Government Operations Committee on March 27th, 2023

[The Vice-Chair, Liberal, Majid Jowhari]

I call this meeting to order.

Good afternoon, ladies and gentlemen. Welcome to meeting number 58 of the House of Commons Standing Committee on Government Operations and Estimates, or, as our chair regularly calls it, “the mighty OGGO”.

Pursuant to the motion adopted by the committee on Wednesday, January 18, 2023, the committee is meeting on the study of the federal government consulting contracts awarded to McKinsey & Company.

Today's meeting is taking place in a hybrid format, pursuant to the House order of Thursday, June 23, 2022. Members are attending in person in the room and remotely by using the Zoom application.

I would like to make a few comments for the benefit of the witnesses and members.

Please wait until I recognize you by name before speaking. I remind you that all comments should be addressed through the chair.

I believe the clerk has checked the sound and we are all clear to go.

On that note, I'd like to welcome our first and only witness. From the Union of National Defence Employees, we have Madam June Winger, national president.

You have five minutes, Madam President. The floor is yours.

[June Winger, National President, Union of National Defence Employees]

Thank you, Mr. Chair.

Thank you for the opportunity to appear today.

The Union of National Defence Employees of the Public Service Alliance of Canada represents 20,000 civilian defence workers. Our members ensure that military operations are mission-ready at all times and that military members have safe and secure places in which to live and work.

Our members are experts who work on bases in offices, warehouses, airports, labs and garages. They provide consistent and knowledgeable services so that the military can be agile and combat-ready.

Privatization, contracting out, sexual misconduct, harassment and discrimination undermine our members' work and occupational satisfaction. Aside from what we learned in listening to this committee and to the news, we have little experience with McKinsey, but the problems with McKinsey are the greater problems of the contracting out of what should be public service work.

Our 2020 report highlighted the dangers of contracting out cleaning services. It showed that budget allocation restraints forced base commanders to regularly contract out essential work, costing more and providing poorer service. For example, this is a quote from a DND briefing note from Kingston:

It was observed that in an effort to increase the profit margin the contract cleaners were using inferior and improper cleaning products which resulted in additional maintenance, environmental problems and health and safety issues resulting in unfit living conditions....

Our report also detailed the situation of a contracted minimum-wage worker who cleaned the DND medical centre. During most of her employment, she didn't have the necessary WHMIS training and didn't understand how the chemicals she used could hurt herself or others. She was instructed to water down cleaning solutions and forced to clean secure areas without proper security clearances. It wasn't her fault, but her work compromised the patients and other workers. She eventually quit for better work at a fast-food outlet.

Harassment within DND is systemic and entrenched, but it's not limited to just members of the military. Firefighters at CFB Suffield have accused the deputy fire chief of violent behaviour while the fire chief stood idly by. Complaints dating back to 2019 have yet to be resolved. Leadership ignored legislation and needlessly delayed the investigation for more than 20 months. Ultimately, the complaints were investigated, and in November 2021 all allegations of physical attacks, verbal attacks, verbal abuse and threatening behaviours were founded. DND leadership responded to this by inviting the assailant back into the workplace and offering him the freedom to determine whom he would work with and when.

DND leadership has ignored my continued pleas to provide a safe environment for these firefighters. It has been 40 months since the complaints were filed, and the CFB Suffield leadership have advised me that they have not received direction from their chain of command that their actions are not appropriate or in need of correction.

DND needs to follow the legislation outlined in part II of the Canada Labour Code, something that the CFB Suffield leadership has resisted doing. These firefighters continue to live in a toxic, poisoned work environment. National Defence needs to enforce harassment policies and ensure that those who are committing abuses face consequences, and civilian workers must be included in all aspects of any review of the current systems.

When it comes to occupational satisfaction, wage gaps are a major issue. DND's operational workers are paid less than their equivalent trades in the private sector. This is causing recruitment and retention issues, not to mention the impacts to National Defence team members' morale.

For instance, Canadian Forces Health Services employs dental hygienists to ensure military members' oral care is well maintained. The massive layoffs stemming from the government's 2012 federal budget caused the department to contract out hygienists' work. Since 2016, CFHS has attempted to bring the work back into the public service but has failed because the public service pay is so much lower in comparison with the private sector. Instead, National Defence continues to pay contractors to come in. They are working side by side with the public servants and doing exactly the same work. The only difference is that the contract hygienist is making $6 an hour more than the public servant.

For some reason, National Defence seems to think that paying its contractors from a budget line that's different from the line for their public servants is saving money. They've forgotten that there's only one taxpayer.

I thank you and I look forward to any questions.

[The Vice-Chair, Liberal, Majid Jowhari]

That was exactly five minutes. Thank you, Madam Winger.

We're going to start with the first six-minute round.

Madam Kusie, you are up first for six minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much for being here today, Ms. Winger. It's very much appreciated.

I wanted to start off my comments in regard to your story about the firefighters. This is certainly something that we have a lot of respect for on this side of the House.

