Public Accounts Committee on Feb. 21st, 2024

[The Chair, Conservative, John Williamson]

Good morning, everyone.

This meeting is called to order.

Welcome to meeting number 102 of the House of Commons Standing Committee on Public Accounts.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely using the Zoom application.

I would remind you that all comments should be addressed through the chair.

Pursuant to Standing Order 108(3), the committee is resuming its consideration of the Auditor General of Canada's 2024 Report 1, entitled “COVID-19 Pandemic — ArriveCAN”, which was sent to the committee on February 12, 2024.

I'd like to welcome our witnesses.

From the Office of the Auditor General, we have Karen Hogan, Auditor General of Canada; Andrew Hayes, deputy auditor general; Sami Hannoush, principal; and Lucie Després, director.

I should know you all by heart. You've been in for the last couple of meetings. I appreciate your availability, both last week and this week.

From the Department of Public Works and Government Services, we have Michael Mills, associate deputy minister; Dominic Laporte, assistant deputy minister, procurement branch; Catherine Poulin, assistant deputy minister, departmental oversight branch; and Wojo Zielonka, assistant deputy minister and chief financial officer, finance branch.

Both groups will have five minutes. Ms. Hogan will lead us off for five minutes. After that, Mr. Mills will have five minutes.

Without further ado, Ms. Hogan, it's over to you for five minutes, please.

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

Mr. Chair, thank you again for inviting us to discuss our report on ArriveCAN, which we released last week, on February 12, 2024. I would like to acknowledge that this meeting is taking place on the traditional unceded territory of the Algonquin Anishinabe people.

This audit examined whether the Canada Border Services Agency, the Public Health Agency of Canada, and Public Services and Procurement Canada managed all aspects of the ArriveCAN application in a way that delivered value for money. I will focus my remarks today on the role played by Public Services and Procurement Canada.

The department was responsible for issuing and administering contracts on behalf of the Canada Border Services Agency and the Public Health Agency of Canada when a contract's value exceeded the agencies' delegated authority to procure. We found that Public Services and Procurement Canada challenged the Canada Border Service Agency's use of non-competitive processes to award ArriveCAN work. It recommended alternatives, such as shortening the duration of non-competitive contracts or running competitive processes with a shortened bidding period. Despite this advice, the agency moved forward with non-competitive approaches.

Last week, I also reported that the Canada Border Services Agency’s overall management of the contracts was very poor. Essential information was missing from awarded contracts and other documents, such as clear deliverables and the qualifications of required workers. We found that contrary to Public Services and Procurement Canada’s supply manual, the department co-signed several task authorizations drafted by the Canada Border Services Agency that did not detail task descriptions and deliverables. Without this information, it is difficult to assess whether the work was delivered as required and completed on time while providing value for money.

Public Services and Procurement Canada also co-signed many of the agency’s amendments to task authorizations. Some amendments increased the estimated level of effort or extended the time period without adding new tasks or deliverables. This drove up the contract’s value without producing additional benefits.

To deliver value for dollars spent and support accountability for the use of public funds, the Canada Border Services Agency and Public Services and Procurement Canada should ensure that tasks and deliverables are clearly defined in contracts and related task authorizations.

Mr. Chair, this concludes my opening statement. We would be pleased to answer any questions the committee may have.

Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much, Auditor General.

Mr. Mills, you have the floor for up to five minutes, please.

[Michael Mills, Associate Deputy Minister, Department of Public Works and Government Services]

Thank you, Mr. Chair.

I will begin by acknowledging that I am appearing here today on the traditional unceded territory of the Algonquin Anishinabe people.

We welcome the tabling of the Auditor General's report on the development of the ArriveCAN app, and we look forward to our discussion today.

I’m joined today by my colleagues Wojo Zielonka, chief financial officer; Dominic Laporte, assistant deputy minister of procurement; and Catherine Poulin, assistant deputy minister of departmental oversight.

Speaking as one of the key senior officials responsible for procurement, I want to acknowledge the complexity of the federal procurement system and recognize the immediate need to make improvements, particularly when we require professional services. The Auditor General’s report makes one recommendation that implicates PSPC—namely, that PSPC and CBSA should ensure that tasks and deliverables are clearly defined in contracts and related task authorizations. This is particularly key for PSPC, as it speaks to the division of responsibilities between PSPC and client departments.

Public Services and Procurement Canada, or PSPC, is the government's central purchasing agent, ensuring departments and agencies have the goods and services necessary to deliver on their various mandates.

In this role, PSPC establishes and administers central procurement tools, such as standing offers and supply arrangements, which client departments and agencies can then access directly.

