Government Operations Committee on March 22nd, 2023

[The Chair, Conservative, Kelly McCauley]

Good afternoon, everyone. I call this meeting to order. Thank you very much.

Welcome to meeting number 57 of the House of Commons Standing Committee on Government Operations and Estimates.

Pursuant to the motion adopted by the Committee on Monday, March 20, 2023, the committee is meeting on the study of the supplementary estimates (C), 2022-23.

Minister, welcome back. I understand you have a five-minute opening statement.

Colleagues, we are running a tiny bit late, so I'm going to be keeping everyone to their exact time, please, if possible.

Minister, please go ahead.

[Helena Jaczek, Liberal, Minister of Public Services and Procurement]

Good afternoon.

Let me begin by acknowledging that we are gathered on the unceded territory of the Algonquin Anishinabe people.

With me today are Arianne Reza, associate deputy minister of Public Services and Procurement Canada; Wojciech Zielonka, assistant deputy minister and chief financial officer of Public Services and Procurement Canada; Sony Perron, president of Shared Services Canada; Scott Davis, chief financial officer of Shared Services Canada; and Simon Page, assistant deputy minister of defence and marine procurement, PSPC.

I'm pleased to be here to discuss supplementary estimates (C) for both Public Services and Procurement Canada and Shared Services Canada.

To support our activities we are requesting access to additional funding of $11.5 million for Public Services and Procurement Canada through supplementary estimates (C). Shared Services Canada, for its part, has requested a total decrease of $15.1 million.

Specifically, Mr. Chair, Public Services and Procurement Canada is seeking access to $9.9 million to accommodate employees who provide pension services.

The department is also requesting $2.5 million to maintain the Controlled Goods Program and meet its commitments under the Enhanced Security Strategy for the examination, possession and transfer of controlled goods within Canada.

The department also plans to transfer $2 million to Indigenous Services Canada to support indigenous communities as they apply for funding for projects that can generate economic opportunities and benefits.

This transfer, in addition to the requirement that a minimum of 5% of the total value of federal contracts be held by businesses led by indigenous peoples, will help us to continue to walk the path of reconciliation.

Our work to serve Canadians extends well beyond these initiatives. Managing around $24 billion in procurements annually, Public Services and Procurement Canada continues to leverage its purchasing power to increase access to economic opportunity for a greater diversity of Canadians, including through the development of a supplier diversity program.

In addition, we are advancing greening government initiatives for federal property and infrastructure. This includes leveraging the use of clean electricity and low-carbon products, as well as integrating energy reduction, waste reduction, and greenhouse gas reduction into all real property projects.

And as public servants return to the office, the department continues to modernize workplaces to make them greener and better meet employees’ needs while lowering operating costs.

These are just a few of our priorities.

Moving back to supplementary estimates (C), as I said, Shared Services Canada's request will see reference levels decrease by $15.1 million through a number of transfers. The department supports a public service that is responsive to the needs of Canadians through improved service delivery, increased productivity and realized cost savings. Shared Services Canada is supporting other government departments with their projects as they deliver key government initiatives. These investments support government priorities through digital delivery of programs and services to Canadians.

Transfers from the department include $8.5 million to the Communications Security Establishment for cyber-related projects, providing enterprise end-to-end cybersecurity solutions, as well as for operating and developing the secure communications for national leadership project, providing national leaders access to secure communication technologies.

The department is also transferring $4.7 million to the Canada Border Services Agency for the passenger protect program to introduce an automated Canadian no-fly list, and $1.1 million to Statistics Canada for the transfer of surplus for the 2021 census of population project.

Mr. Chair, I have touched upon only some of the important work of my diverse portfolio.

I will be pleased to answer any questions you may have regarding supplementary estimates C for both departments, as well as any other initiatives we have underway.

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you, Minister.

We'll start with six minutes for Mrs. Block.

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

Thank you very much, Mr. Chair.

Thank you, Minister, for joining us today, and welcome to your departmental officials as well.

Minister, in these estimates, $2 million is being sent to the Department of Indigenous Services, seeking approval under vote 1c for the national indigenous procurement initiative. Previous departmental reports have shown zero progress being made. In fact, after the 2021 report showed zero progress, the 2022 report was rewritten so that the progress was hidden in a footnote, but there was still no progress made.

