Public Accounts Committee on June 1st, 2021

[The Chair, Conservative, Kelly Block]

I call this meeting to order and once again welcome Ms. Vignola, who is joining us in place of her colleague.

Welcome to meeting number 35 of the Standing Committee on Public Accounts. The committee is meeting in public today for the first hour, which will be televised, and will move in camera for the second hour to discuss committee business.

Pursuant to Standing Order 108(3)(g), the committee is meeting today to receive a briefing from the Auditor General concerning the reports that were tabled in the House on Thursday, May 26, 2021, which were referred to this committee.

Today's meeting is taking place in a hybrid format pursuant to the House order of January 25, 2021. Therefore, members may be attending in person in the room or remotely, by using the Zoom application. It would appear that we are all attending virtually today.

On that note, interpretation services are available for this meeting. You have the choice, at the bottom of your screen, of either “Floor”, “English” or “French”. Before speaking, click on the microphone icon to activate your own mike. When you are done speaking, please put your mike on mute to minimize any interference. When speaking, please speak slowly and clearly. Unless there are exceptional circumstances, the use of headsets with a boom microphone is mandatory for everyone participating remotely.

Again, should any technical challenges arise, please do advise the chair. Note that we may need to suspend for a few minutes in that case, as we want to ensure all members are able to fully participate.

I'd now like to welcome our witnesses.

Joining us today from the Office of the Auditor General are Karen Hogan, Auditor General of Canada; Glenn Wheeler, principal; and Jean Goulet, principal.

Welcome.

I will turn the floor over to Ms. Hogan.

[Karen Hogan, Auditor General of Canada, Office of the Auditor General]

Thank you, Madam Chair.

I am pleased to discuss our audit reports, which were tabled in the House of Commons on May 26.

I am accompanied by Jean Goulet and Glenn Wheeler, the principals who were responsible for the audits.

The first of the audit reports considers how the government acquired protective and medical equipment during the pandemic. The second looks at how Indigenous Services Canada provided the protective equipment and health care workers that indigenous communities and organizations needed to respond to COVID-19.

Both audits showed that there were issues in planning and stockpile management before the pandemic. For example, in our audit on procuring personal protective equipment and medical devices, we found that before the pandemic, the Public Health Agency of Canada had not addressed long-standing and known issues with the systems and practices used to manage and operate the national emergency strategic stockpile.

The Agency knew of these issues because they had been raised in audits and reviews going back more than a decade. As a result, the Public Health Agency of Canada was not as prepared as it should have been to deal with the surge in requests for equipment from the provinces and territories triggered by the COVID-19 pandemic.

In our other audit, we found that Indigenous Services Canada had not followed its own approach to procure sufficient equipment. As a result, it did not have enough of some types of protective equipment in its stockpile when the pandemic broke out.

However, both these audits also showed agility and responsiveness.

Overall, the Public Health Agency of Canada, Health Canada and Public Services and Procurement Canada helped address the needs of provincial and territorial governments for personal protective equipment and medical devices. Indigenous Services Canada did the same for indigenous communities and organizations. Faced with a crisis, these organizations worked around their outstanding issues with the management and oversight of the emergency equipment stockpiles and adapted their activities.

For example, during the pandemic, the Public Health Agency of Canada improved how it assessed needs and allocated equipment to help meet the demand for personal protective equipment and medical devices from the provinces and territories. It also outsourced much of the warehousing and logistical support needed to deal with the exceptional volume of purchased equipment.

Similarly, Health Canada reacted to the increased demand created by the pandemic by modifying its management of license applications from suppliers for personal protective equipment and medical devices.

Public Services and Procurement Canada also made adjustments by accepting some risks to facilitate the quick purchase of large quantities of equipment in a highly competitive market where supply was not always keeping pace with demand.

If the departments had not adapted their approaches to the circumstances, it is likely that the government would not have been able to acquire the volume of equipment that was needed.

Indigenous Services Canada also adapted quickly to respond to the pandemic and relied on the national emergency strategic stockpile to fill pre-existing shortages of items in its own stockpile, such as gloves and hand sanitizers.

The department supplied indigenous communities and organizations when provinces and territories were unable to provide them with personal protective equipment. The department also expanded access to its stockpile beyond those directly supporting the delivery of health services to include police officers and people in communities who were sick with COVID-19 or caring for sick family members.

Indigenous Services Canada also streamlined its processes for hiring nurses in remote or isolated First Nations communities and made its contract nurses and paramedics available to all indigenous communities to respond to additional health care needs due to COVID-19. While the department took steps to increase capacity, the number of requests for extra nurses and paramedics also increased. As a result, the department was unable to meet more than half of the 963 requests for extra nurses and paramedics that it received between March 2020 and March 2021.

