Public Accounts Committee on Feb. 21st, 2024

[The Chair, Conservative, John Williamson]

Thank you.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

To your mind, where was the breakdown?

I'll come back, Mr. Chair.

[The Chair, Conservative, John Williamson]

Thank you very much.

We're beginning our second round.

Mr. Brock, you have the floor for five minutes. Go ahead, please.

[Larry Brock, Conservative, Brantford—Brant, ON]

Thank you, Chair.

Good morning to the witnesses and thank you for your attendance.

To the PSPC representatives, your deputy minister Arianne Reza was appointed on November 2, 2023. Prior to that, she was the assistant deputy minister. Beginning in August 2021, she was the senior official responsible for federal procurement. She oversaw 1,400 employees in response to the COVID-19 pandemic. She led the urgent procurement of critical goods and services to ensure the health and safety of Canadians, including vaccines and surrounding protective equipment. She directed the development and implementation of the simplification of procurement practices. These efforts focused on building an accessible procurement system that drives value for money. Her DNA was all over the issues we are studying today and have studied literally for the last couple of months.

Why isn't she here?

[Michael Mills]

She had preplanned leave for this week and she's not available this week. She was originally scheduled to be here last week, but the meeting was changed, so she was unfortunately unable to attend.

[Larry Brock, Conservative, Brantford—Brant, ON]

Thank you.

Mr. Chair, I look forward to a further invitation to Ms. Reza to attend this particular committee to answer some relevant questions surrounding these concerns.

On the “bait and switch”, Mr. Mills, you identified an understanding of “bait and switch” as presented by my colleague Mrs. Block. I want to do a little more push-back, because prior to Mrs. Block's bringing to your attention the real entity behind GC Strategies and the business they are in, you repeatedly said, “Well, they've been in several government contracts providing IT services.” That is so inaccurate. One of the directors of GC Strategies, one of the principals behind it, Kristian Firth himself, made it abundantly clear on numerous occasions that they have no expertise in IT. They are simply external consultants who contract with the Government of Canada to find IT professionals, which is really an offensive move, particularly when you take a look at the size of the federal public service, which Justin Trudeau has increased by 40% since 2015.

Last week, at the ethics committee, we heard from Jennifer Carr, the president of the Professional Institute of the Public Service of Canada, which oversees our professional IT federal public servants. They are rightly angered, very angry at the Government of Canada for simply bypassing their skills and their expertise in-house.

You're certainly aware of that, are you not, Mr. Mills?

[Michael Mills]

I'm aware that there is a debate about the capability of IT workers in the government. Again, with respect to the use of external resources, we have had many dialogues with various departments that have indicated that there are lots of times when there are very specific skill sets that just aren't available within the public service.

[Larry Brock, Conservative, Brantford—Brant, ON]

GC Strategies has no skills. There's nothing preventing the Government of Canada, with this massive number of federal public servants, from actually doing Google searches on its own to find IT professionals. Why is it that a two-person company working out of their basement was allowed to collect $20 million over the course of three years for doing absolutely nothing? If we were talking to professionals from the private sector right now, people would be fired for this. There would be accountability for this gross breach of the public trust.

I'm going to ask this question, because I bet no one at PSPC has been suspended, with or without pay. Is that correct?

[Michael Mills]

I'll start with the first part, about the use of external consultants. They are also used in the private sector. I will acknowledge that GC Strategies, the two principals of the company, their business model is to make available IT professionals—

[Larry Brock, Conservative, Brantford—Brant, ON]

Thank you. I'm going to move on.

[The Chair, Conservative, John Williamson]

You have 15 seconds left.

[Larry Brock, Conservative, Brantford—Brant, ON]

Now, on the issue of bait and switch, we've identified criminality. We've identified fraud, forgery, obstruction of justice and breach of trust by government officials, all surrounding the use of GC Strategies and the contracting practices.

Have you reported anything to the RCMP at this point, and if you haven't, why not?

[Michael Mills]

Thank you for the question, Mr. Chair.

I'll turn to my assistant deputy minister of the oversight branch.

[Catherine Poulin, Assistant Deputy Minister, Departmental Oversight Branch, Department of Public Works and Government Services]

Thank you for the question, Mr. Chair.

