Government Operations Committee on Dec. 10th, 2024

[Garry Hartle]

Ms. Sultan said it was a “joint decision” with the contract authority. Give me just a minute while I get my notes here. I watched that and I was going to address it, but I ran out of time.

This is totally false. The contract authority, a lady named Karen Metzer, is a designated senior procurement officer. Her authority pertains only to administrative matters such as writing the contract, ensuring that the contractor adheres to the security provisions and processing the invoices for work completed. That's all of her authority.

Any decision on policy matters rests solely with the director general. She made the decision.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Hartle. That's our time.

[Garry Hartle]

Okay.

[The Chair, Conservative, Kelly McCauley]

We have a strict schedule that we have to keep to.

Mr. Kusmierczyk, please go ahead, sir.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you, Mr. Chair.

Thank you, Mr. Hartle, for your appearance here at committee today.

I want to ask you a few questions.

As of November 2024, there were 2,945 businesses listed in the indigenous business directory. Of those 3,000 businesses, 111 are indigenous businesses or joint ventures, representing about 3% of the total. In 2022, when ISC did a review of the indigenous business directory, they delisted 1,100 businesses. About 25% of the total were removed.

Can you comment on this step that was taken? Do you have any thoughts on that?

[Garry Hartle]

I have a couple of notes on businesses being removed from the IBD.

From 2017—

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Go very quickly, sir.

[Garry Hartle]

Each year, there were businesses dropped and added. The number always fell somewhere between 2,000 and 3,000 businesses, with new ones being added and some of them being dropped. It was explained that businesses would be dropped for various reasons, such as not responding or going out of business.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

One thousand were removed in the last review.

Is that number significant, in your opinion?

[Garry Hartle]

No. You know, there are years when you easily get 500, so going to 1,000 is not, to me, significant.

Don't forget that there was a spike when the 5% target was introduced. The government actively tried to get businesses to register in the IBD in order to meet the 5% target. Then they found that they'd been a bit overexuberant and that some of those people shouldn't have been included, so they took those out.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

I appreciate that. Thank you, Mr. Hartle.

In the interest of time, I have another question for you.

Are you familiar with the new Office of Supplier Integrity and Compliance, or OSIC, which was established by this government? It expands the grounds on which a business can be made ineligible or suspended. It broadens the number of violations that can be brought forward and the penalties that can be doled out.

[Garry Hartle]

Yes, I'm aware that the office was introduced, but I didn't look at the details. It is on my to-do list.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Now, this office was not around when you were doing audits, as I understand it, so the tools we've introduced to strengthen integrity and compliance, and the penalties that can be provided, were not available when you were doing your audits.

Is that correct?

[Garry Hartle]

That's correct.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

I think that was a major criticism regarding the previous Harper government. The integrity regime only had, at that point, a nuclear button. It could only react if a company was charged with or convicted of a crime, for example. Then the integrity regime kicked in. Now there is a much more nuanced and broader scope of violations that can be addressed, and many more tools for the integrity regime. Is that a fair assessment?

[Garry Hartle]

Well—

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Have things improved now?

[Garry Hartle]

Not really. If you proceeded with fraud investigations, it would have kicked in. Right now, you're perhaps in the same boat. If nobody moves on the result of the audit, how can it do its work?

However, the added tools are welcome.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Just to clarify, you mentioned that you did 100 audits per year. Were those 100 audits of federal programs?

[Garry Hartle]

They were of the PSIB program.

Don't forget, once ISC introduced the IBD as their own, we also did desk audits for them on the people already registered, in order to ensure that they maintained eligibility.

[The Chair, Conservative, Kelly McCauley]

Thank you, gentlemen.

We'll go to Mrs. Vignola, please, for two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Hartle, I want to quickly come back to the question I asked you earlier about whether striking a business from the indigenous business directory was a sufficient penalty to impose on a business that claims to be indigenous but isn't. You said no.

In your humble opinion, what penalty would be appropriate to impose on a non-indigenous business that claims to be indigenous or that abuses an indigenous business?

[Garry Hartle]

If your fraud investigation by the outside authority, like the RCMP, convicts them, manages to find them guilty or gathers enough evidence, then they should be barred from bidding on federal government contracts.

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

You provided us with a file on the Canadian Health Care Agency. In your opinion, what procedural gaps opened the door to what happened and the abuse you highlighted in your report?

[Garry Hartle]

In the pre-award audit, they didn't verify the claims by the bidder. When we started doing the post-award audit, we discovered that those documents were fraudulent. The gap is that maybe the pre-award audit was not extensive enough or was not conducted thoroughly enough.