Our audits of the government's pandemic response continue to show that when the people who make up the federal public service are faced with a crisis, they are able to rally and focus on serving the needs of Canadians.

However, these audits also show that issues forgotten or left unaddressed have a way of coming back, typically at the worst possible time.

Canada was not as well prepared to face the pandemic as it would have been if the stockpile of emergency equipment had been better managed and if a long-term solution had been put in place for health care workers, such as nurses, in indigenous communities.

If there is one overall lesson to learn from this pandemic, it is that government departments need to take action to resolve long-standing issues and to see the value in being better prepared for a rainy day.

Madam Chair, this concludes my opening remarks. We are pleased to answer questions.

Thank you.

[The Chair, Conservative, Kelly Block]

Thank you very much, Ms. Hogan.

Colleagues, before I turn to the questioning, I have received the speaking order we normally follow during our meetings. However, in the past we have taken an approach whereby we open it up to those who have questions and perhaps get the opportunity to have a three-minute round. I look to you for your guidance. As I said, I have the speaking order. We would have enough time for the first four rounds of questions, according to the speaking order.

Is it the will of the committee to follow a speaking order this morning? I'm seeing yes.

We will follow our speaking order then, starting with Mr. Berthold for six minutes.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Madam Chair.

Good morning and welcome, Ms. Hogan. My thanks to you and to the members of your staff for joining us again.

Ms. Hogan, I will focus on some of the things you said in your presentation. You said that the Public Health Agency of Canada was definitely aware of the issues, as they had previously been raised in audits and reviews over the past decade. The same is true for Indigenous Services Canada.

Don't you think you had a unique opportunity to demonstrate the importance of the reports of the various auditors general over the years, and the negative effects that are generated when agencies, departments and services do not follow those recommendations? It seems to me that you either did not make that point in the report you presented, or that you did so timidly.

[Karen Hogan]

I am certainly concerned about that. These days, it seems like every report that I submit is about issues that have been around for a long time and that the government has not addressed. In our reports related to the pandemic, I have tried to strike a balance to show that the public service was taking action and responding to the needs of Canadians.

That said, you are absolutely right. My message is very similar to the one I delivered when I tabled my report on pandemic preparedness in March. To me, it shows that the government must now recognize the need to invest in things that we don't see.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Exactly, we must invest in things that we don't see, but that we absolutely must have in hand.

What I would have liked to see in your report is the consequences for not following the recommendations. I'm sure you can tell me why this was not included. There were delays and the Public Health Agency of Canada was not sufficiently prepared, despite repeated warnings. But what was the real impact on Canadians? Unfortunately, this is not described very well in the report I have before me.

[Karen Hogan]

It is difficult to demonstrate the impact in some areas. We don't know whether the response would have been different if the government had been better prepared.

I can confirm that the requests for personal protective equipment made from February until mid-March, before the government looked at mass procurement, were difficult to meet. A fraction of those requests were met. It was very difficult to determine what was missing from the national emergency strategic stockpile, because they had never established a minimum quantity of pandemic supplies. So we focused on the continuing improvement of the response.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Were you able to determine the number of requests that were not met?

[Karen Hogan]

Perhaps I'll ask Mr. Goulet to add some detail. I know that we have determined the percentage of requests that were met. For example, at the beginning of the pandemic, in February, one province requested over 500,000 masks, and I believe they received between 4% and 10% of the masks requested. So we put a number on some of the shortfalls, but it was impossible to determine an overall percentage.

Mr. Goulet, do you want to add anything?

[Jean Goulet, Principal, Office of the Auditor General]

We have specific numbers on the requests that were made by the provinces and territories and on what the Public Health Agency of Canada provided at that time. I can provide you with those numbers.

Having said that, the percentage that Ms. Hogan provided is good. The Agency's response rate to requests is between 6% to 10%.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

I would really like you to provide us with this information. I think it's very important.

Ms. Hogan, you'll understand that our mandate at the Standing Committee on Public Accounts is to study your reports and recommendations. It is really starting to get my back up, to see that long-standing requests and recommendations are being given so little consideration.

As I mentioned at the outset, when it comes to exceptional situations, public servants are indeed exceptional in their ability to react. However, why is this capacity not as evident when there is no crisis? Always waiting until there is a crisis to react has created problematic situations.

So I would like to get this information on the government's response to requests as quickly as possible.

Ms. Hogan, I don't know if you intend to go any further, but I could have said the same thing about Indigenous Services Canada.

I think it's important to illustrate that your recommendations are helpful. The current situation clearly shows the need for departments to follow some, if not all, of your recommendations.

[Karen Hogan]

Thank you very much for your comments. Yes, we will provide you with that information.