We noticed a discrepancy that existed between those firefighters across the country and those in National Defence, who are only eligible for their pensions after 30 years of service or at age 65. Really, they serve beside those who are eligible for retirement after 20 years of service.

I want you to know that I, as shadow minister for the Treasury Board, and my colleague, member of Parliament for Battle River-Crowfoot Damien Kurek, have actually sent a letter to Minister Fortier today asking her to remedy this situation and put the pensions of firefighters at National Defence on par with those of firefighters across the nation. Certainly they deserve the same rights and benefits that their brothers and sisters are receiving across the country.

I'm very excited to announce this here today in coordination with what you're saying. Thank you very much for the opportunity for me to share this good news. I do really hope that the minister will respond with what is the only correct response, which is that their work should be seen and valued the same as firefighters in other areas all across the country.

Thank you very much for the opportunity for me to share that with Canada here today.

I recognize that you have not done very much work with consulting firms or McKinsey, which you mentioned in particular. You mentioned a lot of situations in which there is great disparity between the private sector and the public sector. This is something that I think the government needs to look at even further. I believe that in addition to delivering services for Canadians, the government has to take responsibility for competitive wages for its public servants so that we can attract the best talent in addition to providing the services that people in uniform and all Canadians deserve.

Do you think that the outsourcing of work to private consultants has had any impact on your colleagues at National Defence? Could you provide any commentary on that?

It doesn't have to be in response to McKinsey specifically, but in response to the outside work of consultants at the Department of National Defence.

Thank you.

[June Winger]

Thank you for the letter about the firefighters' pension. That's a challenge we've been trying to address for 20 years, easily.

The disparity among the firefighters, federal and elsewhere, is even greater than what you described. There's the firefighters' 44-hour workweek versus the 37.5 that most other public servants work. They end up working nearly six years longer for the same pension, yet they contribute. Therefore, I very much appreciate the letter you're sending. We're cautiously optimistic.

Certainly there is a disparity between the private sector and the public service. That is blindingly obvious with the competitive wages. I'm sure you are well aware that if this matter doesn't get addressed shortly, Canada will likely see the largest strike ever in Canadian history.

As far as outsourcing goes, it's a very difficult and touchy subject for my membership. They see the work they could do, and used to do, to support the military members. Instead, they see that work getting contracted out, time and again.

There are two different ideologies when it comes to contracting. The contractors may support the military, but they're there to make a dollar. In the end, that's what their goal is, whereas the public servants' goal is to make sure that the mission is run successfully and to the best of their abilities. They conflict from time to time.

We see that time and time again. My own office is in the Counter Terrorism Technology Centre back in Suffield, Alberta. We had a building built. As I sat in my office, it was very obvious that the heating and air conditioning were not coming through into my office. I contacted DCC, Defence Construction Canada, which was overseeing the remodelling. They came back and said, “No, we checked our records. Everything is balanced.” I then went to National Defence and asked a few of my friends who work in the trades to come and take a look at the building, and—

[The Vice-Chair, Liberal, Majid Jowhari]

Madame Winger, could you wrap up quickly, please?

[June Winger]

Okay.

It turns out the building wasn't balanced. It was impossible that it ever could be balanced. Both the contractor and subcontractor signed off that it was balanced, but there was literally metal in the air-handling units that would have prevented it from ever balancing.

This is a very common example of things we've seen. I could sit here all night telling you about it.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you.

Thank you, Mr. Chair.

[The Vice-Chair, Liberal, Majid Jowhari]

Thank you.

The next round goes to MP Housefather. You have six minutes.

[Anthony Housefather, Liberal, Mount Royal, QC]

Thank you, Mr. Chair.

Thank you, Ms. Winger, for being here today and for the work you and your members do to keep our men and women in the armed forces safe and our country safe, and for doing good things.

I have to ask you a few questions before I get into the meat of what I think you want to talk about, because we've been diverted from our general study on outsourcing in order to deal with McKinsey. We've had many meetings on McKinsey, because there's been an effort by some to claim that the contracts with McKinsey were somehow untoward, that there was political interference involved, and that the contracts were given to friends of the government.

Ms. Winger, do you have any specific knowledge related to any political interference in contracts given to McKinsey?

[June Winger]

That's not something I'd be made aware of in my role.

[Anthony Housefather, Liberal, Mount Royal, QC]

You have no reason to doubt the audit report that came out, which said there was no political interference related to the contracts.

[June Winger]

Again, that's not anything I would be brought into. It's outside my scope.

[Anthony Housefather, Liberal, Mount Royal, QC]

I totally understand, but these are hearings about McKinsey. That's why I have to ask you these questions. You can feel free to say you don't have any information.

With respect to the contracts, I understand and in fact sympathize very much with your views related to cleaners, because that would be a core function employees would normally be called upon to perform. The contracts with McKinsey were, for example, for benchmarking services, which are not core functions of the Department of National Defence.

Would you agree that there's a difference when the Department of Defence is dealing with something that would be outside the core function of employees, a difference between cleaning services and benchmarking services?

