Government Operations Committee on March 20th, 2024

[Jean-Yves Duclos, Liberal, Québec, QC]

Shared Services Canada has two responsibilities. The first is to provide essential services for this kind of digital infrastructure and technology. In fact, that's true for a host of other services provided by other departments. Shared Services Canada is there to provide platforms and essential services. The second is that Shared Services Canada can also provide its technological expertise. However, in some instances, that's not necessary. It's up to the department to determine whether that is desirable.

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

Does PSPC have oversight of the awarding of contracts for the development, implementation and testing of the CARM system? Will it be similar to ArriveCAN, where, even though PSPC said that that wasn't how things were done, that was how things were ultimately done? Is that where this is headed?

[Jean-Yves Duclos, Liberal, Québec, QC]

There are two parts: contracts and work.

When it comes to contracts, PSPC obviously has a role and a responsibility to assume. It must ensure that procedures are followed and validate the work being done by the other department involved. Sometimes, PSPC must play the devil's advocate. That's what the contractual part is about.

As far as the operational side is concerned, that's up to the departments involved, of course. PSPC is not equipped to handle operations for each of the other departments.

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

Thank you.

Very quickly—

[The Chair, Conservative, Kelly McCauley]

I'm afraid that is our two minutes.

Mr. Bachrach, go ahead, please.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

Minister, in 1994, the then Liberal government placed a moratorium on the closure of rural post offices. The minister at the time said, “As long as this Government is in power, no rural post office will be closed.” Is that moratorium still in place?

[Jean-Yves Duclos, Liberal, Québec, QC]

It is.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Okay. The Canadian Postmasters and Postal Assistants Association has shared with me that since the moratorium was put in place, we've lost 380 post offices across the country, many of them rural post offices.

How is it possible that there's a moratorium on the closure of post offices, and yet we've lost 380 post offices?

[Jean-Yves Duclos, Liberal, Québec, QC]

I'll mention a couple of things.

First, as you just said, the moratorium is still in place. Second, Canada Post is an independent Crown corporation, so it's at arms length of political interference. It would be inappropriate if the minister—

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

This is specific to the mandate that the government sets. This doesn't have to do with Canada Post. This has to do with whether Canada Post is following the mandate that the government has set for them.

[Jean-Yves Duclos, Liberal, Québec, QC]

Third, it's the responsibility of Canada Post to follow that mandate. Fourth, we do know, and we do hear from Canada Post, that there are some circumstances—it could be the death of a particular worker, it could be a disease, it could be a fire, it could be other things—that make circumstances difficult. Through engagement with the community, there are avenues and solutions that are being put in place to make sure that the post is delivered despite the challenges that the community is experiencing.

Through that—although, as you said, it's a moratorium—it has to be applied in a manner that is best supportive of the needs of the particular community.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Here's what's actually happening, in my experience. There are Canada Post post offices, with unionized Canada Post staff, and when, say, there's a fire or a death or another reason that this model is no longer possible, Canada Post pushes to privatize those locations and contract out those services. Once those services are contracted out, there is no obligation to consult the community when you go from a privatized post office to a mailbox on the side of the road. We've seen that trend across the country, in violation of the mandate that your government set.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Bachrach.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Go ahead, Mr. Brock, please, for four minutes.

[Larry Brock, Conservative, Brantford—Brant, ON]

Minister Duclos, GC Strategies, the notorious fraudster two-person so-called consulting company, working out of their basement, received close to $20 million in taxpayer money during the ArriveCAN scam scandal. We know that 635 other consulting companies, middlemen, have engaged directly with the Government of Canada for procurement purposes.

Have you done an examination, sir, of those 635, to know how many are situated like GC Strategies, with two people, three people or four people working out of their homes?

[Jean-Yves Duclos, Liberal, Québec, QC]

There are two different things here.

First, these audits occur all the time. There are auditing teams and offices in many departments, including, obviously, within PSPC, to check whether there are frauds or inappropriate information or information not being stored, shared or used. This is the type of work that is done every day by many departments.

The second thing, as you saw today, is that there are instances in which we do find fraud. If there is fraud, then there is action taken, and there are consequences for those who try to defraud Canadians.

[Larry Brock, Conservative, Brantford—Brant, ON]

But Minister, there isn't immediate action. This government is notorious for being reactionary as opposed to taking proactive steps to weed out the fraud.

Why did it take the Auditor General to release her report, the procurement ombudsman to release his report and, according to your statements, a few tips to the government for you to create yet another level of bureaucracy to do exactly what you've been mandated to do?

Your ministry is mandated to weed out the fraud as it's happening. Why did we have to wait upwards of six years to identify this one company, which goes back to 2018? Why did it take six years to identify these fraudulent billing practices?