It is good to be able to stand up and say that you want more indigenous people involved in the procurement process, but it would seem that millions of dollars are going towards the administration of an initiative that is getting no results. There was a report from this committee in 2018 that may help. Perhaps you should take a look at it.

I'm wondering how you intend to make serious progress on this initiative, which appears to have been stalled.

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

Thank you, Ms. Block, for your question.

Certainly this is an area where the department has spent a considerable amount of time laying the groundwork to ensure that the governance guidance reporting structure is in place to implement the minimum 5% target government-wide.

There has been a lot of work in close collaboration with indigenous partners and other government departments to develop tools and detailed guidance outlining parameters, obligations and available supports. These are being distributed to procurement officers and disseminated through governance committees. We certainly are moving towards achieving the 5% target that has been set. It is a difficult and complex task. The consultation is ongoing with indigenous partners to identify barriers to participating in federal procurement.

I must say that Shared Services Canada—as you know, there are two sides to this department—exceeded the 5% indigenous procurement target in fiscal year 2021-22, with a total value of 6.3% and a volume of 7.8% of SSC-funded contracts awarded indigenous businesses. We expect obviously for this fiscal year, 2022-23, to meet that 5% indigenous procurement target within Shared Services.

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

Thank you very much, Minister.

Also under vote 1c, Public Services and Procurement Canada is requesting $9.9 million for “accommodation costs related to pension administration”. Can you please explain to us what this is for and what this means?

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

Yes. Thank you, Ms. Block.

Certainly, I looked into that header as well. The $9.9 million in funding for this current year is essentially for office space for employees who provide pension services. In essence, as I understand it, it does require additional funding.

The employees concerned are providing pension services related to the Public Service Superannuation Act, the Canadian Forces Superannuation Act, the Royal Canadian Mounted Police Superannuation Act and the Canadian Forces pension fund and reserve force pension fund. It has been broken down by specific department where this is required.

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

Thank you very much.

I'll follow up on a couple of questions.

Why is there a line item specifically for accommodation costs for pension workers distinct from other public servants' accommodation costs? Secondly, why is it not included in the third appropriation of “non-discretionary expenses associated with Crown-owned buildings and leased space”?

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

Certainly, I presume it's for pension fund employees because that was where the need was.

On why it is exactly documented in that particular fashion, I think I should perhaps turn to our chief financial officer.

Wojo.

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

Thank you, Minister.

I'll just comment that, because those pension plans are separate entities, they are required to essentially reimburse the government for the cost of accommodations. That's what that charge is. In essence, the $9.9 million is their reimbursing us for the space that they're using.

The plans are a separate entities in themselves.

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

Thank you very much for that answer. I'll move on to another topic.

Minister, according to a November 21 briefing note for Minister Fortier, approximately $685 million had been paid in damages relating to the Phoenix pay system up to that date, including $125 million in the preceding year.

How much money continues to be set aside to pay for the damages related to the Phoenix pay system?

[The Chair, Conservative, Kelly McCauley]

I am afraid that is our time. Perhaps you can provide that in writing or in a response to one of our other colleagues here.

Mr. Bains, you have six minutes, please.

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

Thank you, Mr. Chair.

Thank you, Minister, for joining us again, and to all of your colleagues here.

Minister, as the MP for Steveston—Richmond East, I can tell you that shipbuilding is very critical to the prosperity of not just my constituency but to the maritime sector in British Columbia and Canada as a whole. In an increasingly unstable world, the national shipbuilding strategy is an investment in the future of our security, which will create good-paying, generational jobs for Canadians.

Could you please give the committee a general update on the national shipbuilding strategy and its progress?

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

Thank you very much, Mr. Bains. It's good to see you in person here, I think, for the first time. It's good news.

Thank you so much for this question. As you've alluded to, the national shipbuilding strategy does create good, middle-class jobs across the country. As I think everyone's aware, this is a very long-term investment that is delivering results now. We have ships for the navy and the Canadian Coast Guard, as well as, of course, the economic growth potential for Canada, particularly as it relates to your area on the west coast.

Six large vessels and numerous small ships have been delivered. Many more are under construction across Canada. The national shipbuilding strategy contracts awarded between 2012 and 2021 are estimated to contribute close to $21.26 billion to Canada's gross domestic product and create or maintain—in fact somebody has done a very careful calculation—18,239 jobs annually between 2012 and 2022. Anyway, it's a very large number.

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

Thank you for that.

