Government Operations Committee on Feb. 28th, 2024

[The Chair, Conservative, Kelly McCauley]

Thank you, everyone, for your patience.

We welcome Ms. Reza from PSPC.

I understand you have a five-minute opening statement. Please, go ahead.

[Arianne Reza, Deputy Minister, Department of Public Works and Government Services]

Thank you very much.

Before we begin, I would like to acknowledge that we are meeting on the unceded territory of the Anishinabe Algonquin nation.

As deputy minister of Public Services and Procurement Canada, PSPC, I am pleased to be here to discuss the Auditor General’s report on the development of the ArriveCAN application, as well as the findings of the procurement ombudsman on the same topic.

I’m joined today by my colleagues: Dominic Laporte, assistant deputy minister, procurement branch; Catherine Poulin, assistant deputy minister, departmental oversight branch; and Ron Cormier, director general, business and technology solutions sector.

Public Services and Procurement Canada is the government’s central purchasing agent, ensuring departments and agencies have the goods and services necessary to deliver on their various mandates.

In this role, among other things, my department establishes and administers central procurement tools, such as standing offers and supply arrangements. Client departments and agencies can then access these tools directly for their procurements.

In the case of ArriveCAN, PSPC provided procurement support to the Canada Border Services Agency to procure professional services that were used for many purposes, including to develop the application.

As this committee has heard, the procurement ombud found that certain practices related to the procurement of professional services were inconsistent with government policy and the government's commitment to fairness, openness and transparency. Eight recommendations from that report were addressed to PSPC. The Auditor General's report makes one recommendation that implicates PSPC, namely, that PSPC and the CBSA should ensure that tasks and deliverables are clearly defined in contracts and related task authorizations.

Mr. Chair, we are committed—and I need to underscore that word “committed”—to ensuring that the lessons learned from the reports of the ombud and of the Auditor General are turned into concrete actions to make certain that the deficiencies uncovered do not occur again. We have taken many steps. We have already introduced several new control measures that begin to address these recommendations.

In November 2023, PSPC temporarily suspended all delegated authorities to the departments and agencies, including those of CBSA, to authorize professional services-based task authorizations. Later in December, PSPC provided direction to its procurement officers to ensure that task authorizations include a focus on clear tasks and deliverables. Now, federal departments must formally agree to a set of terms and conditions to obtain access to select professional services methods of supply.

Key changes also include the use of new contract provisions to increase costing and subcontractor transparency and to provide important clarifications on the roles of departments when using these instruments. The intent is to improve consistency in practices. Our department is also updating its guidance to aid other departments in procuring effectively and responsibly when using PSPC procurement instruments under their own authority.

We recognize that there is a real and immediate need to strengthen specific areas of our procurement processes related to professional services.

We will continue to build upon the actions I’ve outlined today, to improve the Government of Canada’s procurement process and practices.

Thank you, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

I appreciate your coming back to OGGO once again.

We'll start with Mrs. Block for six minutes, please.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Mr. Chair.

Thank you to our witnesses for joining us today. We do look forward to being able to put some questions to you and to getting some answers.

Today, we learned from the media that your department withheld information from the minister on the overspending of ArriveCAN. My questions are being directed to Ms. Reza. It would appear that you did not brief the minister on ArriveCAN or on the scandal surrounding ArriveCAN.

Why was this left out of his briefing document?

[Arianne Reza]

Thank you very much for the question.

I believe that in July 2023, when the briefing material was put together, there was an extensive list of immediate topics that were coming forward, including some defence procurement, some health and safety around bridges and the McKinsey reports. There were many different pieces ongoing.

At that time, the AG and the OPO were starting to do their review, and it was in flight. It was considered perhaps in the first tranche and not the immediate. It became much more hot, once again, as the months progressed, and the minister was briefed accordingly.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

You left out a pretty pertinent issue that I believe any one of us as parliamentarians, were we in the minister's shoes, would have wanted to hear about.

When did the minister ask for a briefing on ArriveCAN? Just give the date.

[Arianne Reza]

We'll have to come back with a precise date. Over the fall of 2023, with the allegations of Botler, the various elements of the spending around ArriveCAN and the audits that were being done by the AG and the procurement ombudsman, more information was made available and more briefings were scheduled to his minister's office as well.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

When did you inform the minister of the cost overruns of ArriveCAN?

