Government Operations Committee on March 4th, 2022

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

Okay. Thanks.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Johns. That ends our first round.

We will now go to our second round. Starting with five minutes will be Mr. Lobb.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Thanks very much, Mr. Chair.

My first question is for Mr. Perron. I think I remember Mr. Perron from my Health Canada days years ago. It's getting to be quite a few years ago now, but it's nice to see you here today.

Almost a year ago today, there was quite a bit made of the Cisco situation. It was sole-sourced, there were no tenders, and there was a comment made—it was in the news—about sufficient context.

I'm curious. Now that you're the person in charge, will there be transparency going forward on decisions like these, where you have a vendor consistently being chosen without opening it up and allowing other companies to provide their comments on whether they could fit the form and functionality of the goals?

[Sony Perron]

Last year, when we appeared in front of OGGO, we discussed the fact that we had published, at that time, what we call the network modernization way forward strategy. In this document, which was the subject of consultation and engagement with industry, there was a list of upcoming procurement measures that would be taken to modernize the network.

I'm pleased to report that most of these initiatives, which include a lot of competitive, open-generated procurement, have been launched and achieved. My numbers on this are that we have 37 completed or initiated, and six still to be started.

This document was subject to a lot of engagement with industry to give us a sense of where SSC, based on the engineering assessment, would be able to generate procurement or where we need to continue to use equipment-specific for some time. Even where we do equipment-specific—in this case you mentioned Cisco—we still allow competition among the resellers of the product. It's not going to Cisco; it's going to the market for bidding.

We have also put an internal review process in place at SSC for any equipment-specific requirements for networks to be reviewed by an independent group, including an external adviser, to make sure we have a sound rationale technically to go there. As we've explained in the past, our network, which is made of around 170,000 parts and pieces of equipment, is highly dependent on what we had before. We readjust it over time. The fact that we have a lot of Cisco means that sometimes we need to replace it with Cisco, but that's not always the case.

I have good news, and this is encouraging for me. We're seeing a progression, an increase, in terms of what is going to Cisco competitors. Three of them in 2021 got a major increase. Extreme Networks had an increase of 100%, from $1.3 million to $2.7 million for the year. Fortinet went from $3.8 million to $10.7 million. Juniper went from $4.5 million to $7.2 million. There is a signal of progression. We are not there. It's going to take multiple years, but we have the foundation of a very transparent and sound process.

The goal at the end is to have something that is reliable and avoids difficulty for critical applications to operate in the Government of Canada.

[Ben Lobb, Conservative, Huron—Bruce, ON]

I understand.

I have another point and then I'll get off this topic. There were some comments that Shared Services Canada officials were working together with Cisco employees to develop rationale. I think that was the wording. I don't think the public is happy to hear those types of things, because it's not transparent and it looks like the fix is in.

As the CEO or president of Shared Services Canada, what are you going to do to make sure practices like this don't happen?

[Sony Perron]

Thank you very much. I appreciate the question, Mr. Chair. It gives me the opportunity to clarify this incident, which was covered by the media. I think everybody was affected by looking at this news.

One thing I need to say is that we are committed to transparent and fair procurement. In this instance, it was a junior officer who went beyond the expectations in terms of engaging and working with the industry. Our staff work with all of the industry partners all the time, because this is what we need to make the system work and to understand what we are using to fix the problem. This was not appropriate, but it was a junior officer. Measures were taken to make sure that the employee received training and proper guidance to avoid that.

I want to reassure committee members that there was no influence of this action taken by the employee on the said procurement. The procurement was the subject of discussion with the industry. We made some adjustments, but they were not related to the issue of this employee reaching the vendor. It did not affect the direction. The rationale that this employee developed has not been used to direct the future of this procurement.

I want to say that this is very important. We care about integrity and keeping public trust on this. It was really disturbing, and we have taken the proper measures in assisting this employee to understand proper behaviour.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Perron.

We'll now go to Mr. Bains, for five minutes.

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

Thank you, Mr. Chair.

Welcome to our witnesses, and thank you for joining us today.

My question is coming from Richmond, British Columbia. I'm interested in the Seaspan shipyard because of its importance to the marine sector out here on the west coast. It's an important part of the national shipbuilding strategy. Can you tell us what Seaspan has been building for this government and what contracts they have going into the future?

[Paul Thompson]

Thank you, Mr. Chair, for the question.

I see we've now been joined, after some technical difficulties, by Simon Page, our assistant deputy minister, who shares this responsibility.

I will just indicate that for the Vancouver shipyard, we have a very active program of work, totalling $5.3 billion. There are a number of vessels that they have been involved with and will continue to be involved with, in terms of procurement.

I might ask my colleague Simon to elaborate.

[Simon Page, Assistant Deputy Minister, Defence and Marine Procurement, Department of Public Works and Government Services]

Thank you, Mr. Chair.

Thank you, Deputy.

My apologies for the technical difficulties.

Indeed, as mentioned by my deputy, there is a very active program of work at the Seaspan Vancouver shipyard. There are numerous projects under way.