[June Winger]

I would say that there's a difference between cleaning and benchmarking services. I think most people would agree with that; however, I would say that benchmarking services are something that the membership could provide. These are members who have worked at National Defence for well over 30 years. They have seen people come and go and they've seen all the new plans come and go. They've seen the leadership turn around, yet we still see the exact same thing with our work. We are quite familiar with what the challenges are with our work and what paths need to be taken.

I think that we do have a lot to offer with the benchmarking and, with proper consultation, I think that a lot more could be done.

Frankly, it's more an issue of listening and actioning and not just sitting and looking for the narrative that you want to hear and then proceeding with that. That's part of the challenge that we have at National Defence. It's steeped in tradition, and they like to protect it and maintain it.

[Anthony Housefather, Liberal, Mount Royal, QC]

I understand. I think that a dialogue on both sides is always very important. I think you have to hear one another, and I think that in this case, for example, I understand what you're saying, but benchmarking also involves looking at what is happening outside of Canada, looking at foreign practices that might be best practices that are similar. Would department officials have that expertise?

[June Winger]

Certainly we would have a great deal of expertise in that, because we do collaborate with other militaries on a regular basis—not just the military members, but also the civilians. In my work, I would often collaborate with others within NATO. That's a common thing to do.

I'm not saying that this is their expertise; I'm not saying that at all, but I am saying that nobody knows their work better than the workers—nobody.

[Anthony Housefather, Liberal, Mount Royal, QC]

I agree that nobody could possibly know somebody's own work better than the person who performs it. I always believed, when I was a manager, that you had to make sure that you knew that work as well as your subordinate did, because you had to be able to justify why you were there. You have to be able to understand what they were going through every day, so I get that.

I just think that this is a little bit different, again because it involves a profound knowledge that wouldn't be the day-to-day contact between our forces. I guess I would just ask the question. I understand, and I think we all acknowledge, that there has to be a good look now at how outsourcing works within our federal government and a look at where, outside of surge capacity or outside of specialized services that would not be core services, we need to examine how much we outsource. You would agree that there are some times it's needed—for example, for surge capacity or for specialized services that would be not everyday services. It would be inconsistent and you need it once or twice a year, but there are calls sometimes to have outsourcing, correct?

[June Winger]

Certainly there are occasions for outsourcing when the work is going to require a specialized field that's not normally required and will not be required on an ongoing basis, definitely, but it's nearly impossible to figure out what that is, because the information that is shared with us on what that outsourcing entails is so limited. Even when we were doing our 2020 report, I put in 45 ATIP requests. I'm still waiting on 27.

I've seen, from the discussion around this table earlier this week, forms being fully redacted and pages being completely blank. This is an ongoing frustration. Frankly, I don't know that there is a lot of coordination in determining what the outsourcing is at National Defence.

I'm reminded of the time when I was a vice-president for Alberta in the north, and I met with the land forces western area commander at the time and asked him to provide me with the list of all the contracting out that he had underneath him. He told me that he would have to stop his entire office working for a full year and work only on that, and they still wouldn't be able to tell me how many contracts they have ongoing, so I'm not sure that we'll be able to necessarily agree on this.

[The Vice-Chair, Liberal, Majid Jowhari]

Thank you, Madam Winger.

The next six-minute round goes to Madam Vignola.

Madam Vignola, you have the floor for six minutes.

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

Thank you very much, Mr. Chair.

Ms. Winger, last Friday, virtually on the sly, the Treasury Board Secretariat issued an update on the McKinsey contracting investigation. A number of issues were raised: missing signatures, missing key documents for several awards, payments to the firm before it had even rendered its services, and so on. I have a list of a dozen items. It's a long list of failures, and it looks like this is just the beginning.

Are you aware of any orders given to your members to expedite contracts if they have to, including to McKinsey or any other firm, ignoring existing regulations and policies related to the awarding of those contracts?

[June Winger]

I don't have that information.

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

Thank you.

If any of your members ever came to you with reports of breaches of procedures or application of regulations and policies, what would you be able to do to support them and ensure that contracting is done properly?

[June Winger]

This becomes a bit of a challenge. Certainly our members are invited to bring their observations up through the chain of command, up to management. They can also come through over to me. As I raise things with my counterparts at the Department of National Defence, I can raise my observations to them. I can raise the members' concerns to them, but there is no leverage there to force them to do anything about it. We are left with the same routes as everybody else—perhaps bringing up a complaint to the office of wrongdoing, the ombudsman or these sorts of groups.

I will say that when members have raised concerns previously, they have felt dismissed. They have felt that their concerns were not going to be strongly considered and that it would probably be in their best interest for their career progression to just consider other things, but I couldn't speak to the specifics.

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

So among your members, there are people who in the past have made observations that could have led to improved practices and operational efficiencies, but ultimately didn't feel heard and didn't feel there was a desire to improve from higher up. Either that, or they simply did not speak up. Did I get that right?