Government Operations Committee on Oct. 6th, 2022

[The Chair, Conservative, Robert Gordon Kitchen]

I'll give you 15 seconds.

[Levent Ozmutlu]

Thank you, Mr. Chair, for the question.

This again goes back to our e-procurement solution. We'll be monitoring that type of data.

Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you very much. I appreciate that.

We'll now go to Ms. Vignola for six minutes.

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

Thank you, Mr. Chair.

Thank you for being here, gentlemen, and for working to make procurement more accessible to everyone. That's important not just to me, but also to thousands of small and medium-sized businesses, or SMEs.

This is always a sensitive subject.

My background is in history, which I used to teach. A historian's worst fear is that history will repeat itself. The road to hell is paved with good intentions, and sometimes, we repeat the mistakes of the past—unintentionally. I'm going to choose my words carefully.

It's important to ensure that everyone has equal access to federal contracts. Is it necessary to intrude on people's privacy to achieve that?

Isn't there a way to keep discrimination and segregation from resurfacing in the process so that no one is affected, since the intention is to include everyone? I'm just putting that out there.

What can we do to prevent a situation where everyone is seemingly put into their own little box, off on their own little island?

It's a mistake I don't ever want to see repeated. Obviously, Canada isn't the U.S., but Canada and Quebec have made mistakes in the past. I don't want to see the same problems resurface.

I'm bringing this up because I read that LGBTQS2+ business owners didn't want to identify as members of that community.

If they don't want to self-identify, will they be lumped in with the majority and end up being rejected?

How can we make sure that we aren't engaging in segregation, despite our good intentions, which are to give everyone equal access?

[Mollie Royds, Associate Assistant Deputy Minister, Acquisition Branch, Department of Public Works and Government Services]

Thank you very much, Mr. Chair, for the question.

First, can I just apologize for not being there in person with my colleagues? Unfortunately, I'm recovering from a cold, so an in-person attendance wasn't possible today.

In terms of the question, I very much appreciate the concerns that have been raised. Certainly those are things that we have been focused on as we've been developing the supplier diversity program. Specifically, we have been engaging in consultations with the different under-represented communities in relation to their concerns and the things that would be a priority for them to see in our program. In fact, I as well have heard the same concerns that the member has indicated here.

As was indicated in the opening remarks, certainly it is our intention with the program to create opportunities for under-represented groups to increase their participation as well as to socio-economic benefits to those under-represented communities, and quite frankly, to remove or lighten barriers in procurement that we are aware exist.

We've discussed a little bit, as well, the social procurement policy and the importance of—

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

Sorry to cut you off, Ms. Royds. Everyone agrees on the objectives. They are commendable, and I support them.

What I wanted to know was how we could achieve those objectives, or apply these criteria, without engaging in segregation.

In practical terms, how can we be sure we aren't putting in place a system that reproduces what we are trying to avoid?

I understand what the objectives are, and we can all agree that they are appropriate. My question is about what we can do to ensure that we aren't engaging in segregation if we seek out very sensitive information and open up a contract to women or members of the Black community.

To make contracts available to certain groups and not others is to engage in segregation.

How can we avoid practices that cause segregation so that everyone feels included and free to submit a bid, knowing that it will be seen, read and considered?

[Mollie Royds]

Thank you very much for the question. It's important again to highlight the extensive engagement that we have undertaken with the under-represented communities and the many issues that they have flagged to us in terms of the barriers to access to procurement opportunities, so our focus is very much on ensuring that we do remove those barriers and encourage the participation of under-represented groups in the procurement processes.

We definitely intend to do that, being conscious of some of the potential unintended consequences. We want to ensure that these benefits do go to the communities that we are targeting, but we also want to ensure that we are abiding by the policies, laws, trade agreements and regulations that govern our procurement processes.

We are still finalizing the details of the supplier diversity program, and in line with the action plan we released in January, it is our intention to be releasing the program in winter of this year.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Ms. Royds.

We'll now go to Mr. Johns for six minutes.

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

Thank you.

A Globe and Mail article that was published today about the ballooning costs of the ArriveCAN app describes a lack of transparency with respect to subcontractors. A company that has been awarded millions of dollars in federal contracts for work on the app seems to rely almost exclusively on subcontractors.

Maybe someone can explain how the government supplier diversity action plan and policy on social procurement applies to subcontractors. Could Mr. Mills explain, maybe?

[Michael Mills]

Thank you, Mr. Chair, for the question.

With respect to ArriveCAN, I want to make a distinction between subcontracting to companies and subcontracting to employees.