[Arianne Reza]

Thank you for the question.

We'll have to come back with a precise breakdown of timing. Again, the cost overruns and the budget of ArriveCAN are the CBSA's purview. We really looked at providing the background on the procurement vehicles that PSPC put in place for CBSA.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

While you've said that this fell under CBSA's purview, you provide oversight to every single department across government for procurement.

I find it really hard to believe that in July of 2023, when the $60 million cost of the app was already baked in, so to speak, you didn't think to bring this up to the minister. You can't even provide us with the date when he first asked for the briefing or when you advised him of this issue, knowing that you were coming to committee today and that we were going to be asking about ArriveCAN.

It's incredible to me that you didn't come prepared with more information about ArriveCAN and the involvement of your department, given what we heard from the Auditor General and the procurement ombudsman about the oversight that your department provides.

When did you brief the minister about GC Strategies? Again, we're talking about the two-person IT company that did no actual work on IT and got paid $20 million for ArriveCAN. Was he briefed on that?

[Arianne Reza]

Thank you very much for the question.

As the fall moved into November and December, and as more and more allegations were coming to fruition, in terms of getting ready to come to OGGO, briefings under...took place in terms of GC Strategies and ArriveCAN with the minister.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Can you just repeat that last part?

[Arianne Reza]

Sure. In preparation of our committee appearance—I believe it was in November—ahead of that, discussions were taking place, as I noted earlier, in terms of ArriveCAN and briefing the minister's office in terms of GC Strategies on the contractual elements.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

To be really clear, in July 2023, the minister is appointed. The price tag of $60 million is pretty much already baked in. We knew it was at least $54 million. We knew about GC Strategies because that had already been in the news. They had already been paid $9 million on ArriveCAN at that point.

The minister didn't ask for a briefing and you didn't provide one until November...?

[Arianne Reza]

Again, the minister arrived in July. Many different materials were provided, including on procurement, on defence procurement, on McKinsey and on many different topics that were in decision-making time from the fall—September, October and November.

From the time that the minister appeared in front of OGGO to discuss it, briefings were taking place in terms of GC Strategies; our contracting vehicles; PSPC's involvements, roles and responsibilities with his office; and then, more frequently with the minister.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

As the deputy minister, did you have a role in what went into the briefing binder for the new minister?

[Arianne Reza]

I wasn't a deputy minister at the time.

[The Chair, Conservative, Kelly McCauley]

That is your time.

We'll go to Mr. Jowhari, please.

Go ahead, sir.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair. I'll be sharing my time with MP Atwin.

Ms. Reza, in your opening statement you said that PSPC provided procurement support to the Canada Border Services Agency to procure professional services that were used for many purposes, including the development of the application.

Can you very quickly tell me what type of support your department provided?

[Arianne Reza]

Thank you very much for the question.

Very quickly, in the early days of the pandemic, in April and June 2020, the CBSA approached PSPC for assistance in terms of having IT specialist staff augmentation in-house to help them keep the border open across a variety of business lines. They noted low-value shipments, applications for travellers and, I think, cargo.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay—

[Arianne Reza]

The first few contracts and the first approach were for staff augmentation.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Very good. They were for staff augmentation.

It looks like that staff augmentation happened through GC Strategies. We all know by now it is a two-man shop, and it did not do any work.

However, my question for you is why the procurement processes are so cumbersome that we cannot have a process in place whereby the actual resources that will be doing the job, whose who were contracted by GC Strategies to come and do the job.... Why couldn't we reach out to them or they couldn't reach out to us to be able to do this job?

[Arianne Reza]

Thank you very much for the question.

Traditionally, staff augmentation works in a similar manner, whereby you bring in a temp agency and it takes on the burden of finding the resources. Given what we've seen in the various.... There are many shops that do this across the system, so there are about 635 IT firms that provide staff augmentation services. It is a competitive field. It is pre-qualified, and it is a tool that is constantly refreshed.

We're looking at other ways of doing that whereby we can have more direct access to resources, but in terms of efficiency and capacity, this has been the traditional method.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Yes, but can it be as simple as PSPC starting up a very comprehensive database of all IT resources, qualifying them and having them ready at its fingertips, so that it can do the same job as the two-man shop that charged 15% to 30%?

What is stopping PSPC from being able to do that?