Government Operations Committee on Oct. 3rd, 2022

[Patrice Nadeau]

Maybe I can start on that one. Thank you, Mr. Chair.

Actually, you're right. It terms of professional services where typically we have resources on a per diem basis, even if contractually there's no transfer of knowledge in the contract, the reality is that they actually work as a team. Very often the nature of our business is such that those consultants offering professional services are actually part of a team. They work together with government employees. During the time they are here, this transfer of knowledge is actually taking place. We have witnessed that. This is probably where this transfer of knowledge—

[Majid Jowhari, Liberal, Richmond Hill, ON]

I apologize. Am I right to understand that there is no actual contract for knowledge transfer, but the knowledge transfer takes place as the project is rolling out by working side by side with our clients? Am I right to understand that?

[Patrice Nadeau]

It would be both. I was specifically talking about professional services on per diem basis, where it's a managed service or a contract was put in place for a project. Very often there is a provision in there for a transfer at the end, especially if what was outsourced was the creation, the build part, and then it's taken over by government employees. There will be a part where a transfer will take place at the end, but specifically for professional services, I would say that most of this transfer takes place day to day as we work together as part of the same team.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Nadeau.

We'll now go to Ms. Vignola for two and a half minutes.

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

Thank you very much, Mr. Chair.

I’m not sure where I should direct my question, but I suppose I could direct it to the Department of Public Works and Government Services, since it involves contracts.

You’ve been saying from the beginning that you hire externally, that contracts are awarded externally for specialized services, services that we do not offer. However, it has come to my attention, particularly on the Saint-Jean military base, that there were contracts for basic janitorial services, such as sweeping and cleaning the bathrooms.

Why can’t the department have its own employees for this type of work, which is neither specialized nor temporary? Mopping floors, scrubbing toilets and doing basic janitorial work are daily tasks. Why, then, did you go through procurement, and why aren’t you using internal resources? Again, these are not specialty or temporary services.

Furthermore, how do we ensure that companies, whether they’re retained for Defence or any other department, arrange the same benefits for their employees that the government offers its own public servants?

[Mollie Royds]

As to the specific contract and capacity that is being contracted for, I'm afraid I would not be able to speak to an individual department's requirement, but, as I indicated, each department is responsible for determining that reasonable efforts have been undertaken to ensure that what they are contracting out for cannot be undertaken by the public service.

As we have indicated, there are several reasons we would seek to outsource, including because we are not able to find a specialized skill set, or something that is in high demand, or something that is not available or for a particular CERC support but, again, I'm afraid I can't speak to the particular requirement that is being asked.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Ms. Royds.

We'll now go to Mr. Johns for two and a half minutes.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Understaffing has frequently resulted in contracting out of government services to temp agencies, or entire programs are sent to the private sector. Some areas that are currently understaffed are ATIP officers, which I talked about earlier, HVAC operators, cleaners, border officers, passport agents, and the list goes on.

What is being done to ensure that government departments are properly staffed?

[Emilio Franco]

As I highlighted in my opening remarks, the decision to outsource is a departmental decision. One thing departments are required to do under policy is consider the best way to deliver on their investments and deliver their results for Canadians, looking at marketing conditions and seeing what the best approach is to deliver on those outcomes.

In terms of a broader Government of Canada strategy, I'm happy to take that question away. It is broader than a procurement policy question, so I'm happy to take that question away for colleagues within the department.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Okay. Thank you.

Mr. Franco, global research shows that governments pay more, for poorer service, when public sector work is contracted out. In fact, in 2018, the UN special rapporteur on poverty and human rights discussed privatization as being a cause of poverty while still costing governments more.

What analysis have you done on the total cost of contracted-out work, including the cost of procurement, compared to bringing this work in house?

[Emilio Franco]

Thank you for the question, Mr. Chair.

