Government Operations Committee on Oct. 17th, 2024

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

Has PSPC ever expressed concern about the integrity of the list or the use of shell companies or any of the really troubling concerns that have been raised over the course of this study?

[Joëlle Paquette]

Our responsibility is to have discussions through Procurement Assistance Canada with indigenous firms, and they provide some information. Then we make sure they are in contact with Indigenous Services Canada. Those discussions are happening over there, not with PSPC.

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

It just seems unusual, because in our discussions with PSPC about procurement more broadly, PSPC has taken a very proactive role when it comes to the integrity of government procurement to ensure that fraud isn't taking place and that there are checks and balances along the way. It seems that with indigenous procurement, PSPC takes a very hands-off approach and really defers to Indigenous Services Canada when it comes to the registration of businesses.

Is that a fair characterization?

[Joëlle Paquette]

Indigenous Services Canada sets the rules and definitions. They own the IBD and they're the ones managing the PSIB program. The departmental oversight branch is responsible for the integrity of procurement, and we have certain clauses within our contracts on that and there are certain rules. Before putting our contracts in place, we have to go through the departmental oversight branch to validate that a company meets the integrity measures set by the departmental oversight branch. We also have clauses in our contracts relating to the code of conduct and to conflicts of interest so that if ever something does come about, we have ways to remedy our contracts, either through termination or other means.

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

Those integrity measures do not include the question of whether they are indeed indigenous businesses. Is that correct?

[Joëlle Paquette]

I believe so.

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

Procurement Assistance Canada is trying to recruit indigenous businesses to get them to register with the directory. Can you highlight Procurement Assistance Canada's work in northwest B.C. specifically?

[The Chair, Conservative, Kelly McCauley]

We're a bit past our time, but you can give a brief response. Otherwise, we can get to it in the next round.

[Clinton Lawrence-Whyte]

We do events throughout Canada, and we focus on B.C. We work very closely with regional partners to make sure that indigenous businesses are made aware of our services and that we can help them get ready to participate actively in federal procurement. We have had successes in terms of indigenous businesses participating.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

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

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

Thank you, Chair.

I'm going to start by reconfirming what I think I've heard in testimony from our witnesses this morning when it comes to the role of PSPC and the indigenous set-aside. As the procurement department for the Government of Canada, PSPC has testified that it does not have any oversight of a list of vendors that are required to meet certain criteria to qualify for the indigenous set-aside.

We know that various departments have the authority to award contracts, yet it seems that every time PSPC.... Over the last couple of years, as we've undertaken various scandals, we've seen within the Government of Canada and procurement that glaring mistakes have been made, and they have resulted in the government misspending tens of millions of dollars.

Under whose authority are departments given the ability to award contracts directly?

[Joëlle Paquette]

The Treasury Board Secretariat outlines the policies, so they're responsible for the directive on the management of procurement.

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

After widespread reports of abuse and fraud and the use of shell companies, is PSPC at all curious about getting to the bottom of that?

[Joëlle Paquette]

As I said, PSPC, through Procurement Assistance Canada, continues to have discussions with various indigenous businesses and listens to what they have to say. It will then refer them to the right area within Indigenous Services Canada to make sure they are aware of any issues and can work through some of its policies, which direct PSPC to have a 5% procurement target for indigenous firms.

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

You're directed to have a 5% target, yet you are not responsible for ensuring that the target is actually being met in contracts going to indigenous businesses.

PSPC is not prepared to step in to deal with the failures of this program and ensure that money meant for indigenous businesses is going to indigenous businesses. Is that what you're telling us here today?

[Joëlle Paquette]

What I'm telling you is that Indigenous Services Canada is responsible for the PSIB program and is responsible for the IBD. They are working with indigenous communities to manage the IBD and possibly make changes to it, but PSPC must follow the rules set by TBS and ISC in relation to the 5% target, to put some of their contracts in place with indigenous firms.

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

With all due respect, I believe PSPC does have a responsibility to ensure that taxpayers' money is being spent effectively and efficiently, and if I were seeing reports about this kind of abuse within a program, I would be sounding the alarm and trying to figure out how it could be addressed.

I want to get back to the issue of subcontracting. Recently, the procurement ombudsman launched a broad review of government procurement, specifically of the practice of bait and switch. This follows on the heels of revelations that your department has allowed companies to engage in the bait and switch in the resources that work on their contracts, with no repercussions.

You talked a bit about subcontractors earlier in response to some of my colleagues' questions. If you are not monitoring the subcontractors, how can we trust that this program, which is supposed to award contracts to indigenous businesses, is actually working the way it's meant to?

[Joëlle Paquette]

In our procurements, when we have a prime contractor, we are incorporating certain measures. The prime contractor is the one we have a contract with. They have subcontractors, and they are obligated to incorporate measures for a subcontractor that are similar to those in their prime contract with the Government of Canada, but we do not manage subcontractors at PSPC.

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

I believe that's a problem.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Mr. Bains, we'll go over to you.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you, Mr. Chair.

Thank you to our department officials for joining us today.

I know there's been a lot of discussion on the business directory of indigenous partners. Do you think transferring the directory away from the Government of Canada will lead to more integrity in procurement practices?

[Joëlle Paquette]

I am not able to answer that. I don't know.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

In the current context, would it be harder for indigenous businesses to be competitive with non-indigenous businesses when bidding for contracts if they were restricted to a narrower pool of resources to draw from?

[Joëlle Paquette]

I'm not sure I understand the question.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Let's say the business directory is managed or organized outside. Would there be fewer resources from the Government of Canada to manage the business directory or at least add members to it?