Evidence of meeting #35 for Government Operations and Estimates in the 43rd Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pandemic.
A recording is available from Parliament.
Conservative
Rachael Thomas Conservative Lethbridge, AB
Are you able to give any insight as to why some categories were kept and some were scrapped when it came to the risk assessment that was done? Was any sort of justification provided to you as the Auditor General?
Auditor General of Canada, Office of the Auditor General
I'm sorry, but I'll have to ask one of my team members to talk to that level of detail.
I don't know if Milan or Jean want to join in.
Director, Office of the Auditor General
We looked at the process the department had in place.
When we do audits, we look at what was supposed to be done and then follow the key parts of that process. Of course, when you're talking about a procurement process, you're talking about dozens and dozens and perhaps hundreds of checks and balances. We picked those that were key for the circumstance and that we could follow so that we could provide an audit level of assurance for the 39 contracts that we examined, which gave us a representative sample for the four types of PPE and equipment we examined.
Conservative
Rachael Thomas Conservative Lethbridge, AB
Are you able to shed light on why, when that determination was made, certain categories were chosen as the priority?
Auditor General of Canada, Office of the Auditor General
Again, I believe the member should ask that question of Public Services and Procurement Canada.
Conservative
Rachael Thomas Conservative Lethbridge, AB
Okay. That's no problem. I guess I'll go to another question that you can perhaps shed some light on.
Do you think this category should be kept within the consideration when a risk assessment is being done, regardless of the nature of it, pandemic or not?
Auditor General of Canada, Office of the Auditor General
For the categories, what is decided really does depend on the circumstances. It is a call made based on the supplier and the circumstances. I think that was, again, a judgment call the department made, and you should ask them about it.
Conservative
Rachael Thomas Conservative Lethbridge, AB
Could you make any recommendations on how to ensure that we do not continue to procure equipment that may be from forced labour camps, let's say, such as those existing within the Uighur population in China?
Auditor General of Canada, Office of the Auditor General
I obviously think the right checks and balances need to be done to make sure that the federal government procures things in a fair way from reputable organizations and that they get value for money. In the middle of a pandemic they made certain judgment calls, and I believe you should ask them about those judgment calls.
Conservative
The Chair Conservative Robert Gordon Kitchen
Thank you, Ms. Harder.
We'll now go to Mr. MacKinnon for five minutes.
Liberal
Steven MacKinnon Liberal Gatineau, QC
Thank you very much, Mr. Chair.
Thank you to the Auditor General and her colleagues for once again being with us today.
I want to extend my recognition for the emergency work of all the procurement officials and those who have mobilized in the face of the pandemic. It's remarkable. So is the fact that the Auditor General was able to mobilize so quickly and conduct such a thorough examination on short notice. Hats off for that.
About 2.7 billion items of PPE were procured through about 400 contracts. You say you examined a representative sample of those contracts, and in your view the department gets a pretty robust and positive score. Would that be a fair characterization of your report?
Auditor General of Canada, Office of the Auditor General
Are you talking about Public Services and Procurement Canada?
Liberal
Auditor General of Canada, Office of the Auditor General
As I said, we looked at a fraction of the contracts. We looked at 39 because we were targeting contracts that included one of the personal protective equipments that we scoped in. While the process wasn't perfect—because we had recommendations—I believe that some of the risks they took were reasonable in the context of securing personal protective equipment in a market where supply was not often keeping up with the demand. The country needed to get to the table to get personal protective equipment. In those circumstances, it was a reasonable approach.
Liberal
Steven MacKinnon Liberal Gatineau, QC
I've seen a lot of Auditor General reports. I've seen some bad ones and I've seen some good ones.
In this one, you do underscore the notion of risk and that the department demonstrated some continuous improvement, even on short notice, in executing against these risks in what was a very chaotic global marketplace for this material. Is that not true?
Auditor General of Canada, Office of the Auditor General
I think we were balanced. We clearly noted that the national emergency strategic stockpile was not ready and that the Public Health Agency had not acted on issues that it had known about for decades. We then saw during the pandemic the reactive response that helped meet the needs of provinces and territories. It showed collaboration between the provinces, territories and federal departments. I think it was a balanced report.
The fact remains that action needs to be taken on those long-standing issues.
Liberal
Steven MacKinnon Liberal Gatineau, QC
I believe the department has indicated that it will take those actions.
That's a question.
Auditor General of Canada, Office of the Auditor General
Yes, they have. They committed to taking actions in 2010, 2013 and now again. I do hope they do that.
Liberal
Steven MacKinnon Liberal Gatineau, QC
I'm referring specifically to the process of procurement.
Let's examine this notion of risk a little bit. Let's remind ourselves of the situation in March 2020, in which we had global shortages and stock outages of PPE. A lot of emergency stockpiles around the world were finding themselves in a bad way, and really only one country of origin dominated the market for this equipment.
As you went through all of these contracts, Madam Hogan, you concluded that the department acted with dispatch with the appropriate level of urgency and also, to the extent that was possible, that it balanced that risk by applying appropriate controls at various stages of the process. Is that an appropriate characterization of your report?
Auditor General of Canada, Office of the Auditor General
I believe that Public Services and Procurement Canada took reasonable risks but, as I said, not always in a good way. It wasn't perfect. There were some recommendations, for example, to ensure that financial viability be done whenever pre-payments are made on a contract. Even though you need to balance speed and risk, there are some basic elements that I believe should be done.
Liberal
Steven MacKinnon Liberal Gatineau, QC
Is a once-in-a-generation global pandemic the appropriate time for government to take appropriate risks?
Auditor General of Canada, Office of the Auditor General
I believe, given the marketplace, that moving to mass bulk procurement in order to help respond to the needs was very responsive, and that the risks we saw taken in the contracts we evaluated were reasonable in the circumstances, yes.