Public Accounts Committee on Feb. 27th, 2024

[Leah Gazan, NDP, Winnipeg Centre, MB]

With the understanding that it has to be 51% indigenous-owned—

[The Chair, Conservative, John Williamson]

Be very brief, Ms. Gazan.

[Leah Gazan, NDP, Winnipeg Centre, MB]

—this is another example of a clear failure in accountability. What can be done going forward to ensure that money that is to go towards indigenous business actually lands in the hands of indigenous people?

[The Chair, Conservative, John Williamson]

I'm going to ask for a written response, please. We're over our time, unless it's very brief.

[Alexander Jeglic]

The answer lies in the audits performed by ISC. These are self-certifications made by the suppliers. Indigenous Services Canada can audit the certification processes. I would encourage it to do so. It's also something we're looking at in our long-term review plan.

[The Chair, Conservative, John Williamson]

Thank you very much.

I turn now to Mr. Viersen, joining us online.

You have the floor for five minutes, please.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Thank you, Mr. Chair, and I want to thank the witnesses for being here today.

I want to go back to Mr. Jeglic about GC Strategies helping to set the criteria for the contract it later received.

Can you explain that just a bit more?

[Alexander Jeglic]

I don't want to deflect the question, but that was, ultimately, a finding that came from the OAG's report. That wasn't something we saw directly. I'd certainly be prepared to offer my views, but I'd prefer that the starting point be the Office of the Auditor General, if that's okay.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Well, we have them here.

Go ahead, Mr. Hayes.

[Andrew Hayes]

Yes, thank you.

This was a concerning finding for us in this report. As the procurement ombudsman said earlier at this meeting, it is not uncommon for suppliers to be engaged with people in departments and agencies. What has to be protected, though, is the integrity of procurement processes, in particular making sure an advantage isn't achieved by a contractor working with people who are establishing future procurement processes.

In this case, the contractor was involved and had knowledge of particular requirements that ultimately made it into the request for proposals in the competitive contract. That, in our view, should not happen.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

They were basically getting a proposal that would only fit the company. Is that essentially what you're saying?

[Andrew Hayes]

There is a risk that this is exactly what happened. What we say in our report is that the requirements for that contract were very restrictive, and I think the procurement ombudsman found the very same thing.

In our view, whether or not it was directly for them, it does have the impact of chilling competition and discouraging other bidders. The procurement ombudsman spoke about the fact that it was perplexing that 10 bidders had expressed interest but did not ultimately submit a bid.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

It seemed like the government, or the bureaucracy, recommended KPMG to fulfill part of the contract that it had signed with GC Strategies. Can you shed a bit more light on that? Is this part of the same contract they had been part of setting the criteria for, and the bureaucracy was then providing them with somebody who could actually fulfill that contract?

[Andrew Hayes]

In the case you're discussing, I addressed this a bit earlier, but if my answer was unclear, I'll say there was a contract in place with GC Strategies, and officials from the Canada Border Services Agency identified that KPMG could provide some work that would be helpful. Instead of having a contract directly with KPMG, KPMG became a subcontractor for GC Strategies.

Ultimately, we're concerned with the way that happened. The agency was finding the resources for the contractor, and ultimately the government paid too much because GC Strategies ended up getting a finder's fee for that work.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

GC Strategies got a finder's fee for a company the bureaucracy provided. They were paid a finder's fee for a company they never found. Is that correct?

[Andrew Hayes]

Essentially, that's the concern we have.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Folks back home talk to me all the time and ask what's going to happen. There seems to be a clear case of negligence in the least. Are there any ramifications for the people involved in making these decisions? The RCMP can lay criminal charges. We've had people come here and say, “Well, I wasn't in the job before.”

What is a possible remedy regarding some of the people who were in these jobs and made some of these decisions?

[Andrew Hayes]

There are a number of angles to that. There are a few processes under way, whether it's the internal investigation at CBSA or the RCMP looking into allegations. We've had members of the senior public service speak about the fact that onuses can be retracted if they are justified. I believe that officials from Public Services and Procurement Canada talked about the possible recovery of amounts. Whether that can be achieved on the information that's available is an open question. Those are some of the recourses that may be available.

[The Chair, Conservative, John Williamson]

Thank you very much.

That is your time, Mr. Viersen. I understand you'll be joining us on this committee. We welcome you.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Thank you.

[The Chair, Conservative, John Williamson]

Also, congratulations on the recent addition to your family.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Thank you, Chair.

[The Chair, Conservative, John Williamson]

We're turning now to Ms. Khalid.

You have the floor for five minutes, please.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Thank you very much, Chair.

I'll start with Mr. Hayes and Mr. Jeglic.

In her report, the Auditor General concluded that CBSA, PHAC and PSPC “did not manage all aspects of the ArriveCAN application with due regard to value for money.” There have been some steps taken since November to address the issues with that value for money piece, but I'm hoping we can dig into that a bit more.

I know that delegated authorities have been taken away from departments and agencies and that new rules, agreements and training are being put into place. Are you able to talk about how that will address this specific concern of value for money?

We'll start with Mr. Hayes and then go to Mr. Jeglic.

[Andrew Hayes]

I would start by saying that some of the concerns we had about not getting best value for money may not be addressed by some of these changes. In particular, the heavy reliance on external resources without having an analysis of how to reduce that reliance is an important finding from our report.

I would also say that consistently requiring resources at the highest levels under a task authorization raises questions about value for money.

Finally, the practice of extending contracts or adding time without changing the level of effort won't, to us, be addressed by some of the changes being proposed.