Government Operations Committee on June 21st, 2023

[The Chair, Conservative, Kelly McCauley]

I call this meeting to order.

Colleagues, welcome to meeting number 75 of the House of Commons Standing Committee on Government Operations and Estimates.

Pursuant to the motions adopted by the committee on Wednesday, January 18, 2023, and Monday, April 24, 2023, the committee is meeting on the study of federal government consulting contracts awarded to McKinsey & Company.

Pursuant to Standing Order 111.1(1), the order of reference from the House of Wednesday, June 7, 2023, and the motion adopted by the committee on Monday, June 19, 2023, the committee is also meeting to consider the nomination of Harriet Solloway for the position of Public Sector Integrity Commissioner.

Colleagues and witnesses, please do not put earpieces next to the microphones, as it causes feedback and potential injury. Apparently it is worse in this room than the others, so please be aware.

In accordance with our routine motion, I am informing the committee that all witnesses appearing by video conference have completed the required connection test in advance of the meeting.

We have three opening statements. First will be a short one from our law clerk. Then we will go to Mr. Shea, and then to Mr. Dermarkar.

Mr. Bédard, go ahead.

[Michel Bédard, Interim Law Clerk and Parliamentary Counsel, House of Commons]

Thank you, Mr. Chair.

You asked me to explain and clarify the right of the House and its committees to send for papers and records.

This right to send for papers and records is one of the parliamentary privileges that the House of Commons and its committees have. This power is constitutional in nature, and it is subject only to the limitation that Parliament, the House or the committees will impose on themselves.

When requesting documents, sometimes a committee may be faced with a confidentiality claim. In such circumstances, the committee may decide to put measures in place to protect sensitive information; it may decide to no longer insist on its production order; or it may decide to insist on its production order and insist on the production of documents unredacted. Ultimately, it's for the committee to decide what option it wants to choose.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Bédard.

Mr. Shea, go ahead.

[Matthew Shea, Assistant Secretary to the Cabinet, Ministerial Services and Corporate Affairs, Privy Council Office]

Thank you, Mr. Chair.

Good afternoon, members of the committee.

Thank you for inviting the Privy Council Office to return to provide you with further information and respond to your questions about the government's response to the motion for the production of documents concerning contracts awarded to McKinsey & Company.

My name is Matthew Shea, and I am the assistant secretary to the cabinet, ministerial services and corporate affairs at the Privy Council Office.

I would like to keep my opening remarks short to allow greater time for questions. I also delivered opening remarks when I last appeared before this committee, on June 5, 2023, which can be referenced.

The Privy Council Office understands and respects the role of Parliament in holding government to account and is committed to providing information to parliamentarians in a transparent manner. As has been the approach of successive governments, we must balance this commitment to transparency with the need to maintain the confidentiality of certain types of information.

We welcome opportunities to work with parliamentary committees to explore ways in which we can balance these two priorities and share information.

The Privy Council Office issued one sole-source, non-competitive contract to McKinsey in 2017, in the amount of $24,747, during the period for which the records were requested. The Privy Council Office submitted all its documents in both official languages on February 22, 2023. Of the 280 pages submitted, redactions remain in only two paragraphs that relate to cabinet confidence.

Mr. Chair, committee members, thank you for the opportunity to appear before you again today.

I look forward to answering your questions alongside my colleagues.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Shea.

Mr. Dermarkar, go ahead, please.

[Fred Dermarkar, President and Chief Executive Officer, Atomic Energy of Canada Limited]

Thank you, Mr. Chair.

Good afternoon, everyone.

I am Fred Dermarkar, president and CEO of Atomic Energy of Canada Limited, a federal Crown corporation that works to advance Canada's interests through leading-edge nuclear science and technology and environmental protection initiatives.

Our work at the Chalk River Laboratories led to the development of the home-grown CANDU nuclear reactor technology.

Today, we are a lean, flat, commercially-oriented Crown corporation that adapts to the demands of the market and the government and works with the private sector to achieve our mandate.

The Government of Canada is committed to achieving net-zero emissions by 2050, which requires all solutions, including nuclear technologies. AECL is investing in ways to apply nuclear technologies to help achieve Canada's goals, including CANDU reactor technology, which has proven itself as one of the top-performing reactor technologies in the world today, as well as small modular reactors.

Our recent work with McKinsey analyzed the potential role of nuclear and compared different reactor systems, including our very own CANDU reactors. The report prepared by McKinsey has been used to inform AECL's strategic plan and future work in support of the government's objectives to achieve net zero by 2050. This report underlined the significant potential of nuclear technology, particularly CANDU technology, to address Canada's climate change goals in the context of a focus on energy security, supply chain resilience and economic development.

Nuclear energy not only advances climate goals and provides energy security, but it contributes to Canada's GDP and employment.

The nuclear sector in Canada today accounts for 76,000 jobs across Canada and adds $17 billion per year to Canada's GDP.