I'm not familiar with the specific study looking into that question. As I mentioned, departments are making that decision—

[Gord Johns, NDP, Courtenay—Alberni, BC]

What analysis has been done in terms of the total cost of contracted work, including the cost of procurement, compared to bringing this work in house?

[Emilio Franco]

Thank you for the question.

I'm not familiar with a particular study into that question.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Have you not done any analysis to see whether it's cheaper to have in-house staff than to contract out?

[Emilio Franco]

Thank you for the question.

Again, the decisions are made by the deputy head on the basis of an individual program or investment, to look at the particular service or program they are looking to deliver, look at the resources they have available to them within their own professional public service, and look at what requirements they have that may need to be contracted out. Then they make a decision on the basis of that information for that particular program or service delivery.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Franco.

We'll now go to Mr. McCauley for five minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks, Mr. Chair.

Mr. Franco, I just want to come back to you. I realize you might have limited oversight on this, but is there a sense within Treasury Board—again going back to, I suppose, Treasury Board as the gatekeepers or protectors of the taxpayers' purse—that perhaps the outsourcing is out of control? I think that in 2014 it was about $6 billion a year, growing to $16.7 billion. Is there any sense of worry or concern that we're growing, again, this hidden wing of the public service over which there is clearly very little accountability or oversight?

Before you answer that, I'd like to bring up the example of a quarter of a million dollars going to a consulting company to say, “Don't buy sensitive security tech from a despotic regime.” The example I brought up earlier to PSPC.... There are four examples. I actually looked up the item on the web. There were four $71,000 contracts given by PSPC on behalf of the RCMP for fairness monitoring on an RFP. Basically, for over $280,000 we got four identical reports with a one-paragraph answer.

There's no oversight of value for taxpayers' money. Who is going to step up to protect taxpayers? Who will step up? Treasury Board clearly is not, even though I believe it should be responsible. How do we get a handle on this?

[Emilio Franco]

Thank you for the question.

As I mentioned, when departments are looking at how they're achieving results, their decisions are made in accordance with that. As departments are responsible, under our policy, for publishing their results through departmental results reports, parliamentarians and the public receive transparent, clear information regarding departments' decisions made with regard to resources and the results they're achieving with those expenditures.

[Kelly McCauley, Conservative, Edmonton West, AB]

Yes, but—no offence, Mr. Franco—that's not an answer. Again, who's looking after the taxpayers here? Who's looking after ensuring accountability? Treasury Board is not. It's very clear that the departments are not. There are 11 of us in this committee. We don't have time to go through.... You can't see it, but I have several hundred pages just from Deloitte contracts.

Is there no sense of concern in Treasury Board that maybe the rules aren't being followed? Maybe the framework is not set up strongly enough or departments are just granting contracts willy-nilly without any concern for taxpayers' money.

I mean, $16 billion is a lot when we've spent $50 billion on salaries. Again, that's over one-third added. Who's watching this? The departments aren't, obviously.

[Emilio Franco]

Thank you for your perspective, Mr. Chair.

The departments are responsible for applying Treasury Board's mandatory policies that are instruments within the organization for monitoring and auditing their application and taking corrective action in the case of non-compliance. In a number of cases they report to Treasury Board.

[Kelly McCauley, Conservative, Edmonton West, AB]

Does Treasury Board have any role, apart from saying “Here's the policy” and then just walking away?

[Emilio Franco]

There are a number of—

[Kelly McCauley, Conservative, Edmonton West, AB]

That's an oversimplified question, I realize, but it doesn't look like anyone in the government is responsible for the $16 billion in spending.

[Emilio Franco]

For the departments, for contracts that are within departmental authorities, they of course manage those. Treasury Board has no oversight over those contracts. However, a limited number of contracts every year go towards the board, in which due diligence is provided over those contracts through submissions. Of course, it's important that the Treasury Board does not approve the contract itself but rather provides the department responsible to enter into the contract as an approval authority.

So there are a select number of contracts every year that the Treasury Board does see.