We're taking very seriously all the reports that we are getting. We had access to the CBSA reports, the Auditor General's report—

[Larry Brock, Conservative, Brantford—Brant, ON]

Have you reported to the RCMP, yes or no?

[The Chair, Conservative, John Williamson]

Thank you. We'll have to come back to this.

[Larry Brock, Conservative, Brantford—Brant, ON]

Can she answer that question, Chair?

[The Chair, Conservative, John Williamson]

I'm afraid the time is well up, but there will be many more rounds of questions to come back to this.

Ms. Bradford, you have the floor for five minutes, please.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Thank you, Mr. Chair.

Thank you to the witnesses for joining us today.

I want to continue on Ms. Yip's line of questioning for the Auditor General, because she didn't quite finish. She was discussing the problem with the department not taking the advice of PSPC to have an open competition.

You stated that the reason for that is that the department is ultimately responsible for the contracts with them, but do you have anything to add on how the best oversight could be taking place? You didn't address it in your report. How can we fix this problem so that it doesn't happen again? If procurement is saying, “You really should be doing an open competition”, and the department says, “No, we're not going to”, do you have any ideas as to how you could get around that blockage?

[Karen Hogan]

I think ideas like that are already outlined in the procurement policy and in the supply manual that Public Services and Procurement Canada has out there.

I would tell you that every department or agency should have its own procurement group or directorate that has a challenge function and has some oversight over procurements. Also, at certain contracting levels, Public Services and Procurement Canada plays that role, but those supply manuals and policies talk about how, depending on the size or the magnitude, you could put committees together, etc. There are a whole bunch of mechanisms already outlined.

That's why many of our recommendations are to follow the existing policies. There's no need to create more. Oversight exists. It's a matter of actually putting it in place when it's appropriate.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Okay. Thank you.

That leads to my next line of questioning, which will be for PSPC.

In the AG's report, she concludes that the CBSA, PHAC and PSPC “did not manage all aspects of the ArriveCAN application with due regard to value for money.”

You've mentioned some of the steps you have taken since November to address the issues, but I would like you to elaborate as to how this is going to address costs. Let's start with the fact that you've taken away the delegated authority for task authorizations from all departments and agencies while new rules, agreements and training are put into place. Can you elaborate on that, please, and specifically on what it will mean when the new agreements are in place?

[Michael Mills]

There are a couple of pieces that I think are critical. The first one is that ultimately we're trying to simplify procurement to ensure that we have greater competition, which will put downward pressure on prices overall. With respect to these measures, we are looking at having greater transparency in the pricing.

One issue that's been discussed at length is the use of subcontractors to subcontractors, and part of this measure is to try to have clarity on where teams are actually using subcontractors to subcontractors and ensuring that we understand ultimately what's the value that's flowing through to the IT professionals who are doing work versus profits and overhead, and also tightening up our ability to use price verification to ensure that we have reasonable rates, even on the profits and overhead, in competitive processes.

I think having greater competition will ultimately drive down prices, and greater visibility will prevent the use of multiple layers of subcontracting.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Okay. What would happen right now if CBSA were to come to PSPC and say, “We want to use this particular company for general IT services and we will issue task authorizations for specific projects later”?

[Michael Mills]

Under the changes that we've made now, we would have to have a much stronger justification, under the criteria in the Treasury Board framework, for using a non-competitive contract. That would need to be done first. I think there will be a lot more due diligence in terms of the justification and the articulation of the reason why there is a need to use a non-competitive contract.

With respect to the issuance of task authorizations, we will need to have a much clearer understanding of what the overall project objectives are and what the activities are. The task authorizations will have to be very specific to what those activities are.

The other thing we're looking at is time-limiting the contract. A big part of what we found in the weaknesses here is that where there were task authorizations, the descriptions were general, which allowed too much flexibility. This is actually trying to have clear articulation of those task authorizations, which will take away that flexibility, so you know at the outset what resources are going to work on what types of activities. We can then assess whether those activities were delivered and we can ultimately assess the price that was paid to deliver those activities.

[The Chair, Conservative, John Williamson]

Thank you.

I'm afraid that is the time, on the spot.

Ms. Sinclair-Desgagné, you have the floor for two and a half minutes.