Evidence of meeting #7 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 equipment.
A recording is available from Parliament.
Assistant Deputy Minister, International Platform, Department of Foreign Affairs, Trade and Development
Mr. Chair, I think that's a question for PSPC.
Acting Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
Thank you, Mr. Chair.
I believe the answer to that question is no. I will turn to my colleague, Catherine Poulin, to get confirmation.
Catherine Poulin Director General, Integrity and Forensic Accounting Services, Department of Public Works and Government Services
Thank you for the question.
You are right; the answer is no. We are aware of the allegation, but we haven't found any charges nor convictions associated with those behaviours listed in the policy.
Subsequent—
NDP
Matthew Green NDP Hamilton Centre, ON
How would you go about investigating whether bidders have been convicted of offences specified by this policy?
Director General, Integrity and Forensic Accounting Services, Department of Public Works and Government Services
We do some verification. Throughout those verifications, we haven't found any charges nor convictions under one of the offences listed in the policy. Consequently, Nuctech has been found not to be ineligible to be awarded that contract.
NDP
Matthew Green NDP Hamilton Centre, ON
Okay.
We talked a little bit about subsidies. There's been an ongoing debate about China's role in the world. There's been a lot of red-baiting and a lot of really problematic framings around China, particularly from some of my Conservative colleagues who have a new-found disdain for the way that they run their economy.
Through you, Mr. Chair, would anybody care to comment on Canada's obligations as it relates to FIPA in allowing for broad bidding from countries like China? I'm hearing in some of the rhetoric that they should automatically be excluded from bidding on contracts, yet it was our Conservative friends who entered us into a 30 year-plus contract.
Assistant Deputy Minister, International Platform, Department of Foreign Affairs, Trade and Development
Mr. Chair, I don't know to whom the question would be best served—
NDP
Matthew Green NDP Hamilton Centre, ON
It would probably be PSPC. We are in a global trade agreement. I'm hearing a lot of really derogatory comments as it relates to China and its essentially state-run capitalism, yet it doesn't seem to be the same frame that was used not too long ago when the Conservative government entered into a long and ironclad agreement with China.
What would it cost us to try to end any kind of bidding processes from the People's Republic of China under FIPA?
Acting Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
Thank you for the question, Mr. Chair.
I'll admit that I'm not very familiar with FIPA. I will say that we have obligations in terms of trade agreements with numerous countries around the world, including with the World Trade Organization. Our approach in terms of procurement has been that unless there are specific needs or requirements, particularly in the area of security, our default is to open federal procurements to the international community.
I can't quantify what the cost would be. What I can tell you is this. Companies that are not happy with the way that procurement is done have the option of turning either to the Canadian International Trade Tribunal or to the federal courts in instances where we undertake procurements that are not aligned with our legal obligations or with our trade obligations.
NDP
Matthew Green NDP Hamilton Centre, ON
Again, taking the subject matter of Nuctech and setting the personal opinions on it aside, when you talk about subsidies, how would state subsidies in a company like Nuctech differ from the subsidies we provide to, say, oil and gas?
Conservative
The Chair Conservative Robert Gordon Kitchen
If we can have a very quick answer on that, I'd appreciate it.
November 18th, 2020 / 4:50 p.m.
Acting Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
I'm not sure we could answer that question. I think the issue of subsidies is a fairly complex one.
As I was mentioning, I think a lot of different countries use a lot of different approaches or mechanisms to be able to support domestic industries, which are the subject of ongoing discussions at the World Trade Organization and other international fora.
NDP
Matthew Green NDP Hamilton Centre, ON
Thank you for the contribution.
I will note that I'm still having some audio troubles with the feedback and the echoes.
Conservative
The Chair Conservative Robert Gordon Kitchen
Thank you, Mr. Green. We're trying to keep an eye on that.
Ms. Poulin, if you have to speak again, could you move your microphone up just a touch? That might be helpful. Thank you.
We're now going into our second round, and we'll go to Mr. McCauley.
Mr. McCauley, you have five minutes.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Thanks, Mr. Chair.
Thank you, witnesses.
I have to ask, why was a national security exemption not used for this? We've seen the government use it for paperclips, photocopy paper, jackets. Why not use it for something as vital as this?
Assistant Deputy Minister, International Platform, Department of Foreign Affairs, Trade and Development
Mr. Chair, I think that gets to the heart of this question here. It wasn't, because we applied the tests we've always applied when we've bought equipment that doesn't plug into our network. It—
Conservative
Kelly McCauley Conservative Edmonton West, AB
They just didn't consider it a security issue.
Okay, I'm going to move over to CSE. How would Nuctech have received a security clearance?
Anyone can answer that.
Director General, Partnerships and Risk Mitigation, Communications Security Establishment
Thank you for the question, Mr. Chair.
I think that would be more appropriately answered by the industrial security folks at PSPC, as CSE is not actually involved in that.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Okay, Mr. Ieraci, how would a company that's owned by the Communist Party—it's a state-owned company—have received a security clearance?
Claude Kateb Acting Director General, Industrial Security Sector, Department of Public Works and Government Services
If you'll permit me, Mr. Chair, I'd be happy to answer on behalf of Mr. Ieraci.
Conservative
Acting Director General, Industrial Security Sector, Department of Public Works and Government Services
Very quickly, we did not clear that company. We clear the industrial security sector, and contract security program clears Canadian companies. Nuctech does not hold a security clearance with the Government of Canada.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Oh, I thought I heard Mr. Danagher say that they passed a security clearance.
Would something like this not require a security clearance on such a bid?
Acting Director General, Industrial Security Sector, Department of Public Works and Government Services
As others have noted, our services in the contract security program are triggered when a security requirement is identified for a procurement. In this particular case—
Conservative
Kelly McCauley Conservative Edmonton West, AB
I find this whole thing stupefying. Something like this being overlooked and overlooked and overlooked is mind-boggling.
The CSE just came out with their cyber-threat assessment report—I think it was today—highlighting a lot of issues with state-owned actors, naming China and Russia for the first time.
How could the information that would have been gained from this equipment been gathered from our embassies and the CSE not have a concern about this?