Government Operations Committee on July 24th, 2024

[Yasir Naqvi, Liberal, Ottawa Centre, ON]

Thank you very much, Chair. I'm really happy to be back at OGGO to discuss a really important issue around procurement.

In fact, as I listened to both our witnesses, I had a moment of déjà vu in terms of how I, in my past life, used to practise procurement law—I'm from Ottawa. We're talking about, now, almost two decades ago in time, and a lot of the issues that are being discussed were things that I recall quite vividly, in terms of contracting, decision-making, those manuals with sub points that Professor Clarke talks about and trying to interpret what all these rules mean.

Then, very similarly, perhaps one could argue it's in other levels of government as well, whether it's provincial or municipal, because from my time in provincial politics, being a member of the Treasury Board of cabinet in Ontario, I had very similar conversations with officials about IT procurement: “What went wrong? Why did it go wrong? Why is it over budget? Why is it not producing results?” etc.

This is not something new, so I'm interested, not in exploring the problem but more in exploring the solutions. How can we improve our system so that we can get better value for Canadians and better products as well?

We talked a lot about your research and what you found—although I might add that it hasn't been peer-reviewed yet, as I understand, and that process is ongoing, so I'm sure that's going to make it even stronger—but can we talk a bit about what you found in your experience of looking at procurement systems internationally? For the first part of the question, did you find there are similar challenges when you looked at United States, the European Union, “like countries” like Germany, France or Australia? Did you find they have similar challenges? If so, can you summarize them for us?

Can you talk a little about solutions? What kinds of changes, if any, are being orchestrated in those jurisdictions that we should look at in terms of recommendations, the work that this committee is doing and what the federal government should be doing?

[Dr. Amanda Clarke]

Yes. That's great. I like placing this in an international context, because it has been interesting to see that the Anglo-Saxon cluster of governments, I'd say, has had a very similar trajectory at various stages of development in tackling the procurement issue.

I mentioned that the U.K. has done well in addressing these problems head on. We can definitely look to that jurisdiction. We can also look more broadly to countries that are now identified as having leading digital government services. This includes Ukraine, Finland, Singapore and Estonia, not countries that we have historically always looked to for practices around public sector governance. These jurisdictions are frankly nailing it when it comes to working with vendors. They all tell a very similar story about how they're managing that.

One, they're aggressively building their in-house IT expertise—to build in-house when it makes sense; to be better shoppers, as we've already described; to oversee and manage; and to ensure that when they work with vendors, those vendors want to send their A-team: We're going to be working with very talented technologists in government. I think this can be done through a mix of hiring and interchanges but also through training.

The other piece that I mentioned already comes up in interviews I've done with public servants globally on how they are managing vendors in their digital government efforts. They do often point to traditional public administration values and ethics. They have a culture of good governance. They're aware of the risks of conflict of interest, of cronyism and of revolving doors when they bring in technologists for, say, short-term stints working in government. They manage that by turning to classic tools of good public administration. They focus a lot on building kind of freeing internal rules, as we've already discussed, so that the public service can work in these modern ways themselves but also so that vendors can apply those methods when they work with the public sector.

Then there's a really big emphasis on modernizing procurement rules through such things as modular contracting, spend controls, stronger information disclosure and reporting, and prioritizing open source. There are also some really interesting ways of thinking about procurement as a policy tool. In certain jurisdictions, state IT procurement is tied to national economic development. This comes up a lot when you speak to Estonians or Finns. In Ukraine, for example, there's a real emphasis on the state trying to build an ecosystem of local vendors, having this economic growth opportunity attached to it and also making a more competitive marketplace that can bid for government work.

[The Chair, Conservative, Kelly McCauley]

Thank you very much. That is our time.

Mrs. Vignola, you have two and a half minutes, please.

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

Thank you very much, Mr. Chair.

Ms. Clarke, your October 2022 brief provides a list of controls that would prevent the current situation in Canada, where the majority of IT spending, 54%, goes to contracts above the $2‑million mark.

I have two questions for you.

First, how many of those contracts have led to successful projects?

Second, how many of those contracts have unknown results, for whatever reason?

[Dr. Amanda Clarke]

This is a great question. One area where we're really kind of frustrated with the data available is that we don't know whether those contracts led to value. We know from larger studies that larger contracts are more likely to lead to failure. Our assumption that those large contracts are problematic is based on that. That is also the rule that any other government that is doing well on digital is following.