We tried something different in these two audits: we did a real-time audit. We found shortcomings, and that certainly caused a slower response from the government. However, rather than waiting until the end of the crisis to comment on what happened, we wanted to try to influence the government's response to the ever-changing pandemic. We felt it was value-added for the country and for Canadians.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Berthold.

We will now move to Ms. Yip for six minutes.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Thank you, Madam Chair.

I would like to thank the public servants and the department for their excellent work and their agility in being able to handle some of the quick movements that were needed to fulfill some of the PPE issues. I think it's important to note that.

I'll go back to the real-time audits, and this is for Ms. Hogan. What was the advantage of doing these audits in real time?

[Karen Hogan]

There are advantages and disadvantages to doing real-time audits. One of the disadvantages is that individuals are very busy still trying to respond to the pandemic. Hence, we do need to make some difficult decisions about scoping and how far we dig on some issues. The biggest advantage in such an approach to auditing is being able to have a direct influence and impact on the ever-evolving response to the pandemic.

For example, we were able to make some recommendations to Public Services and Procurement Canada about adjusting some of their approaches and some of the risks they were taking in bulk procurement to hopefully influence and improve the response going forward. As we know, we're in wave three. There is speculation that more waves are to come. If we could help influence the response, we wanted to take advantage of that.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

It's important to be able to react faster and make improvements.

Other than the stockpiling issues, what are some of the long-standing issues that could have been taken care of to be better prepared for the next pandemic?

[Karen Hogan]

I'll try to answer that by talking about some of the long-standing issues in the two reports.

I'll start with the first audit. In it, we looked at the Public Health Agency of Canada's management of the national emergency strategic stockpile and its response to the pandemic going forward. There were a few things I would highlight.

One would be making an assessment of a standard or basic level of certain types of equipment to be maintained in the stockpile to deal with a health crisis in the future. Another is fixing the IT system that supports that stockpile. We saw many weaknesses in not being able to track expiry dates and issues in even identifying what was in the stockpile. It's really about taking the time to do all of that in between crises instead of doing it in reactive mode and really not fixing those long-standing issues and just finding a better response in the context of the current environment.

That would be that first report.

If I turn to the Indigenous Services Canada report, I would highlight the fact that there have been long-standing difficulties in trying to secure skilled health care workers in indigenous communities. A solution needs to be found there, because the pandemic just made a bad situation worse.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Why do you feel that some of the lessons from SARS and H1N1—the swine flu—maybe hadn't been learned and retained and used as a base in order to prepare for this pandemic?

[Karen Hogan]

I would point to two items I've noticed in this series of audits. When we looked at pandemic preparedness, I might have pointed to other matters, but here I would talk about the drive of short-term thinking, of dealing with the current things on the table versus that long-term view and, as I mentioned in my opening remarks, really planning for a rainy day. I think that's a natural tension between Parliament and government. We need to recognize that the federal public service has to always make sure that they keep their eye on the long-term thinking and do all that behind-the-scenes work.

The second thing I would point to here is that in reviewing internal documents and also in talking to officials, we found that the Public Health Agency cited budget constraints and limitations that limited their ability to deal with some of these issues and also to restock the stockpile when it had been used.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

On the topic of oversight of third party warehousing and logistics, it stated that one of the reasons third party service providers were sometimes unable to fulfill their contractual obligations was incomplete information from suppliers. How does your recommendation address this?

[Karen Hogan]

We did provide a recommendation there about how enforcing the terms of contracts is essential. The federal public service spends a lot of time making sure that there are good clauses in the contracts; enforcing them is essential.

Here, the third party warehouses didn't always have accurate information from the suppliers and hence couldn't document what was in the inventory and what was being received and shipped, but there were also limitations in the Public Health Agency's inventory management system that contributed to the ongoing inability to have a complete record over the pandemic.

It's about enforcing those rules, but it's also about making sure that you have an IT system that supports a really important program. In this case, it's the national emergency strategic stockpile.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

In your opening remarks, there was also a reference to Public Services and Procurement Canada making adjustments by accepting some risk to facilitate the quick purchase of large quantities of equipment in a highly competitive market where supply was not always keeping pace with demand.

What kinds of risks were deemed acceptable?

[The Chair, Conservative, Kelly Block]

Ms. Hogan, I would need this to be a very short answer, as we are already over time.

[Karen Hogan]

All right. I will do my best.

I would highlight just two things. One would be invoking the national security exception, which allows for non-competitive processes. The second would be accepting the risk of making advance payments in order to secure equipment to replenish the stockpile and deal with provinces' and territories' requests.

[The Chair, Conservative, Kelly Block]

Thank you very much, Ms. Yip.

We will now go to Ms. Vignola for six minutes.