We know there are concerns as to how the procurement instruments associated with ArriveCAN were used.

I can tell this committee that we have already introduced several new control measures that start to address the observations of the Auditor General’s report and also build on the procurement ombud’s report.

In November 2023, PSPC wrote to all departments, including CBSA, suspending all delegated authorities to authorize professional services-based task authorizations. In early December 2023, PSPC provided direction to its procurement officers to ensure that task authorizations include a focus on clear tasks and deliverables. Federal departments must now formally agree to a set of terms and conditions to access select professional services methods of supply.

Key changes also include the use of new contract provisions to increase costing and subcontractor transparency and provide important clarifications on the role of departments when using these instruments. The intent is to improve consistency in practices. PSPC is also updating its guidance to aid departments in procuring effectively and responsibly when using procurement instruments under their own authorities.

The Auditor General's report, along with the Procurement Ombud's review, underscores the need to strengthen specific areas of our procurement processes related to professional services.

We will continue building upon the actions we've taken so far and focus on a path forward to improve training, the procurement process and practices in order to optimize outcomes for Canadians.

Thank you.

[The Chair, Conservative, John Williamson]

Thank you, as well.

I will now begin our first round of questions.

Mrs. Block, you have the floor for six minutes, please.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Mr. Chair.

Welcome to all of you who are joining us today. I am of course subbing in as the shadow minister for public services and procurement.

I want to go directly to the Auditor General's report, where she acknowledged that CBSA was engaging PSPC on the development of ArriveCAN. Is this correct?

[Michael Mills]

Mr. Chair, PSPC was engaged to put in place contracts for IT services.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

How often were you engaged with CBSA on this project in particular?

[Michael Mills]

In terms of our understanding, the department was involved in both putting in place new contracts and issuing task authorizations against 31 contracts.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

How often would you have communicated with CBSA on this project?

[Michael Mills]

Do you mean at my level or as a department?

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

As a department.

[Michael Mills]

I think in early 2020 our procurement officers would have had fairly frequent interaction with their CBSA counterparts to put in place the initial set of contracts.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

When did you first learn about GC Strategies getting contracts on ArriveCAN?

[Michael Mills]

Myself personally, I would say it was probably later in 2020, when I would have seen a kind of consolidated report around contracts for COVID efforts.

[The Chair, Conservative, John Williamson]

Mrs. Block, I just want to interrupt for a second.

I'll remind all the witnesses that you're here speaking on behalf of the department. This is an issue I've noticed, that people are kind of personalizing answers when we're looking for departmental answers. Perhaps you could bear that in mind. I wanted to flag that at the outset. I think it's important that we get the most fulsome answers possible about contact and communications, so perhaps you could respond in that way.

[Michael Mills]

I apologize, Mr. Chair.

Certainly, the procurement officials would have known immediately that there was a contract being put in place with GC Strategies, which would have been in the spring of 2020.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

Thank you for that, Chair. I will frame my questions as such as well.

Did PSPC raise any concerns about GC Strategies prior to the contracting costs becoming public?

[Michael Mills]

To my knowledge, the questions were asked in terms of what the rationale was for choosing GC Strategies and why CBSA would be looking to have a sole-source contract. It was more about that. It was not so much a criticism of the firm but more in trying to understand why the use of a non-competitive contract was required.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

I'm hearing that there weren't any concerns about a two-person company being awarded a contract of this magnitude.

[Michael Mills]

Mr. Chair, as I understand it, there were no concerns raised around GC Strategies, as they had previously provided IT services and were already in existing supply arrangements with the Government of Canada.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Is it common for the government to contract two-person companies working out of a basement, receiving millions of dollars in government contracts?

[Michael Mills]

When we establish supply arrangements and standing offers, there's a requirement for companies to demonstrate that they have provided services—in particular, a certain number of contracts and a certain volume of IT services—in the past. GC Strategies and other companies, to get on those instruments, would have to demonstrate that they had met those capabilities in the past.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

I just want to push back a little bit on that answer. It is my understanding that GC Strategies has no expertise in IT. They do not provide those services. What they do is act as a middleperson to find those resources. I'll just leave that there.

Was PSPC satisfied, and do you continue to be satisfied, with the selection of GC Strategies for this project?

[Michael Mills]

Mr. Chair, I'd like to look at it from the perspective that they were engaged to do work. Work was completed. An application was built. I really wouldn't be able to speak to the quality in their delivering on tasks and on these specific pieces, but we are aware that they did actually engage IT professionals. Those IT professionals were able to build an app, do new releases and make sure that the app was available on multiple platforms.