So we don't know. We recommend in the paper adopting the open contracting data standard. These sorts of new ways of thinking about disclosure of contracting could include outcomes, which is really what you care about. If it cost $80 million, what did we get for that? This is an important question that we can't answer right now.

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

I'm going to ask you another quick question.

According to an article that I will quote from memory because I don't have the source in front of me, Mr. Wernick said that there were so many layers to this matter that the entire procurement system had to be dismantled and rebuilt from the ground up. He said it was corrupt and dysfunctional.

Should we go that far to solve the problem only to then go and create a new department of streamlined procurement?

[The Chair, Conservative, Kelly McCauley]

You have about 30 seconds.

[Dr. Amanda Clarke]

There is something exciting to say about doing a control-alt-delete on current rules and then starting from fresh. That could be quite nice. I think maybe that could be a good way to start. Certainly, I think looking first at some of that internal public servant work around reducing red tape could be a great first step to streamlining what the internal rules look like.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Ms. Blaney, you have two and a half minutes.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Thank you.

I heard very clearly that it's getting to be a problem to attract IT professionals who are very talented to the public service. Can both of you talk a little about why that is?

To follow up on the question I had last round, what does government need to do to make it safer for public servants to actually have the space to be innovative? It sounds like part of the challenge right now is that innovation is being blocked, so what needs to be put in place to nurture that rather than dissuade it?

[Sean Boots]

I think it's an excellent question. It's something that, in my own public service career, is very top of mind. How do we better enable public servants? How do we better empower them? How do we better equip them with tools?

As an outside-of-work side project, one of the websites I built several years ago was a website called "Is This Blocked in My Department", which is a crowdsourced list of, as a public servant, depending on which department you're in, whether you can use Zoom, Trello and all these different software tools that teams around the world use all the time but are often blocked or forbidden for public servants to use.

This is just an example of how risk-averse public service culture holds public servants back, and it means that they're working the same way that they might have worked in the 1990s, even though the rest of the world has moved on to much faster and more effective ways of working.

There are a few challenges. One is that public-sector IT salaries are competitive at the lower levels and really not competitive at the top. If you're just leaving a university or a college program to become a help-desk technician at the bottom level, that's a pretty good job, but if you're trying to hire some of the world's best cybersecurity experts, maybe you'll make $130,000 or $150,000 in the Canadian public service, and you'd make $400,000 Canadian working for a U.S. tech company.

Because technology professionals can move between jobs, companies and even countries so easily, it's really hard to hire people who are world-class professionals, and when you're delivering services that millions of Canadians depend on, it's actually very important. You don't need a thousand of those people, but you need five or 10 who are really good, and there's no mechanism for the federal public service to be able to do that right now.

The other challenge is that in government HR, the ability to move up the ranks without having to become a manager of other people is almost impossible. Even from the middle levels of the IT classification on up, you're expected to be managing a team, and that's the criteria you're judged on to be able to move even further up.

In modern tech companies, they realized decades ago that with your really great programmers and your really great cybersecurity people, you don't want them to stop doing that and spend all their time managing HR conflicts and approving people's leave requests. You want them to just keep on doing that craftwork that they're really good at. Modern tech companies have dual-track career progression frameworks, and those do not exist in the federal public service, so we're taking our best people and saying, "You're not going to touch a keyboard writing software for the rest of your career; you're going to manage a team of 40 people and deal with all the HR drama that ensues.” That means that even if we were to pay people more, if we're asking them to be people managers when they really want to be great cybersecurity people, great programmers or great designers, we're not letting them do that.

That's such an obvious fix that the Treasury Board has not done and has not prioritized, and that is just really at odds with how the rest of the industry has evolved.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Boots.

We'll now go to Mrs. Block for five minutes.

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

Thank you, Chair.

I join my colleagues in welcoming both of you back to committee. I know that you both have appeared twice, in November of 2022 and early January of 2023.

I just want to recapture what we learned from you back then. I think we knew there was an issue when we put the arrive scam issue on the agenda of this committee, but I think what I learned from you is that government relies heavily on IT vendors and management consultants and, as you stated again today, has done little to hire this expertise in-house and/or train public servants. We also learned that it is hard to measure value for money or even how successfully completed a project is because of the ambiguous nature of how we collect data, and, finally, that spending on external consultants is growing. Mr. Boots has provided some great data with regard to that.

