Government Operations Committee on Nov. 24th, 2022

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

Thank you very much, Mr. Chair.

Thank you, Minister for being here. To your departmental officials, thank you so much for joining us today.

I'm going to circle back and try to catch up on a number things I wanted to ask about in a follow-up to some of the questions that my colleague asked.

The first would be in regard to the national security exception. I think it was noted that there was one national security exception applied in the process of the sole-source contracting. Can you tell me who determines the application of that national security exception? What was the justification for it in this circumstance?

[Paul Thompson]

That's an exemption that is applied by PSPC to authorize its use. It was used over the course of the pandemic in numerous cases, particularly when there was an urgent need for health and safety, as was the case here with the Canada Border Services Agency.

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

Okay, thank you.

You also spoke about the process for security clearance when my colleague was asking his questions around whether or not security clearances had been waived.

What is the process for pre-qualifying a company?

[Paul Thompson]

There is an annual refresh of the pre-qualification of companies in the supplier arrangements that I referred to. There's an opportunity every year for new companies to apply and for existing companies to re-establish their interest in staying on a supplier list.

We have contract security arrangements that align with the statements of work. They are adjudicated as the contracts are awarded. The statement of work needs to align with the security provisions that are in place with the contractor in question.

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

Thank you very much.

When you're looking at developing a contract, are those written in isolation of that list of pre-qualified companies?

[Paul Thompson]

I would have to check on all the specifics, but it's my understanding that those would be included in the statement of work that the department has. It would be matched against the capabilities of a company on a supplier arrangement list.

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

Thank you.

I want to go back to a question I've had over the last number of weeks when it comes to the contract with GC Strategies. We understand that it is a small staffing firm that does not have the skill set to do the work, but that they pull together a team made up of subcontractors. When we talk about the process for security clearance, I would like to know what process is applied to those subcontractors. PSPC would have had a contract with GC Strategies, but what is the process for those subcontractors?

We have been told that we cannot know who they are or the nature of their contracts. CBSA told us that they don't know who they are.

What sort of security clearance process do they go through?

[Paul Thompson]

On that one, I think I would undertake to get back to the member with the technical details on how that is managed.

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

Okay. I actually want to move into a discussion about the departmental results reports. I may not get through it all, but I will just note that this issue was raised in the Parliamentary Budget Officer's report in relation to the supplementary (B) estimates for 2022-23. He provides some context around lapses in voting. Then he talks about some of the reasons why there would be lapses for the Department of Health given the uncertainty around the pandemic, but then he makes this statement:

In contrast, there is no clear explanation regarding the nonpandemic lapses among other federal organizations. While some detail is usually provided in the Departmental Results Reports (DRRs), the Government failed to release these transparency documents with the Public Accounts and has not committed to a release date.

I am wondering if you can advise me, Minister. Is PSPC one of the departments that has failed to submit its departmental results reports?

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

I'm going to have to turn to my officials.

[Paul Thompson]

With respect to the submission of our departmental results report, we did submit in line with the required timelines.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Ms. Thompson, we'll go over to you, please, for five minutes.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you, Mr. Chair.

Welcome, Minister, and welcome to your officials.

It's incredible to me that we are now moving into the third year of the COVID-19 pandemic. From having worked on the front lines in the very beginning, I certainly appreciate those early days and how difficult it was to procure equipment but also vaccines. We're so far into this now, with generations of boosters.

Could you please speak to the previous actions the government took to ensure Canadians had access to enough vaccines to protect them from current and future waves?

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

Thank you, Ms. Thompson.

Certainly, I'd be pleased to do that, because of course it has been an unprecedented situation that we've faced with COVID-19. I think we can say, and I think we all saw, that our government was in action as soon as the pandemic was acknowledged and declared.

Since it began in 2020, there was a full-court press on responding to COVID-19, working with partners to procure vaccines, personal protective equipment, ventilators, masks and gowns, all in an effort to keep Canadians as safe and as healthy as possible. We did establish complementary supply chains from a range of suppliers, and we partnered with Canadian industry to rapidly scale up and retool production capacity, ensuring a reliable domestic supply to serve our needs for the short and long terms. I think we all remember the stories of so many people stepping up to the plate to do their part.

Since July 2021, Canada has maintained a steady supply of vaccines for every eligible person who wants one. Deliveries from international and domestic sources came in consistently and on schedule to meet our needs, so we have now ensured that we have procured a steady supply of life-saving medical supplies in the short and long terms.