In this case, my understanding is that the firm in question was subcontracting employees to do the work. In terms of that piece, from a contracting perspective, we do look and we are working on systems to capture the value of subcontracts to companies, but not necessarily subcontracted resources that are, for purposes of a contract, treated as employees.

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

According to the article, there were several companies that were subcontracted. Where are you going in terms of ensuring that those subcontractors or employees are meeting the requirements?

[Michael Mills]

Certainly we are looking at having the ability to make sure that we're capturing subcontracts. That's so that when we do large contracts that will necessarily involve subcontracting, we are creating positive incentives for them to follow some of our actions to make more opportunities available for diverse businesses and to make sure that they're not reimposing barriers that we've tried to remove through our normal contracting process. It's so that overall, the large contracts will also have greater representation of diverse suppliers within them.

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

To me, it seems like there are lots of ways to circumvent the whole process. That's my concern.

There was a press release from the Canadian Council of Aboriginal Business back in October, 2019. They stated that “aboriginal businesses could supply 24% of the federal supply chain.” We've heard Carol Anne Hilton from Indigenomics. Obviously, she talked about the impact that this would have on indigenous people and the potential in opportunity.

With that in mind, what challenges exist for departments and agencies in meeting a 5% indigenous procurement requirement? When does the government expect to meet that target?

[Michael Mills]

As my colleague indicated, we're rolling out the new initiatives to meet the 5% target. We're looking to meet a three-year timeframe overall for the government to meet that target. Some of the barriers to meeting that target would be around the nature and location of commodities and services.

As an example, in the national capital region, we own a significant real property base that requires a significant indigenous labour force in this region to be able to meet those kinds of targets. The indigenous population currently is relatively small—given the size of Ottawa—relative to a city like Winnipeg, so that is a challenge. As a department, we've been working with stakeholders and local communities to think about how we can bridge some of these gaps.

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

That's great.

What do you do when it comes to populations like Nunavut, where 80% or more are Inuit and the procurement policy is 5%? Are you re-adjusting to meet the local indigenous population? Five per cent would actually mean they're getting far less than they should in terms of procurement.

[Michael Mills]

We are working on the north to figure out how we ensure that we are, first and foremost, respecting our comprehensive claims and land claim agreements. In the case of Nunavut, the Nunavut agreement would have much higher requirements for procurement with Nunavut beneficiaries than the 5%. We will continue to work to respect that.

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

What are the feedback mechanisms that exist for businesses, especially indigenous businesses, that bid but aren't successful in obtaining a federal government contract?

[Michael Mills]

We have Clinton Lawrence-Whyte with us from Procurement Assistance Canada. One of the things that we really do focus on is making that agency a vehicle for businesses to understand why they may not have been successful. We have coaching pilots and other mechanisms to address the specific issue that prevented them from being qualified or winning. It's looking at how they can develop their competencies to be better positioned for those next sets of opportunities.

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

In listening to them, is there a way for businesses that are owned or operated by equity-deserving and indigenous groups to share their thoughts with the department or PSPC on the process and identify any barriers that they might have experienced?

[Michael Mills]

As we mentioned, through the development of our socio-economic policy and continued work on the program, we have been engaging indigenous businesses. Procurement Assistance Canada does have a lot of outreach and engagement with business.

We also work with Treasury Board and Indigenous Services Canada, which has an indigenous reference group of representative organizations, such as the Council for the Advancement of Native Development Officers and the National Aboriginal Capital Corporations Association, to understand their needs and get their feedback. We try to make sure that our program is aligned with the excellence and capabilities within the indigenous business community so that we can increase their involvement in our procurements.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Mills.

We'll go now to our second round and Mr. McCauley. You have five minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks, Chair.

Looking at the departmental plan for PSPC, I notice that on page 13, it states, “target that at least 5% of the value of federal contracts be awarded to businesses managed and led by Indigenous Peoples.” In previous years, it was businesses “owned”. Why the change?

This question of how we determine what's best for the community has come up in the past in this committee: indigenous-owned but 50 non-indigenous workers, or non-indigenous-owned and 50 indigenous workers. How are we working out what's best for the community, and why the change?

[Michael Mills]

Thanks for the question, Mr. Chair.

On this one, I would say it has been moving with the input of the indigenous reference group and indigenous business communities.

[Kelly McCauley, Conservative, Edmonton West, AB]

Will it be the same for women-led and Black-led businesses?

[Michael Mills]

Yes. The context of the change is that there was a concern that there may be individuals who would own a business—that would be 51%—but have nothing to do with it.

The leadership—owned and led—is to make sure of those values and that over time and across the population of businesses, there is a stronger likelihood that a greater level of secondary and tertiary benefits will accrue to those communities as—