Public Accounts Committee on June 12th, 2007

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Thank you.

Mr. Roy, Anthony Koziol and Pat Casey both testified before this committee that they were instructed to keep the focus of the business plan strictly around Morneau Sobeco's numbers. Is that correct?

[Garry Roy]

I wasn't involved in negotiations with either of those. I didn't do any contracting. So I don't see how I would even say that.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

So you weren't involved in the business case development?

[Garry Roy]

No, I didn't write it. I didn't author it. I participated in the evaluation of the options.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Okay.

So you didn't have any kind of communication with Pat Casey to say that he should stay, because he testified at the last meeting here that he got that information from you. Mr. Koziol said he found it very odd and that it wasn't a complete business case if it didn't include other vendors.

[Garry Roy]

That's true.

[The Vice-Chair, Conservative, Brian Fitzpatrick]

Your time is up, Mr. Sweet. Thank you.

Just a clarification. I'm confused on the issue. On the insurance outsourcing, the purchaser or the client obviously is the RCMP on this matter. I'm trying to figure out who the contract was with. Was the contract with Great-West or was it with Morneau Sobeco?

[Frank Pattie]

We contracted with the RCMP and subcontracted the work to Morneau Sobeco.

[The Vice-Chair, Conservative, Brian Fitzpatrick]

So if there was a breach of contract here, the RCMP would have been calling on Great-West Life to deal with the matter?

[Frank Pattie]

Yes. We had a lot of discussions between ourselves and Morneau Sobeco in trying to incorporate appropriate indemnities into the agreements.

[The Vice-Chair, Conservative, Brian Fitzpatrick]

Thank you.

Next on the list is Mr. Roy.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

Thank you, Mr. Chairman.

Mr. Pattie, I would like to come back to what you said earlier to my colleague. You stated that there was no contract with the Royal Canadian Mounted Police, yet for the last while we are only talking about a contract and an agreement. You stated—and I am not the only one to have heard this—that there was no contract.

Was there, yes or no, a contract between the Royal Canadian Mounted Police and Great-West Life, and was this contract awarded without a call for tenders, did it just happen like that?

[Frank Pattie]

Is that directed at Mr. Casey or me? The translation said Mr. Casey.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

It's for you.

[Frank Pattie]

The contract to do the outsourcing work was between the RCMP and Great-West Life. Subsequently, we contracted that work to Morneau Sobeco.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

All right. You have answered my question. A little earlier, you stated that there was no contract.

Great-West Life, which had been working for the Royal Canadian Mounted Police for years, was chosen as the insurer to continue to provide the service which it had already been offering the Royal Canadian Mounted Police, and it happened without bidding from any other insurance company. So your company was the only one the RCMP dealt with, and somehow Morneau Sobeco ended up being the subcontractor. In other words, no other insurance company was contacted when the contract in question went out.

Was any insurance company other than Great-West Life contacted to see whether it would be interested in providing the insurance service to the Royal Canadian Mounted Police?

[Frank Pattie]

I'm not sure I fully understand the question, but I'll give it a try.

As Peter indicated earlier, Great-West Life has insured the RCMP for more than 50 years, providing life insurance and disability insurance benefits. The services in question are outsource services, which are services that are normally done by an HR department at the employer. They had asked us to take on some of these services, which we did for some other clients. We felt we could do that work. That's why we had worked with them for approximately a year and a half to develop those business requirements.

As we said earlier, as the requirements developed it became clear that the web-based services were something we couldn't do in this outsourcing capacity. You have to understand that the outsourcing is just a very small part of our business. Normally, Morneau Sobeco does the outsourcing. We had what I'd call a not-so-robust capability, but we felt that with the initial requirements we had from the RCMP that we were quite capable of doing what they had requested. It was only as the requirements became more complicated that we determined we couldn't deliver the web-based services.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

I understand that there was a problem with regard to access to computer services for your client. I clearly understand what you're talking about. But my question goes further than that.

If Great-West Life is my insurance company and it tells me it cannot provide a service I need, and it wants to turn to other insurance companies to see if they can provide the service, I think that I would ask other companies if they can provide the service in question.

But in this case, Great-West Life was the only company which was contacted, and we learned that it had outsourced services to Morneau Sobeco in order to maintain the advantages it had received after working with the Royal Canadian Mounted Police for so many years.

I think it's a matter of ethics. If, as an insurance company, you cannot provide a service, the insured organization must turn to other companies, but not necessarily to a subcontractor, for the services your company is incapable of providing.

I believe you wish to respond, Mr. Foley.

[Peter Foley]

I'll take a stab at it.

First of all, the services that we were asked to provide were services above and beyond the norm of what an insurance company does. They are normal services that a human resource department within a corporation would provide.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

I'm sorry, but I am not getting the interpretation, Mr. Chairman.

[The Vice-Chair, Conservative, Brian Fitzpatrick]

Mr. Roy, you're out of time. I know you have good questions.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

I've lost at least one minute.

[The Vice-Chair, Conservative, Brian Fitzpatrick]

No, we have to move through the list here.

I think I have Mr. Williams on here again. Is that correct?

I'm sorry, I thought you were finished your answer.

[Peter Foley]

Are you okay now, Mr. Roy? Is it okay?

On the services that we were asked to provide, we don't want to harp on the fact that we've been a long-term supplier, but the RCMP wanted to take certain functions that were normally done by an employer and outsource them, have somebody else do them. They came to us. Then we've been through why we stopped the process.

We didn't feel the determination was ours as to who should be the one to take over from us on that. Those were employer-type functions, so we expected the RCMP to make a selection as to who would do that. We didn't see that as a Great-West Life responsibility. We stated to everyone involved that we wanted to fully participate and help our customer, but it was up to the RCMP to determine who they would outsource to, and even, in fact, if they still wanted to outsource those services, and then who it would go to, and we would work with that.

[The Vice-Chair, Conservative, Brian Fitzpatrick]

Thank you very much, Mr. Foley.

We'll go to Mr. Williams now. He's anxious to go.