As you know, we heard a little bit before about diversity in procurement. In January 2022, PSPC launched the supplier diversity action plan, which aims to increase participation for under-represented groups. One goal of the action plan was to ensure that a minimum of 5% of the value of their contracts was being award to indigenous businesses. I know you shared that for Shared Services there has been an increase of up to 6.3%.

Where else has our government made improvements? What programs have worked? Can you talk about that?

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

Yes, it is certainly something that our government is absolutely committed to, especially when it comes to small and medium-sized businesses, in terms of ensuring that the ownership of such businesses is more diverse. It is something that we take very seriously. There are obviously many different under-represented groups.

We have created an organization, Procurement Assistance Canada, that is there specifically to assist individuals. I've discovered that perhaps this isn't as well known across the country as it might be. I had a recent round table, in fact, in Kitchener. The groups we were talking to were unaware of some of the assistance that's available. A lesson that we learned was that, obviously, through Procurement Assistance Canada, there is the ability for under-represented groups to understand their opportunities to bid on various government procurement opportunities.

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

The Canadian government has done a great job in procuring protective equipment in order to protect Canadians during COVID-19. Can you speak to how our efforts ensure that we have the PPE and rapid tests to protect Canadians currently and in the future?

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

This certainly was a source of pride within the organization. I know that the associate deputy minister, Ms. Reza, was working on the acquiring PPE and vaccines through the entire COVID period, and it was a massive effort. I think it was extremely successful, as we've seen. We are one of the countries that was best supplied with PPE across the country through provinces and territories, as well as the procurement of vaccines.

If there's any time left, perhaps the associate deputy minister could tell us about that great effort.

[Arianne Reza, Associate Deputy Minister, Department of Public Works and Government Services]

Thank you.

The other thing that I could add to it is that there was a tremendous outreach from Canadian domestic suppliers to help us and to pivot their supply lines to support us. We were able to do that first as a targeted set of competitions, and then procure through competitive measures to help those industries. In fact, we had several indigenous suppliers providing us with rapid tests, surgical masks and other commodities.

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

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Bains.

Mrs. Vignola, you have six minutes, please.

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

Thank you, Mr. Chair.

Ms. Jaczek, Ms. Reza, gentlemen, thank you for being with us.

On Monday, the Parliamentary Budget Officer told this committee that it was worrying to see both record spending on consultants and record numbers of civil servants.

The current number of civil servants is about 1% of the population, which is also growing. What is worrisome is that in both cases, these are record numbers, but there is no significant improvement in services. We can mention here the problems with immigration, passports, family allowances, employment insurance, and so on.

I would like to know, given that the need for emergency services has decreased since the peak of the pandemic passed, why spending on professional and special services is not returning to the levels we experienced before the pandemic.

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

Thank you, Madam Vignola.

I think this broader question of the use of outsourcing of professional services is one of considerable interest to this committee. Also, internally, we're certainly looking at this very closely through a number of different mechanisms.

First of all, PSPC does require other departments and agencies to identify and define their requirements for outsourcing, and we respond appropriately. We as a department also do outsourcing as well. The decision to hire additional public servants to meet a growing demand as it continues to grow across government or to pursue professional—

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

I apologize for interrupting, Ms. Jaczek, but the question is about when we will see a decrease in the use of consultants, as they are normally used for emergency services and not for core services. Core services are predictable.

When will we see things return to the way they were before the pandemic? I totally understand the way things work, the fact that you have to respond to requests from other departments, and so on. But I would like to know when we will see a situation like before the pandemic, or at least an improvement in services.

As we are hitting record highs, both in consultant spending and in the number of public servants, the state machine should be in exceptional shape and remarkably efficient, but it is not now.

How can we improve this situation?

When will consultants be hired to provide only emergency services, not core services?

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

We assess the need for professional services on an ongoing basis. Quite honestly, the pandemic obviously required a number of these services to be provided on an urgent basis, but our government is an ambitious government. We have an ongoing number of new initiatives. I can only reference things like acquiring dental care through a third party provider. There may be many instances where we require some additional assistance in terms of professional services provided by outside consultants.

The vast majority of Public Services and Procurement Canada contracts for goods and services are for work that cannot be and has traditionally not been carried out by public servants, such as construction services, renovation work and shipbuilding. The list goes on. I'm certainly not going to commit that there's going to be the need for fewer professional services provided by outside workers.