[Jean-Yves Duclos, Liberal, Québec, QC]

Let me come back to that in a moment.

First, the announcement this morning would show that we have more and more tools to detect fraud and to seek the consequences that come with fraud.

Second, you spoke to the Auditor General's and the ombudsman's reports. Those reports came in January. In November, the contracts with GC Strategies were suspended, which was several months before that.

[Larry Brock, Conservative, Brantford—Brant, ON]

It was after a complaint was received by the CBSA, not because of any due diligence by you, sir, or any due diligence by any other of your ministerial colleagues or any due diligence by the CBSA ministry itself. It happened as a result of a complaint, so that's another example of a reactionary move.

You talk about processes, but the process is not working, sir, so what confidence should Canadians have with this new level of bureaucracy moving forward to actively weed out bad actors? This is taxpayer money that you were mandated, sir, to preserve and to safeguard. There has been nothing but example after example of complete fraudulent misuse.

What assurances can you give Canadians, Minister?

[Jean-Yves Duclos, Liberal, Québec, QC]

First, on evidence or action, whenever there is evidence, there needs to be action, and you've seen this in the last few months. There was evidence produced, and there was immediate action. In many cases, that action doesn't require waiting for more evidence.

Second, you saw the announcement this morning. This is not additional bureaucracy. The office of supplier integrity and compliance is going to be provided with lots of preventive tools—

[The Chair, Conservative, Kelly McCauley]

Minister, I'm sorry; I have to cut you off in order to get you out on time.

Mr. Sousa is up next. Maybe you can finish your answer under Mr. Sousa's time, but I am trying to get you out the door on time.

Mr. Sousa, go ahead, please.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Minister and your team, thank you very much for being here, and I appreciate a lot of the work you have been doing.

I recognize that the modernization of pay transactions, the defence procurement that you've been heavily involved with over the course of the year that you've been part of, the national shipbuilding strategy, the Canada Lands Company for affordable housing and other enablements are great initiatives that you've put forward, as are the national capital assets that need to be confronted, and, of course, more importantly, you've identified issues of modernization and renewal.

I get it. I know that major cuts by the former government didn't help in terms of some of the issues that are prevalent today. When you have card-carrying Conservatives double-dipping in procurement, as they have been and as was found out yesterday, we have to take measures to correct those.

Minister, I commend what you and your team have been doing. I want to give you the opportunity now to discuss some of the methods of detection, the investments being made, the modernization around procurement and the office of supplier integrity and compliance measures, which you have identified, and what it is that we're doing going forward.

[Jean-Yves Duclos, Liberal, Québec, QC]

Thank you, Charles.

Let me start with housing. A few weeks ago, we announced that Canada Lands Company will be creating almost 3,000 new houses, new homes, in the next year, and 26,000 in the next five years. Out of these 26,000 new homes in the next five years, 20% will be affordable homes. Roughly speaking, then, about 5,200 affordable homes will be built by Canada Lands Company in the next five years.

That compares with a total of 1,100 affordable homes in the last 25 years built by Canada Lands Company. You can see how effective Canada Lands Company and other organizations within the federal government can be when we give them the power, the tools, the incentives and the mandate to do good things for Canadians.

Let me speak to the announcement this morning again. This is good news. We're in 2024. We have data analytic abilities that we didn't have just a few years ago. When COVID-19 started, a very small proportion of contracts went through electronic procurement. Now about 98% of contracts go through electronic procurement. This is obviously very good for the efficiency and the equity of the procurement process. People have more access to information. It increases competition and gives better outcomes at a lower cost for Canadians. This is all very, very good, but it's also good because in 2024 it provides the government with an ability that wasn't there just a few years ago to detect fraud.

Those things don't happen by chance. You need to invest in those things. That's why, just a few months before the pandemic started, we decided in 2018 to invest in electronic procurement, in a type of tool that we will now be able to use with the office of supplier integrity and compliance, as we announced this morning.

These things are possible, but they don't happen automatically. You need to invest in them and then to make use of them, as we'll be able to do in the next months and years.

We spoke earlier to the three cases that we've already been able to detect and pursue, but then there will be more. Not only will there be more, but there will also be the signal to possible fraudsters who might want to commit fraud in 2024 that they should be very, very prudent. We have the tools now to detect and monitor their activities that didn't exist just a few months ago.

[The Chair, Conservative, Kelly McCauley]

Thank you very much. That is our time.

We will suspend briefly to change everything over.

Apparently we'll have bells in about six to 10 minutes on closure on Bill C-29. I will seek unanimous consent right now that we will continue as we did before and vote virtually as we did before.