Government Operations Committee on Nov. 24th, 2022

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

I have a plane to catch. However, since I know Mr. Bains is one of the people who is on hybrid for a very valid health reason, I would certainly enjoy hearing his questions.

[The Chair, Conservative, Kelly McCauley]

Mr. Bains, you can talk for five minutes, please.

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

Thank you, Mr. Chair, for giving me the opportunity.

Thank you, Minister. I will make it quick.

As we all know, the national shipbuilding strategy brings enormous economic benefits to our country. It's an extremely important piece for us here on the west coast and for our marine sector. I certainly appreciate it. Our committee is studying shipbuilding. Your predecessor testified at committee numerous times throughout and spoke about the progress made to date on this important file.

Could you please update this committee on Canada's efforts to build ships for the future and what it means for jobs?

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Absolutely. I can understand your interest, of course. Anyone in the Vancouver area would be similarly very proud of what we're able to achieve with our national shipbuilding strategy.

We are delivering for Canadians by equipping the navy and the Coast Guard with the ships they require in order to serve and protect Canadians. We are also creating good, middle-class jobs across the country, because there is similar work going on in Halifax as well. In fact, the first three Arctic and offshore patrol ships have been delivered. The third was delivered to the Royal Canadian Navy in September. The next three are under construction, with steel cutting for AOPS 6 having occurred in August.

As of this summer, Canada has awarded approximately $21.7 billion in national shipbuilding strategy contracts. I can see Madame Vignola cringing at that number, which is obviously very large, but that is the amount in contracts to businesses throughout the country.

Our national shipbuilding strategy is a long-term investment, and it will continue to create good jobs and support economic growth in coastal communities across Canada.

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

Thank you.

Mr. Chair, I can leave it there if you want to move on. That's all I have for the questions. You can move on to the next panel.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Bains.

Minister, thanks for joining us.

We'll excuse the minister and welcome Mr. Page. We'll continue with Ms. Block for five minutes once we excuse the minister and get Mr. Page to join us.

Go ahead, Ms. Block, for five minutes, please.

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

Thank you very much, Mr. Chair.

I want to circle back to the questions that I was asking around the departmental results reports. At our last meeting with the President of the Treasury Board, we were told that the departmental results had not been released for one of two reasons, and she gave the reasons that either they had been submitted in the wrong format, even though the departments were provided with a template six months ago and there was a deadline date of November 3, or they had not been submitted yet.

You confirmed that your DRR was submitted on time. Do you have any explanation for why your DRR has not been made public yet?

[Wojo Zielonka]

I think they're trying to consolidate all of them. However, I can give this committee assurance that we submitted ours on the deadline and we used the prescribed format, so I believe ours should be fairly straightforward.

I know that they go through a rigorous process of quality control. I think sometimes there are challenges because we submit it in both official languages, and sometimes there's a mismatch. There are sometimes little errors. I think they do that scrubbing, and that's probably part of why it's taking them a little longer.

Obviously, there are a lot of departments and organizations that are submitting, so that may be part of the challenge.

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

Thank you very much.

That was what I was hoping you would confirm, that you actually had used the format that was recommended for you to use.

I want to follow up on some of the questions that my colleague, Ms. Kusie, was asking in regard to the Phoenix pay system. I continue to hear from not only constituents in my riding but from my colleagues from all across the country that they continue to have concerns raised with them about the Phoenix pay system.

My colleague mentioned that there were $500 million in overpayments. I thought I maybe was exaggerating that number but I'm not. There are $500 million in overpayments. In that same article it also noted that, according to public accounts documents, the federal government paid $125 million in Phoenix-related damages to approximately 143,000 people during the 2021-22 fiscal year, and that in the previous fiscal year the federal government paid $400 million in damages to approximately 324,000 individuals.

We're looking at half a billion dollars paid out in damages as a result of what I would call the mismanagement of the Phoenix pay system. It has also been reported that the public service pay centre had 207,000 transactions beyond the normal workload, which is up from a low of 94,000 in March 2021. That's up in October from March 2021.

Can we expect to see another huge amount of Canadian taxpayers' money being paid in damages for the mismanagement of the Phoenix pay system?

[Paul Thompson]

The numbers that the member quoted were correct in terms of the backlog. In terms of overpayments, we have now collected over 80% of the overpayments that have been identified to date and that's an amount over approximately $2.5 billion in overpayments collected. The remaining 20% that you mentioned is the figure that's in the $560-million range of work that is continuing to collect overpayments. That work continues.

The responsibility for the work on damages rests with the Treasury Board Secretariat, so I'm not in a position to comment on the work of administering damage claims. That is not managed by PSPC.

With respect to the numbers, I did mention the backlog is indeed much higher than we're comfortable with and where we want it to be. We're on track to see intake this year approximately 21% higher than the previous year. Our output thankfully has gone up about 13%, but obviously it's not enough to keep up with the intake, hence that increase in the backlog that you've seen.

We have a multipronged approach where we've hired over 500 additional staff over the last year. We're going to continue to work on staffing and the smart deployment of the staff so that we have the right skill level on the right type of transaction so that we can optimize the use of staff. We have further opportunities for automation, so it's a human effort as well as a management and innovation effort.