We can leverage decades of investment in CANDU technology and intellectual property, create additional economic and energy security benefits for Canada, position the innovative next-generation CANDU for export, and cement Canada's leadership in an area that is critical to our future prosperity.

I am available to answer any questions that the committee may have.

Thank you, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Thank you, sir.

We'll start our first round with Mr. Barrett for six minutes, please.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Thanks very much, Chair.

Thanks to the witnesses for being here.

My first question is for Mr. Bédard.

Is there a limit or a legal restriction as determined by Canadian courts on the power of parliamentary committees to order the production of papers?

[Michel Bédard]

The courts have recognized the existence of the power to send for records and papers. In parliamentary privilege jurisprudence, they have recognized that the exercise of the privilege itself is not something that is subject to court scrutiny. The manner in which the privilege is exercised is for Parliament alone to decide and, in recognizing the power to send for records and papers, they haven't set any limit to this privilege.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

How would you characterize a scenario where a committee of Canada's House of Commons ordered the production of papers, and the entity from which the production was requested did not comply? How is that characterized? Is that a breach of the privilege of the House of Commons? Does it rise to being illegal? How is that characterized?

[Michel Bédard]

When there is a production order from a committee and their concerns are raised with respect to some of the information that is sought, the entity from which the information is requested may try to put in place or suggest some measures to protect the information for which they have concern. The committee may decide to accept those measures, may accept to no longer insist on the production order, or may decide to insist on the production of all the information unredacted. If this is the case, and the order of the committee is not complied with, the committee can report back to the House. Based on the committee's report, this could be raised as a question of privilege in the chamber.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

That's the appropriate venue for it to be escalated should the committee's request not be satisfied.

[Michel Bédard]

That's correct. The committee has the power to adopt an order for the production of documents but does not have the power to sanction. That power belongs to the House, and the proper process is for the committee to report to the House, and then a question of privilege can be raised and the Speaker will rule on the matter.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Thank you.

Mr. Shea, did PCO direct departments or anyone within PCO to defy the will of this committee?

[Matthew Shea]

PCO did not direct any department nor its own employees to defy the will of the committee. However, PCO has used the same long-standing approach to the redaction of its own documents and would give the same advice to others.

There are long-standing principles used by successive governments, which limit the information that is provided.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

The committee ordered the production of documents, and PCO did not meet the request. We heard testimony yesterday, or we heard read into the record access to information results, an email from PCO that explained there was no attempt to satisfy the production order of the committee.

Are you familiar with the email that I'm referring to?

[Matthew Shea]

I have not seen the email. I do not believe it has been provided to us.

My understanding is that there was an email that was referred to, if it is the one I'm thinking of, that was between Paul MacKinnon and Maia Welbourne. Is that the email you're referring to?

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Yes.

[Matthew Shea]

Maia Welbourne left PCO in advance of when this particular parliamentary motion took place. While I have not seen the email, I can say with confidence that it would not relate to this particular motion, as she was not a PCO employee at the time.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

What it relates to, sir, is the attitude of PCO to defy the obligation of your department to honour the responsibility that you have when an order of a committee of Parliament is made for you to produce documents.

It's not subject to any test that you choose to apply to it, or if you look to past practices of your predecessors or other individuals. That's not the test that needs to apply. The test that needs to apply is that we have the power, as Parliament, to request those documents. Your failure to produce them is a breach of the privileges of Canada's Parliament.

What happens when you do that, as a department, when PCO does that or agents acting on behalf of PCO do that...and they do it during successive governments. They say, “Look, we've been doing this for a long time.” I don't think that's an encouraging sign to Canadians. I don't think it's an honourable defence for someone to say, “Well, we've been breaking the law for 10 years. There are lots of different people who held elected office over the course of 10 years and we got away with it, so we're going to continue to do it.”

That's the precedent that has been established. There are hundreds of years of precedent that this law has existed under. Parliamentary privilege is not subjected to tests applied by PCO or by departments. It is a question that has been settled in law. I have not heard an argument from you that excuses you from your responsibility to furnish this committee with those documents.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Barrett.

Mr. Kusmierczyk, go ahead.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you, Mr. Chair.

I have a couple of questions regarding the costs. This is a question for Ms. Bernier and the Public Sector Pension Investment Board.

First of all, can you tell us a little bit about the Public Sector Pension Investment Board and what this organization does?

[Mélanie Bernier, Senior Vice-President and Chief Legal and People Officer, Public Sector Pension Investment Board]

Yes, thank you for your question.

PSP is a Crown corporation that operates at arm's length from the government. Our mandate is part of our constituting act. It is to invest the funds that are transferred to us from the government in the best interests of the beneficiaries and the contributors and to maximize return without undue risk of loss.

We invest globally around the world in different sectors and industries in order to achieve our mandate.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Who are you managing these investments for? Could you repeat that?

[Mélanie Bernier]

We are managing the amounts that are transferred from the government for the funding of the post-April 1, 2000, liabilities for the pension plans of the federal public service of Canada, the Canadian Forces, the Royal Canadian Mounted Police and, since March 1, 2007, the reserve force, as well.