Evidence of meeting #35 for Government Operations and Estimates in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was report.
A recording is available from Parliament.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
How about consequences for the people who are allowing this to happen?
Procurement Ombud, Office of the Procurement Ombud
Absolutely. You have to imagine how many different people were involved in the implementation of the strategy over 30 years. The same person didn't sit in the chair for 30 years. This touched many hands.
I would say that there is a requirement for accountability and to ask how the implementation has taken 30 years. Everyone talks about the requirement of 5%. Every single deputy in Ottawa, I would suggest, is fundamentally aware of the obligation to deliver on their 5% obligation, but I challenge them to explain all of the tenets associated with the PSIB and how they apply. That's why we argue that the 5% has become a bit of a confusion point, because when it's met, it seems to indicate that the strategy is working. It allows people to relax and feel like everything is working as it should, but when we break down the integrity of that 5%, we start to then question whether the attributes that are....
This is where I want to be careful how I say this, because our office supports all of the tenets of the procurement strategy for indigenous businesses. It's the implementation that is the failure point. Again, it's not the indigenous supplier who's to blame for any of this. The blame is in the implementation.
To go back to the accountability piece, yes, absolutely, I also would like to see accountability. My recommendations have to be about the improvement of the procurement practices. I can't make recommendations around accountability, but that being said, I'm glad we're talking about it. I'm glad that this report is being made public, because I do—
Oh, I'm sorry.
Conservative
The Chair Conservative Kelly McCauley
I let you go on because it's important to hear.
Go ahead, Ms. Sudds.
Liberal
Jenna Sudds Liberal Kanata, ON
Thank you very much, Chair.
Thank you very much for the report and for being here today to give us an opportunity to dive into it and discuss it more. It demonstrates, I believe, that our government, certainly in this process and in this discussion, has a deep desire to ensure that indigenous procurement delivers real, tangible economic benefits. This discussion around how we can do better is always productive and welcome. I certainly welcome the recommendations as they've come forward.
You mentioned in an earlier response that you were working behind the scenes with a department, which I assume is ISC, on the process for disputes. Can you speak to us a little more about where that dialogue is at?
Procurement Ombud, Office of the Procurement Ombud
Just to clarify, that dialogue is with PSPC.
There have been several communications with the chief of staff of the minister's office around implementation. We have a deliverable that we are to provide to the chief of staff, breaking out the implementation options in terms of formality, in terms of process and in terms of timelines.
Liberal
Jenna Sudds Liberal Kanata, ON
Okay. Thank you for that. I'm just trying to understand where we're at so that we can continue to move this forward.
To what extent do you believe the gaps identified through your work are policy gaps versus implementation gaps?
Procurement Ombud, Office of the Procurement Ombud
That's a great question, Mr. Chair.
I think it starts with the policy gap. There's inconsistent information being provided. You have to remember that this implicates all departments and agencies, so consistency of approach is something you would want at a centralized level.
As you would see from our report, many of the sources of information are disconnected and are not all saying the same things. Based on our fragmented procurement system, you'll note that where people look to glean information that's authoritative also differs from department to department. As a result, things as basic as whether they need to consult the indigenous business directory prior to awarding a contract are not consistently understood. “Does the 33% apply to my contract, yes or no? Where do I go for that information?” Depending on your source, you might get different answers, and these present very different outcomes.
To answer your question, I think the first piece is the policy piece, but that being said, I still don't think it lets us off the hook for the implementation failings. It's not lost on me that 30 years is a clear indicator that this is not a political problem. This spans multiple governments, and PSIB continues to be talked about by consecutive governments. The issues are well understood and well known. I think, again, that it's back to making sure that the accountability is there.
Again, I'm not suggesting that our office can fix all the problems, but what we are trying to do is bring accountability into this. That's why we are going to review after six months and report publicly on progress, because you'll also see the departments' answers in our report. They have commitments in terms of timing, and some of those commitments are coming up relatively soon. There are action items for fall 2026, with implementation in early spring 2027. These time frames are quick.
