would like to continue on the topic we're discussing right now. I'd like to address some of the concerns that have been raised about building back better and returning to normal. There have been lots of legitimate concerns discussed on how Canada comes through the pandemic. Of course, as we have been discussing, these include considerations that need to be taken into account to address shortcomings that have been experienced by underrepresented groups. Effectively, there are groups that have historically been discluded and discounted from procurement competitions.

Minister, I was hoping you could outline how you and your department are engaging in a more meaningful and impactful way with identified groups to provide greater diversity of both access to and participation in Canada's procurement space.

[Anita Anand, Liberal, Oakville, ON]

Thank you so much for the question.

I am very committed to diversifying the federal supply chain for LGBTQ+ and additional diversified and racialized minorities. It's extremely important that minority groups in our country have access to federal supply chains.

I spoke just now about the minimum 5% of federal contracts floor that we have in my mandate letter as a target that we are seeking for indigenous peoples. In addition to that, and in direct response to your question, I have met with indigenous businesses, women-led indigenous businesses, Black-owned and -managed businesses and many other racialized communities to seek their feedback on how we can do better to diversify federal supply chains.

In particular, with the Black-led and Black-managed businesses with whom I met, we heard of the importance of diversification in federal supply chains. What we did in response was to launch pilot projects, which were procurements directed specifically at Black-owned and Black-led businesses, so that we could begin the very important process of gathering data relating to the supplier community and what we should be doing better from a procurement standpoint.

In particular, we are launching, and indeed have launched, the e-procurement system. That is going to allow us, through electronic means, to gather data about the suppliers that are applying for federal contracts. Once we have that data and spread that system across government, we will be able to have the race-based and gender-based data that we need to evaluate our performance.

In short, diversifying the federal supply chain is an extremely important issue for me personally and for our government. In that regard, we have led targeted procurements to the indigenous business community, as well as to the Black business community, but our work is not done. We have more road to travel to meet the minimum mandatory 5% floor for indigenous businesses, which is contained in my still valid 2019 mandate letter. We will keep walking down the road of diversification in federal supply chains to ensure that the Canadian economy represents the demographics of this country.

Thank you.

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

Thank you for that, Minister.

I wonder if you might be able to speak to some specific examples that you wish to highlight in this space to show where we have had potentially some successes or some challenges in advancing on those goals.

[Anita Anand, Liberal, Oakville, ON]

I would like to reference the new Black businesses procurement pilot, which under my leadership and the department's leadership we launched in January across Canada. It aims to expand bidding opportunities to small businesses that are owned or led by Black Canadians. To date, we have launched 12 pilot procurements posted thus far. We've also been holding round table discussions with Black businesses to hear first-hand how we can increase their participation in the procurement process.

In addition to having these additional round tables with Black businesses, I want to mention our relationships and conversations with indigenous businesses. In August 2020, we signed contracts with seven indigenous firms that met the established criteria for the targeted procurements that we launched, worth approximately $3 million, for a total of 15 million non-medical disposable masks. Then again in October 2020, we amended one of the contracts to exercise the option to procure an additional 20 million non-medical disposable masks for an additional $2.94 million.

In other words, what I'm trying to indicate is that even though we're responding to the pandemic with PPE procurements and vaccine procurements, making sure that we diversify federal supply chains has continued to be a priority for me.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Minister. I appreciate that. I want to be respectful of your time, and appreciate your being here.

That's the end of the time for questions for the minister. The officials are going to remain with us.

In order for us to get a bit back on time, we're going to go with five minutes for the first round, and we will be done at six o'clock so that we can continue in camera.

We'll start with Mr. Paul-Hus for five minutes.

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

Thank you, Mr. Chair.

Mr. Matthews, I would like to know how many contracts were awarded with advance payments by Public Services and Procurement Canada during the pandemic?

[Bill Matthews]

Thank you for your question.

At the peak, we were seeing about 30% of contracts having advance payments. That has obviously dropped off significantly as the market has settled, so contracts now are rarely seeing advance payments.

When we were at the peak of the shortage of supply, roughly 30% of contracts were requiring some sort of advance payment. The amount shifted as well. In the early days, it was 30%, and then in a matter of a week or two, it jumped to 50% and in some cases 100%. The market was very volatile at that time.

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

So, 30% of the initial contracts required advance payments. You will tell me there were hundreds of contracts, but there shouldn't be that many that required advance payments.

Following our meeting, will you be able to provide us with the exact number of contracts that required advance payments and the total amount that was paid out in advance?

The Auditor General mentioned this, but we do not have the detailed information. Is that information available?

[Bill Matthews]

Mr. Chair, absolutely, we can provide that information. We could do a broader look, but I would suggest that it was really during the first six months of the pandemic when advance payments were really an issue, and that was changing rapidly.

It might be more relevant for the member if we focused in on the first six months, but I'll leave it to the member as to what information—

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

The period to be evaluated could be between February 2020 and July 2020.

I have another question. Deputy Minister, had you informed the minister about Michel Octeau and Alexandre Brault? Was she informed at the time?

[Bill Matthews]

No, because we did not know who Mr. Octeau was. We only found out after the contract had been awarded.

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

I see.

Can you tell me how a company like Nuctech was able to quickly secure contracts and sell equipment worth such amounts, while other Canadian and Quebec companies whose warehouses were already full of equipment could not even get a response by accessing the BuySell.gc.ca website?

Can you explain to me how this works?

[Bill Matthews]

Thank you for the question.

At that time, we realized that the usual suppliers could not provide the goods in the required time. So we had to find other companies to help us.

At that time, again, there were many new companies popping up. Our traditional supply chains weren't working. Eventually, we got to a place where manufacturing was in Canada, but we used Buyandsell, and were very much looking for rapidity, so who came in first was very important, as well as a quick assessment of whether they could deliver or not. Rapidity was the key feature here.

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

Fine. Thank you.

I'll yield the floor to my colleague Mr. McCauley.

[Kelly McCauley, Conservative, Edmonton West, AB]

I'm sorry, Mr. Vandergrift. It's another meeting with nothing for you, I'm afraid.

Mr. Matthews, I'm looking at GC InfoBase from Treasury Board, and it actually states 57% targets achieved for 2019-20. The minister says that's incorrect.

Is Treasury Board correct? Is the minister correct and Treasury Board is incorrect?

[Bill Matthews]

The context is that roughly 57% to 59% were met. There is about 32% or 33%—

[Kelly McCauley, Conservative, Edmonton West, AB]

That's what Treasury Board says.

The last time you were with us we were talking about—

[Bill Matthews]

I was going to finish my answer—

[Kelly McCauley, Conservative, Edmonton West, AB]

—this sole-source contract with SNC-Lavalin for mobile health units. I understand SNC said it was five mobile health units. How many were actually delivered by SNC?

[Bill Matthews]

Mr. Chair, the contracts in question were for design. Deployment is another part. SNC was on contract to deliver up to five, so they designed—

[Kelly McCauley, Conservative, Edmonton West, AB]

How many did they deliver?

[Bill Matthews]

None have been deployed yet because they have not yet been requested by the provinces.

[Kelly McCauley, Conservative, Edmonton West, AB]

Okay.

Whose decision was it? We heard it had to be sole-sourced to SNC because it was urgent. No province requested them before it was determined to be urgent and ordered. Who came up with the decision to pre-order these mobile hospital units?

[Bill Matthews]

Mr. Chair, this is something where we had to forecast into the future to determine the needs—

[Kelly McCauley, Conservative, Edmonton West, AB]

I realize that, but did PHAC request it? Who requested them?