Government Operations Committee on Oct. 17th, 2024

[The Chair, Conservative, Kelly McCauley]

Do you have a quick response, or would you like to get back to us in the next round?

[Joëlle Paquette]

I think it's on the value of the contracts, from what I've read. The 5% target is related to contract value, not to the number of contracts.

[The Chair, Conservative, Kelly McCauley]

We'll go to Mr. Bachrach, please.

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

Thank you, Mr. Chair.

Ms. Paquette, you mentioned the 5% target, but there remain serious concerns regarding the integrity of the business directory. Have you really met the target?

[Joëlle Paquette]

We have not met the target within PSPC, which I mentioned in the opening remarks.

What we are doing right now is making a lot of effort through engagement with indigenous businesses to see how we can meet the target—how we can find out a bit more about where they're able to be part of our procurement processes and how we can direct more of our procurements toward indigenous firms.

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

Maybe my question wasn't clear enough. It just seems like the 5% target is a box-ticking exercise, because PSPC does not have any concerns with the integrity of the directory or the definition of what an indigenous business is. It just takes, holus-bolus, whatever Indigenous Services Canada says is an indigenous business and tries to hit the target based on that list.

I think you would agree with me that if you hit the 5% target for indigenous procurement but the businesses that get the contracts aren't necessarily indigenous businesses, you haven't really hit the target.

[Joëlle Paquette]

We are following the rules set by the government to meet the 5% target. If we exceed it, we'll be happy.

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

Will you be happy about it if—

[Joëlle Paquette]

We are abiding by the rule that the IBD certifies these companies, and we need to use the IBD to identify the 5%.

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

Yes, and the challenge here, of course, is that there are major questions about the IBD, and they have been raised consistently over the course of this study.

It seems to me that PSPC is not concerned at all with the integrity of the directory. You're simply staying in your lane, ticking a box and trying to get to 5%, which is frustrating because the role of PSPC, as I understand it, is to ensure the integrity of government procurement generally across the federal government. It does seem in this case like PSPC is not fulfilling that role.

I'll move to the statement from earlier, in the last round, that Procurement Assistance Canada—

[The Chair, Conservative, Kelly McCauley]

Mr. Bachrach, I'm afraid we're past time, but you'll have another round. We can get to that then.

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

Thank you, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Next is Mrs. Block, please.

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

Thank you, Chair.

Just to follow up on my previous round, you keep saying that this program is run by Indigenous Services and that you have no oversight of the program. However, PSPC is required to award 5% of contracts per year to indigenous businesses through this program, which has a requirement that 33% of subcontractors be indigenous. Why is PSPC not verifying that this subcontracted work is being done by indigenous businesses?

[Joëlle Paquette]

We refer the information to Indigenous Services Canada and they can perform audits to ensure that companies are meeting the requirements and to maintain their certification.

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

Do you receive these audited reports to confirm that you are actually meeting the 5% target?

[Joëlle Paquette]

We receive those reports by Indigenous Services Canada and incorporate them into our files.

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

By not verifying the work being done by subcontractors, you are virtually admitting that your department is opening this program to fraud. When fraud is committed in government contracting, such as a business posing as indigenous to win a contract, is PSPC the department responsible for getting back the money once a company has been exposed as not being indigenous?

[Joëlle Paquette]

There are some contractual terms for managing the contract. If something happens and a company that was previously certified and met the certification no longer meets the certification once we've awarded the contract, and the contract is still live, then the clauses in the terms and conditions of the contract will come into play.

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

You could then get the money back.

[Joëlle Paquette]

I would not be able to say that we'd get any money back. It all depends.

They meet the certification at the time we put the contract in place. If at any time, once we put the contract in place, a company no longer meets the certification and we terminate, they have done work during that time and we owe them money for the work they've done.

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

In relation to the arrive scam scandal, PSPC stated that they could get the money back from fraudulent contracting. I'm not sure what you mean by a company meeting the certification when you award the contract and then somewhere along the line not meeting the certification if it has been verified that they are an indigenous business.

Can your department commit to reviewing the contracts awarded through this program and recovering any money spent on contracts awarded to non-indigenous businesses that were posing as indigenous?

[Joëlle Paquette]

I'm unable to answer that question because I don't know.

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

Okay. You don't know if you can do that.

We heard testimony yesterday about performative reconciliation. If the Liberal government is not recovering money, not referring things to the RCMP and not implementing measures to ensure that contracts actually go to first nation communities, is the Trudeau government guilty of performative reconciliation?

[Joëlle Paquette]

That's not something I'm able to answer. I'm sorry.