To be fair to ISC, they have been working in the background for many years in trying to resolve some of these outstanding issues. I think that the transparency piece is important too, because I understand they've been subjected to a number of reviews, and I imagine they're also exhausted from just the sheer number of responses that they've had to provide to all these questions.
That being said, it doesn't excuse the fact that implementation is still not at the point where we're fixing the problems.
Liberal
Jenna Sudds Liberal Kanata, ON
Exactly on that, on the implementation piece, from your perspective, are there immediate steps—perhaps it's clearer direction, perhaps it's training—that could be implemented that would lead to better outcomes?
Procurement Ombud, Office of the Procurement Ombud
Yes, absolutely, there are. Fundamentally, the great thing about having the opportunity to be before the committee is that it brings awareness. Awareness can then also identify additional gaps that others were not aware of.
Training is certainly always part of the answer, and I will suggest that if you talk to procurement practitioners, that is something they're begging for. One of the top three issues we hear from procurement purchasers in government departments is they need additional training. As obligations change or are encountered for the first time, if the proper training is not provided and there isn't a consistent, centralized policy, it's not fair to them to say that they've somehow failed; it's that the integrity of the process has failed them.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Thank you, Mr. Chair.
I must tell you that I didn't know the extent of the situation. I find something troubling. In 30 years, we've made enormous progress in the whole truth and reconciliation process. However, what we're hearing falls within the realm of a wish. It's one thing to wish for something, but when the time comes to put things into practice, we often lack solutions. We lack tangible measures when we say that we want to demonstrate responsibility and that we'll apply a truly beneficial mechanism.
Seriously, I can't believe the choices being made here. I heard my colleague talking about this just a few minutes ago. If we really wanted to move towards truth and reconciliation and if we made that choice, there would be action. Some steps have been taken, but there would be concrete measures.
I really want to thank you for all your recommendations. I have certain expectations, now that we have a government that can decide to do an about‑face on all sorts of policies. I don't know whether you agree with me. We can see whether we'll take the bull by the horns and really rise to the challenge.
What are your thoughts?
Procurement Ombud, Office of the Procurement Ombud
It's necessary to take action. However, as I said, the foundation is solid. It's a matter of implementation. The policy must clearly establish who is responsible for what. It must formalize all aspects of the foundation, so that everyone knows where their responsibility lies and everyone knows how to remain transparent about that responsibility.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
I can see that, when things aren't clear, we find a good reason to explain why it hasn't been done.
So who should clarify everything?
Procurement Ombud, Office of the Procurement Ombud
That's our first recommendation. We asked Indigenous Services Canada to take responsibility for the new policy. We showed them which aspects of the foundation should be included. To ensure transparency, every six months, we'll look at which recommendations have been implemented. If no action has been taken to make a change, we'll show this. I hope that we're truly in a period of change, as you clearly described, that can force the government to make different choices now that it has more power. If it has the willingness to demonstrate the need for action, we'll see this. That said, transparency is key. If we let two or three years go by, there won't be any change. If the people responsible for taking action know that in six months another report will come out, we'll see results that we wouldn't see otherwise.
Again, I'm not saying that our office is anything miraculous. Nevertheless, we do want to establish transparency. By the way, perhaps this committee can add its voice. If you express an ongoing interest in this topic, it will further demonstrate to the people in this department that Parliament wants to know what work they're doing and what steps are being taken. It wouldn't increase the pressure. That isn't the right word. However, it would make the people in charge more accountable.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Mr. Chair, I took the initiative of cutting into my next turn. I realize that I had a bit more time.
Thank you.
Conservative
Conservative
Harb Gill Conservative Windsor West, ON
Thank you, Chair.
Thank you, Mr. Jeglic, for being here
I'll start by grounding on what your own report says—not what we think, but what you found.
Your opening statement was a fairly strong indictment of the current system. You described the administration of PSIB as “deeply disappointing.” I spent three decades in policing, and when systems are described this way, it's not usually one mistake: It's a pattern. It's a culture. It's oversight failing at multiple levels.
