Government Operations Committee on June 2nd, 2021

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

Thank you very much, Mr. Chair.

I'm going to talk about delivery schedules, among other things.

The 2021‑2022 main estimates set aside a little over $70 million to put in place measures for DoD to follow up on shipbuilding contracts.

My question is this. Is PSPC going to be involved in these tracking measures?

[Anita Anand, Liberal, Oakville, ON]

We are constantly in touch with the client departments, including DND, in order for us to deliver to Canadians the equipment that is requested, including the naval items that we are discussing today. It is only through that collaboration with DND that we are continuing to deliver on the national shipbuilding strategy, creating good middle-class jobs right across the country, including contributing $1.54 billion annually to our economy and 15,000 jobs per year. The plan is fully costed—

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

Thank you very much, Madam Minister.

[Anita Anand, Liberal, Oakville, ON]

—it's fully funded, and we are delivering for Canadians.

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

Thank you.

Earlier, we talked briefly about prequalifications. I know that Davie Shipbuilding requested an additional deferral.

That said, some previously qualified yards were subsequently granted a deferral in order to be able to comply with requirements.

What explains why it took so long for the Davie yard to be qualified, while others had additional deferrals to comply with the requirements, even though they were already qualified?

[Anita Anand, Liberal, Oakville, ON]

These are negotiations with Davie shipyard only. The process is ongoing and we are looking at making a decision this fall.

As I said before, we are continuing to work with the Davie yard. They asked for the deadline to be pushed back and we have agreed.

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

Thank you.

[Anita Anand, Liberal, Oakville, ON]

This is the current status of the negotiations.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Minister.

Thank you, Ms. Vignola.

We'll now go to Mr. Green for two and a half minutes.

[Matthew Green, NDP, Hamilton Centre, ON]

Thank you.

On page 4 of the departmental plan, where it talks about the purchase of goods and services, you referenced this in your previous answers on the national shipbuilding strategy. On page 4, it talks about working “with government departments and industry” for “Canada's federal fleet of combat and non-combat vessels”. You've touted some of the economic benefits, but you'll recall that there's a pretty big disconnect between what DND says the cost is going to be and what our Parliamentary Budget Officer says the cost is going to be.

Through you, Mr. Chair, will the honourable minister take responsibility should there be an inevitability that this project balloons to the potential of it being an $80-billion project rather than what is estimated to be a $50-billion to $60-billion project? In short, will the minister take responsibility should there be cost overruns, given the variance between what her ADM said as it relates to taxes and the different formulas and what our Parliamentary Budget Officer said?

[Anita Anand, Liberal, Oakville, ON]

Thank you for the question.

I just want to be clear, because there was a discrepancy, as the honourable member points out. The point that I want to be clear on is that taxes should not be included in the CSC costing. Why? The federal government gets these funds back as a result of reciprocal tax arrangements. That is a clarification that I wanted to make, to make sure that the honourable—

[Matthew Green, NDP, Hamilton Centre, ON]

We don't pay provincial taxes? We're not going to pay the 10% tax?

[Anita Anand, Liberal, Oakville, ON]

There are reciprocal tax arrangements between the provinces and the federal government.

[Matthew Green, NDP, Hamilton Centre, ON]

Let me ask this question with more clarity, Mr. Chair.

The honourable minister mentioned that it's fully funded and fully costed. What is the minister putting in terms of contingency for the costing? Is it $50 billion to $60 billion or are they talking about the project being closer to $82 billion?

[Anita Anand, Liberal, Oakville, ON]

There are different calculation methods that the member is referring to in terms of what was deployed by the PBO that actually do drive the costs, including the different ways in which taxes are treated.

I will ask my deputy minister to provide further clarification .

[Matthew Green, NDP, Hamilton Centre, ON]

Mr. Chair, through you, without deferring it to the deputy minister, I just have to ask the question. The minister said it was fully funded so which number is fully funded—

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you—

[Matthew Green, NDP, Hamilton Centre, ON]

—the $60 billion or the $82 billion?

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Green. That is unfortunately the end of time but we would ask the minister—

[Matthew Green, NDP, Hamilton Centre, ON]

May I ask the deputy—

[The Chair, Conservative, Robert Gordon Kitchen]

—or Mr. Matthew to provide the committee with a written answer to Mr. Green's question. I appreciate it.

Thank you. We'll now go to Ms. Harder for five minutes.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

Minister, the Prime Minister has often said, “No relationship is more important to Canada than the relationship with indigenous peoples.”

In your departmental plan you talk about the importance of diversity. You also talked about that in your opening remarks and furthering SMEs that are run by indigenous folks, by women or, by those who are Black. In your mandate letter in 2019, the Prime Minister directed you to give 5% of all federal contracts to indigenous-owned businesses. However, that didn't happen. Why?

[Anita Anand, Liberal, Oakville, ON]

Let me assure you that the target to have at least 5% of federal contracts awarded to businesses managed and led by indigenous peoples is an objective that I personally am working towards as is my department. In fact, PSPC has awarded 40 contracts to 31 self-identified indigenous businesses collectively worth $130 million just in the pandemic alone and we are working across government to ensure that that 5% minimum target is, in fact, reached.

[Rachael Thomas, Conservative, Lethbridge, AB]

Let me be clear. That's referring to your 2019 mandate letter from the Prime Minister. It stated that you were supposed to give 5% of all contracts to indigenous-led businesses, but you actually had that letter scrapped. Unfortunately, that goal wasn't met. A new mandate letter was given and it was just whitewashed, gone. No goals were set whatsoever for indigenous-led businesses. Why run from the problem rather than tackle it head on?

[Anita Anand, Liberal, Oakville, ON]

Actually you're wholly incorrect. That was not scrapped.