You mentioned lucrative contracting opportunities for public servants. Mr. Boots, as a former public servant, does all this contribute to public servants contracting with the Government of Canada to do work that they should be paid for—

[The Chair, Conservative, Kelly McCauley]

I'm sorry, Mrs. Block. I have to interrupt you for a second. Can you move your mic up a tiny bit?

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

Sure.

My question is this: Does all this contribute to public servants contracting with the Government of Canada to do work that they are already being paid to do in-house or that they should be being paid to do in-house?

[Sean Boots]

Thank you so much. I think it's a really interesting question.

I would say off the bat that the situations we've seen in the news where public servants were simultaneously working for a department and then also running contracting companies was a huge surprise, because I don't think that's a normal occurrence. But what does seem very normal is that when you reach kind of the mid to end state of your public service career in IT, it's very normal to go work for a large IT company or for a large IT vendor, because you have a lot of pre-existing relationships with your colleagues and counterparts.

If you're a departmental chief information officer, you're probably never going to become an ADM, but you can make a lot of money going to go work for a large IT company. You're friends with all your other departmental CIOs who you used to work with. I think for those companies, it's very attractive for them to hire retired public servants who have a lot of previous connections. You see other things like large consulting firms running demo days, where they invite a lot of senior public servants to go see some cool things that new start-ups in Canada are doing while they also gather a lot of notes on what they will then pitch back to departments to sell them some new management or IT product or whatever.

You do see those sorts of patterns. One way to fight that is to make it possible, as I mentioned earlier, to have a more successful long-term career with market-competitive salaries while you're still in the public service. Of course, I have friends who have left the public service to go make triple their previous salary working for a large tech firm. I left the federal government and I work for a provincial government. I'm still a public servant. I'm paid exactly the same as I was in my old job, and I'm very happy to be able to play a role in having a public impact. But for other people in different situations, it's very understandable. They leave to make triple the salary.

It's hard to say no to tripling your salary. That's an appealing thing. That has consequences for this somewhat cozy relationship that you see in news articles between the super-large tech providers to government and the public service.

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

Thank you very much, Mr. Boots.

Chair, I would like to use the rest of my time to move a motion that I put on notice last Friday. I just want to read it—

[The Chair, Conservative, Kelly McCauley]

Let me interrupt for a sec. We'll distribute it to all the members right now.

Go ahead, Mrs. Block.

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

I'll read it into the record:

Given the Government has spent $9 million dollars of taxpayer money on a luxury condo located on “Billionaires Row” in New York City for the Consul General, the committee order Global Affairs Canada to produce a list, within fourteen days of this motion being adopted, of all properties including the addresses and listing prices of those that were visited or considered for purchase for the official residence of the consulate general in New York, and the committee call the following witnesses to testify:

Minister of Global Affairs, Mélanie Joly

Consul General of Canada in New York, United States, Tom Clark

The Deputy Minister of Global Affairs and other representatives from the department.

If I may, I would like to quickly speak to the motion that I just read into the record. I think what has come to light over the past few years under this government's procurement practices is extremely disturbing, but perhaps not surprising. Whether it has been the hundreds of millions of dollars going to Liberal insiders, or their friends at McKinsey getting special treatment in receiving government contracts, or former Liberal MPs and future Liberal leader hopefuls like Frank Baylis, whose company got a massive contract during the pandemic for ventilators that went unused.... It cost the government hundreds of millions of dollars, only to be sold as scrap metal.

We have seen the complete lack of spending controls on major procurements, including arrive scam. Every step along the way, this government has tried to cover up these consequences of their failed governance. We know that they voted against the audit of the ArriveCAN app, swearing that there was nothing to find—

[The Chair, Conservative, Kelly McCauley]

Mrs. Block, I'm afraid your connection is breaking up again. Maybe move your mic up a tiny bit.

We might have to ask you to finish up. Again, the translators are having trouble hearing you.

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

Thank you. I'll continue, and they can let me know if there's a problem.

[The Chair, Conservative, Kelly McCauley]

No, we're not able to hear you properly.

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

That is extremely disappointing. I don't know what I can do from my end.

[The Chair, Conservative, Kelly McCauley]

Unfortunately, the interpretation is not coming through at all. It's breaking up too much.

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

Thank you. I'll move the motion.