Government Operations Committee on July 23rd, 2024

[The Chair, Conservative, Kelly McCauley]

Good morning, everyone. I call this meeting to order. Welcome to meeting 132 of the House of Commons Standing Committee on Government Operations and Estimates.

Just as a reminder, please keep your headphones away from your microphones at all times. Try to leave them on the right-hand side of the circle.

We start with an opening statement by Mr. Mills or Mr. Laporte.

Mr. Mills, the floor is yours for five minutes. Please go ahead, sir.

[Michael Mills, Associate Deputy Minister, Department of Public Works and Government Services]

Good morning, Chair.

Before I begin, I acknowledge that we are gathered today on the traditional unceded territory of the Algonquin Anishinabe Nation.

Joining me today are Catherine Poulin, assistant deputy minister for departmental oversight; Dominic Laporte, assistant deputy minister for procurement; and Kirk Albert, acting director of special investigations and internal disclosure.

I would like to thank the committee for this opportunity to continue the discussion on the important issues around government contracting.

Public Services and Procurement Canada, or PSPC, is the federal government's central purchasing agent and, as such, procures goods and services on behalf of other departments and agencies when the value of their requirements are beyond their own contracting authority. PSPC is therefore responsible for the majority of federal contracting, but this is a collaborative relationship among departments and agencies, which are responsible for identifying what needs to be done, how it can be done and when it should be done. Ultimately, it is the responsibility of each department and agency to decide whether to seek expertise outside of the government instead of doing so by working in-house.

As the associate deputy minister of PSPC, I welcome the work of your committee and the findings of the Auditor General, the procurement ombud and others.

This work demonstrates that PSPC still has a long way to go to ensure that the procurement of information technology and business consulting services remains open, fair and transparent and that the processes are effectively administered.

PSPC is working with TBS to strengthen procurement, and here are some of what we are doing: implementing a government-wide requirement that departments explore whether internal resources can be used to perform the work required prior to initiating procurement processes; a new Treasury Board directive on the management of procurement to ensure managers are clear on their roles and responsibility in connecting with government contracting; communicating with departments on how we are strengthening procurement instruments; having a more robust challenge function on procurements; and implementing new mandatory procedures to ensure all contracting authorities retain contractual decisions on files, particularly for professional services contracts.

At PSPC, we're working to rethink the tools used for procurement. We're also working to move beyond national master standing offers. In the interim, we're taking steps to change how these non‑competitive national master standing offers are administered. This includes making sure that justifications are on file and a challenge function is exercised whenever any federal department or agency wants to use these non‑competitive instruments.

To this end, PSPC created a new dedicated position of chief of contract quality assurance and records compliance. This new function will ensure that critical elements of decision-making throughout the procurement process are properly documented. It will also focus on actively monitoring compliance with procurement policies, procedures and best practices.

To further safeguard the integrity of federal procurement, this spring PSPC launched the new office of supplier integrity and compliance, which allows the government to better respond to misconduct and wrongdoing.

As you can see, PSPC is working hard to modernize procurement in order to make it simpler, faster and digitally driven. The focus for all of us is on driving value through competition.

When our client departments need IT or professional services, we want to ensure that they have procurement processes that deliver the most capable resources at the best value. We are implementing actions to respond to the results of audits and reviews of procurement in order to improve procurement and ensure value for money for Canadians.

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Mills.

We start with Mr. Barrett for six minutes, please.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Clara Visser, a government contractor, was recently charged for committing $250,000 in fraud under your watch. Can you tell us what the name of her company is and for which projects she worked?

[Catherine Poulin, Assistant Deputy Minister, Departmental Oversight Branch, Department of Public Works and Government Services]

Thank you for the question.

I don't have this information on hand. I don't know the name of her company or what contracts were used by Clara Elaine Visser.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

You don't know. None of the witnesses here today know the name of her company or the projects she worked on.

[Catherine Poulin]

Ms. Visser was awarded several contracts through several prime contractors on behalf of several federal government departments and agencies. However, I don't have the details of these contracts on hand today.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Is that information you'll undertake to provide to the committee in writing?

[Catherine Poulin]

We can certainly check our records and see what we can provide for you in this regard.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

To be very clear, the name of the prime contractors, the name of her company and the projects she worked on is the information that we're looking for—and, of course, your department has those records. You said that you'll see what you're able to provide. Of course, PSPC is able to provide the name of prime subcontractors and the contracts they work on. Is that not correct?

[Catherine Poulin]

Yes, exactly. We'll check our records and send you the necessary information.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Yes, I must say it's disappointing that you come to the government operations committee today not equipped with information that, of course, is in the public interest and would be relevant to questions we would ask. It doesn't speak to transparency. We find ourselves in this place only by virtue of answers being demanded by Conservatives at committee.

Are you able to tell us how many more cases of fraud—the number, aside from Ms. Visser—have been reported to the RCMP?

[Catherine Poulin]

Thank you for the question

As our minister announced in March, three cases of fraudulent overbilling were referred to the Royal Canadian Mounted Police.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Does that include Ms. Visser?

[Catherine Poulin]

Thank you for the question.

These cases don't include Ms. Visser's case, which was referred to the Royal Canadian Mounted Police in fiscal year 2022‑23. This was the first case of fraudulent overbilling that we referred to the RCMP. In 2023‑24, we referred three new cases to the Royal Canadian Mounted Police. These three cases were announced by the minister in March.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

In addition to Ms. Visser, is there a number greater than zero of cases that were referred to the RCMP before this spring? Answer yes or no, please.

[Catherine Poulin]

Sorry, but I must ask you to repeat your question. I didn't quite understand the nature of the question.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

How many cases, other than Ms. Visser's, were referred to the RCMP before this year? There were three this year and Ms. Visser's case in a previous fiscal year. How many others were there in addition to that? A number....

[Catherine Poulin]

There weren't any other cases. The first case of fraudulent overbilling referred to the Royal Canadian Mounted Police was Clara Elaine Visser's case. We then referred three new cases to the Royal Canadian Mounted Police in 2023‑24.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Have the RCMP contacted PSPC regarding criminal investigations of consultants that were not referred to them by you, investigations they initiated on their own or were initiated by complaints from other sources?

[Catherine Poulin]

Thank you for the question.

As far as I know, the Royal Canadian Mounted Police hasn't contacted us about the cases referred to in your question.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

How much money is suspected by your department as having been given out to fraudsters or been the subject of fraud? You say there are three other cases. What's the total value of the suspected fraud?

[Catherine Poulin]

Thank you for the question.

It would be difficult for me to establish an estimated amount of fraud. As we know, the nature of fraud is to remain hidden and to avoid detection. Without looking at each case individually, it's extremely difficult. I know that international and other government organizations say that fraud could account for 0.5% to 5% of spending. However, I could only establish the amount of fraud on a completely hypothetical basis.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Which departments are affected by the cases that were referred to the RCMP?

[Catherine Poulin]

Thank you for the question.

First, no department is immune to this type of fraud. That said, I think that we heard that 36 departments and agencies were affected—