[The Chair, Conservative, Kelly McCauley]

Thank you.

Mr. Housefather, you have five minutes, please.

[Anthony Housefather, Liberal, Mount Royal, QC]

Thanks. I'm going to be sharing with Mr. Kusmierczyk.

Mr. Thompson, I wanted to clarify just a couple of things if that's okay. The issue of the mobile health units was raised multiple times and, as I understand, near the beginning of the pandemic there was a real fear that our hospitals would not be able to maintain capacity. The United States, in New York, was bringing up ships and there were governments across.... I know that deputy ministers sat together. There were different departments across government to work on COVID, and one of the things that came from the provinces, Health Canada and everywhere else was that we needed to find a way to meet surge capacity.

As I understand it, it wasn't one contract: SNC-Lavalin. There were two contracts given, one to Weatherhaven and one to SNC, of which the maximum value could be $150 million, but that's not necessarily the value that was paid to the company.

Am I correct in saying SNC did not receive a full $150 million? They received what they actually delivered to us.

[Paul Thompson]

That is correct. I believe the payments to date to the SNC-PAE consortium is just over $82 million for their portion of the mobile health unit contract and then there was a larger effort with Weatherhaven, the other contract.

Both of those were identified, as the member noted, through analysis across government and with provinces and territories on the need for the surge capacity, as the member highlighted, and it was done through a competitive tender. These were the two companies that came forward—a consortium in one case—that had demonstrated experience in that area.

[Anthony Housefather, Liberal, Mount Royal, QC]

Yes, there is a lot of confusion about sole-sourcing, because it was reported to be sole-sourced, when, I believe—as you said—there was a competitive tender. There was also the idea that we paid $300 million and $150 million to each of the companies.

In fact, as I remember, one thing about these field hospitals was that you deliver the field hospital, but you also buy a lot of equipment and medical supplies that could be deployed outside of these field hospitals, as well. You deliver this to the Government of Canada. It's part of what we pay for. Is that correct?

[Paul Thompson]

Yes, the MHUs are fully outfitted with the supplies and hard infrastructure to be deployed. The minister noted there were some deployments from the mobile health units, including an oxygen concentrator, which was one of the key pieces of equipment deployed in the Northwest Territories. There have been other uses for some of the supplies as well. These are assets that remain at the disposal of the government for future needs.

[Anthony Housefather, Liberal, Mount Royal, QC]

That's perfect.

I also want to come back to some of the original questions asked, because I think it's important to clarify what the role of PSPC is vis-à-vis the role of the client department, when it comes to contracting.

For example, when it comes to the question of.... GC Strategies, the company engaged by CBSA to do the initial design and 70 updates, was paid approximately $8.8 million, with the understanding that they find the personnel to work on the application. There was an original—I'll call it an umbrella contract—put in place by PSPC, but the client department could then go ahead, within its own framework, under that umbrella agreement, and set up its own purchase order. This seems to be what happened. The vendor was selected by CBSA, not PSPC.

Would I be correct in that?

[Paul Thompson]

The client department, in this case CBSA, would make the selection, and PSPC would execute that. It would be executed through the existing supply arrangement that PSPC put in place.

[Anthony Housefather, Liberal, Mount Royal, QC]

Exactly, there is a way for client departments to contract below a certain amount, which would then not even come to PSPC, I believe. Over that delegated authority, PSPC would put in place arrangements based on the request of the client department. Once PSPC had done that and executed the contract, the client department would be the one actually placing the purchase orders and knowing exactly what they were buying, and at what times.

Would that essentially be correct?

[Paul Thompson]

Yes. I believe CBSA identified a total of 29 contracts, and PSPC was only involved in 21 of them. We can infer that the other eight fell within their own authorities to execute. The others were, as I indicated, a mix: 13 of 21 were competitive, and eight were awarded under these exceptional authorities, drawing upon the pre-qualified list of suppliers.

[Anthony Housefather, Liberal, Mount Royal, QC]

Okay, that's perfect. That's why CBSA....

Thank you so much. I'm sorry.

[The Chair, Conservative, Kelly McCauley]

You have only five seconds left, and no time to share with Mr. Kusmierczyk.

We now have Mrs. Kusie for five minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much, Mr. Chair.

Thank you very much, officials, for staying here for the remaining hour.

I have a question. In the supplementary estimates, the Department of Public Works and Government Services is asking for just over $17 million for an e-procurement solution. Given my earlier questions about Phoenix, I would be interested in knowing what those funds are going towards, please. That's $17 million for the e-procurement solution.

[Paul Thompson]

I'm happy to speak to that.

The minister mentioned, in her opening remarks, the e-procurement initiative. It has a total budget of about $240 million. Earlier, in the month of September, we went live with the CanadaBuys site, which is the client-facing portal. There are some back-office capabilities, as well. This is aimed at making the procurement experience much easier and less frustrating, particularly for small and medium-sized enterprises. It will give the government much better access to data, and it will allow suppliers to self-identify when they are members of equity-seeking organizations.

We are pleased with the progress. We have over 20,000 suppliers already registered on the site, and over $1 billion in contracts has been registered, so the program is meeting its key milestones.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Over 20,000 have applied.

[Paul Thompson]

Yes. Twenty thousand vendors have registered on the site.