I think we should realize that Canada is currently among the top G20 countries for rate of vaccination. Obviously we still need people to get their boosters, but we have enough. We have secured future supply with Moderna and Pfizer that will provide an access to the range of products that's required, including—and you will have no doubt noted this in the news quite recently—the pediatric supply that's so important to keep our children safe as well. Also, of course, as the variants have occurred, we've kept up and ensured that we've received those vaccines as well.

In terms of more recent times, we have secured a supply of 12.6 million doses of the bivalent, the BA.4 and BA.5 vaccines, to be delivered this year. So far, some 7.8 million bivalent doses have been delivered. We've also secured a supply of a number of therapeutics—you may have heard of Paxlovid—so that specifically if people have respiratory symptoms they can be provided with a prescription.

There are actually some nine different therapeutics that we have acquired, and that was obviously at the behest of the Public Health Agency of Canada. As of October 2022, PSPC has been able to secure orders for more than 2.27 million treatment courses for use in Canada of these nine different therapeutics. Actually, I was interested to learn that these are expensive medications. They vary in cost from $900 to up to $3,000 for a course of treatment.

We have been on top of the situation every step of the way to the extent possible and, of course, we need to remain vigilant going forward.

[The Chair, Conservative, Kelly McCauley]

That's pretty much it, I'm afraid.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

Thank you, Minister.

[The Chair, Conservative, Kelly McCauley]

We're going to go back to Ms. Vignola.

I'm going to combine the two Bloc times and the two NDP times to go five and then two and a half, rather than two and a half, two and a half and two and a half.

You have five minutes, Ms. Vignola.

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

Thank you very much, Mr. Chair.

Madam Minister, according to the Parliamentary Budget Officer's latest report, the budget for warships has increased by a further 9%. We know that the pandemic has resulted in increased costs. That is in particular the result of supply chain delays, absences and leave. The fact remains that a 9% increase is more that what can be attributed to the pandemic itself.

When I heard you say earlier that progress had been made, I was startled once again. On the one hand, you seem to disregard the explosion in prices. On the other, it seems like you are putting a heavy lid on the elephant in the room, in this case Davie Shipbuilding, which is still not officially part of the agreement although it accounts for 50% of the naval construction capacity in Canada. To my knowledge, the framework agreement has not yet been signed, but perhaps you will be pulling a great white rabbit out of your hat this afternoon.

How can you say that things are progressing well?

Earlier you said that the aircraft contract would be signed shortly, since negotiations were proceeding well. Yet you made no mention of the third partner.

I am not asking you to disclose confidential information from the negotiations, but I would like to know how you can say things are going smoothly and that we are making progress when costs have exploded and there is no mention of the framework agreement.

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

First of all, I think you started off with shipbuilding, if I am correct. Obviously our department responds to the needs of the Department of National Defence. They give us the criteria that we need to look for in our contract. That is done very carefully, very diligently. There's obviously a very specific backwards and forwards with National Defence, whether it be on the fighter jets or on the shipbuilding of naval vessels. Obviously, as we know, there is inflation globally. Costs have obviously increased. There have been supply chain issues and so on.

Perhaps our chief financial officer would like to talk a little bit about when he became aware of these costs increasing and what kind of discussion went on with National Defence.

Perhaps you would be best to address Madame Vignola's question.

[Wojo Zielonka, Assistant Deputy Minister and Chief Financial Officer, Department of Public Works and Government Services]

Thank you, Madam Minister.

Typically, that is the responsibility of the departments seeking the procurement in question. In our case, it is our responsibility to work with the organizations that are doing the work to obtain the best price possible. We do that in every case.

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

What control measures do you have to ensure that the price increases are not the result of greed on the part of the companies? I am not saying the companies we are dealing with are greedy, but that is something we have seen in the past. How do you make sure that those increases are the result of external factors alone?

I would also like to get back to the framework agreement because I am really curious to know how the negotiations are proceeding.

[Wojo Zielonka]

We have various measures. For example, we work with organizations that can help us understand the reasons for price increases. They can analyze the information available on other matters. That information can help us analyze the situation and determine whether the price increases are reasonable or not. We can also get specific information from the companies on specific issues.

[The Chair, Conservative, Kelly McCauley]

I'm afraid I have to interrupt you there, sir. That's our time.

Mr. Johns, go ahead, please.

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

Thank you.

Minister, last year we learned that PSPC awarded a $150-million sole-source contract to SNC-Lavalin for field hospitals, despite no formal request being made because of the “urgency of the need”.

Why was PSPC willing to move forward in that case without a request, but it has not been willing to do so in relation to safer supply or harm reduction supplies? Does PSPC see the toxic drug crisis as a public health emergency or not?

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

I'm a little unclear on what the exact question is. Obviously the SNC-Lavalin—