The first one to note for this committee would be the completion of the offshore fishery science vessels. This project is ending now. This is the first full class of ships accepted and delivered to the Canadian Coast Guard under the national shipbuilding strategy. The last of the vessels, CCGS John Cabot, was accepted and delivered in 2020. We are now completing the warranty period for this vessel.

In motion at the yard at the moment are two other projects. One is the joint support ships for the Royal Canadian Navy. This project will deliver two joint support ships for the navy. The first is in construction now and at a good stage of completion, and efforts are progressing. We expect to have a cut steel date for JSS number two. That's being discussed at the moment.

The other project under way at the Seaspan shipyard is the offshore oceanographic science vessel for the Canadian Coast Guard. This project started with the cut steel in March 2021. It is on the way now. It is also in a good stage of progress and is achieving a good completion rate.

In motion also, but at a lower degree of implementation, are two other projects. Up to 16 multi-purpose vessels will be delivered to the Canadian Coast Guard, and the polar icebreaker was announced by government last spring, in May 2021. These two projects are in definition, and some key design efforts are under way now. We are working towards some contract awards for construction, engineering and long-lead items in the very near future.

That completes the program of work at the Vancouver Seaspan shipyard at the moment.

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

How many jobs are associated with these contracts, particularly for people in the Vancouver and the Lower Mainland areas?

[Simon Page]

At the Vancouver shipyard, there are over 1,000 employees. Those employees would be from the Vancouver and the Lower Mainland areas. Among those 1,000-plus employees, about 700-plus would be what we call the blue-collar workforce, people building the ships, welding and doing all the technical aspects of shipbuilding. Then there is the white-collar workforce and the management workforce on top of that, for over 1,000 jobs at the shipyard.

There is an effort under way at the shipyard to increase the workforce as more complex projects are now slowly approaching. They are either in implementation, in the case of the joint support ships, or approaching implementation, in the case of the polar icebreaker.

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

On the growth you're talking about—there's going to be job growth—with the number of projects you've indicated here, how many years can we expect this work to be going on for all those employees?

[Simon Page]

This work will be for multiple years, for a really long time. The key projects here, after the ones currently in implementation—i.e., the multi-purpose vessels and the polar icebreaker projects—are in definition. The implementation of those vessels will be over quite a few years. We're looking at 15 or more years of work at the Vancouver shipyard if the entirety of the program of work is executed.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Bains.

We'll now go to Mrs. Vignola for two and a half minutes.

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

Thank you very much, Mr. Chair.

l am going to go back to Phoenix.

I was looking at the plan for 2022-2023. The percentage of cases submitted on time to the pay centre was 70% in 2020-2021. However, the objective for 2022-2023 is 65%. So the objective is lower than the percentage that was already achieved in that year. The same goes for the percentage of cases submitted to the pay centre on time and processed on time.

Why are the objectives set lower than the percentages that have already been achieved?

[Paul Thompson]

Thank you for the question.

Two things must be considered.

First, there is an operational delay on the part of our colleagues in other departments in submitting cases, data and transactions to the pay centre. We are working very closely to improve that delay.

Second, there is the service rate. As I mentioned, we have obtained a rate of 80% for processing transactions.

This is the new intake, where we are achieving 80% service standard. That is critical to managing the intake side of it while we also have resources dedicated to the backlog.

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

In the supplementary estimates (C), you are asking for $17.3 million to eliminate the backlog of pay problems.

First, given the current situation, could you not foresee those expenditures and ask for all the money you need right away, in the main estimates?

Second, how much money has been spent to date, to the last cent, to try to fix the salary backlog problem? Even if we have only 2% of the critical cases left, we are still talking about people, not percentages.

[Paul Thompson]

I will ask my colleague to add some comments.

We are working very hard to clear the backlog.

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

How much money has been spent?

[Paul Thompson]

Maybe I'll turn to Wojciech to answer on the—

[The Chair, Conservative, Robert Gordon Kitchen]

If it's going to be lengthy, you could provide it in writing, but if it's quick, then by all means go ahead.

[Wojciech Zielonka]

Mr. Chair, I can give a very quick answer.

To date, we've spent $2.134 billion to respond to pay issues since the launch of the Phoenix system.

As for the other question, it is not always possible to know the entire cost of a program because there can be changes. We are making great efforts to improve the pay situation. It's a major effort for our department.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you.

We'll now go to Mr. Johns for two and a half minutes.

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

Thanks.

PSP's “2020 to 2021 Departmental Results Report” says:

The department also completed a two-year pilot to assess the use of socio-economic criteria in procurement. The findings demonstrated that socio-economic procurement is a promising tool to increase the number of contracts awarded to underrepresented groups [such as indigenous peoples], create community benefits and provide employment and skills training opportunities for underrepresented suppliers.

Can you talk about what socio-economic criteria were selected and how they were selected? Also, does PSP have a plan to make the pilot project a permanent program? If so, when?