What's concerning is not just what's broken, but how long it has been allowed to stay that way, and that reflects a lack of accountability.
Were you surprised by what you found, or were you frankly alarmed by the breaches across multiple departments?
Procurement Ombud, Office of the Procurement Ombud
I'll start by saying that I don't traditionally include a foreword in our reports. The reason I did is that I was both surprised and negatively shocked by what we saw.
If I can tell you a little bit about our process, halfway through it we provide preliminary observations, which is like doing a vetting to ask the departments whether what we're seeing is accurate. If not, they can help us understand what we're seeing. Truthfully, the preliminary observations were certainly bad, but it was our expectation that there would be explanations and additional context provided that would help us understand some of the failings we were seeing. When we didn't get that response back after showing the preliminary observations, we started to realize that this was, in fact, what we were seeing.
That is when it became clear to us that if you identify each aspect of the report as its own singular failure, you might think it's not that big a deal. The reason we describe it as a “cascading failure” is that each point builds off the next. You can't look at an individual issue and say, for example, that documentation is not a big deal. Well, what does that documentation represent? What does the lack of contract clauses represent? What does the lack of mandatory audits represent, or the lack of a dispute resolution mechanism, or the lack of integrity around the 5%? When you look at each one individually, again, you might say that overall, it's not that big a deal. I would argue the 5% is different. I would argue the 33% is different. It's when they're taken in sum that you start to feel almost a sadness that this has happened.
Again, I'm not suggesting that our office can fix the problem. What I am suggesting, however, is that with accountability and focusing on those important foundational elements of PSIB, this is fixable. It helps the integrity of the process. It helps indigenous suppliers that you can't convince to participate in the procurement process. They will come to the procurement process if they believe in it.
It's all of our responsibility to ensure that the federal procurement process across the board is something all Canadians can believe in, and it's incredibly important. The spend associated with federal procurement is enormous. Therefore, any type of policy implementation issue is so impactful. That's the part that I can't stress enough.
Conservative
Harb Gill Conservative Windsor West, ON
I couldn't agree more. It seems like a systemic and cascading failure.
Your review found that in over 75% of the files, departments couldn't explain whether a set-aside was mandatory, voluntary or conditional. That's not a grey area. That's just a basic understanding of the program. Were you surprised by that level of non-compliance? The last time you were here, we discussed the issue of the training of the staff that oversees the contract process. You indicated at that time that just about all departments are not doing an adequate job on that front, and you repeated that today.
The second question is this: Is anybody listening to you, or are they simply ignoring your advice and recommendations and doing whatever they want to do because there are no hard consequences, as my friend pointed out earlier?
Procurement Ombud, Office of the Procurement Ombud
To give the committee confidence, I do think more people are listening to our office. I interact with multiple stakeholders—with suppliers, with buyers, with parliamentarians—and I will say that the level of awareness associated with our work has significantly grown. I will say that the number of contacts with our office has significantly grown. As a result, I know that the work we're doing is impactful.
If you'll allow me to link one aspect, you'll notice in the second part of our report that I identify five foundational changes. I think those foundational changes are the baseline of what needs to change in federal procurement. Before we start building on the pyramid, the base has to be strong. I bring those five recommendations up in this report because they would help to address many of the things we saw in this report, so we have to take those recommendations seriously.
On the 75%, each one of the set-aside methodologies is different, so you're looking at different criteria. One, who is the end user? Is it going to an indigenous population? Two, is there indigenous capacity to deliver? Now you're looking at the supplier community. The third is that if you don't know if there's capacity, you create a conditional set-aside, but we saw no information identifying how to even use a conditional set-aside. It's available, but no one can effectively use it. That's because the terms and conditions don't exist, and that creates risk.
Liberal
Pauline Rochefort Liberal Nipissing—Timiskaming, ON
I noted that in your comments you mentioned that Indigenous Services Canada is currently reviewing the indigenous business directory.
I was just wondering, even though you're not doing that audit, if you could comment on why they're doing that.