Public Accounts Committee on Feb. 27th, 2024

[The Chair, Conservative, John Williamson]

The time is up.

Thank you very much.

Now we have MP Gazan, who is joining us virtually. Nice to see you today.

You have the floor for up to six minutes, please.

[Leah Gazan, NDP, Winnipeg Centre, MB]

Thank you so much. It's nice to visit this committee today and substitute for my good colleague Blake Desjarlais.

This is for the Office of the Procurement Ombudsman.

Concerning is right. Your department's report on emergency procurement highlighted the common challenges to procurement and services in an emergency such as COVID-19, as we are currently witnessing.

By the way, before I go on, I want to highlight the good work of my NDP colleague Gord Johns, who brought forward the motion to commission the report. As we know, it has shed tremendous light on many of the issues being discussed today and certainly all over the news. We know this was an extremely important step for what we're doing today, which is to get more clarity around what happened with ArriveCAN.

Circling back, the Auditor General, when bringing forth this report, commented, “An emergency does not mean that all the rules go out the window, and that departments and agencies are no longer required to document their decisions and keep complete and accurate records.” This is really troubling and very concerning.

In your department's report, you identified certain steps in a national emergency that the government has to take. There's a need for flexibility, centralizing, and ultimately relying on non-competitive contracting to save time and resources. However, the Auditor General is absolutely on point here. An emergency does not mean a disregard for rules and accountability. This is troubling.

Was the non-competitive process justified in this situation, when it was done so poorly and resulted in a heightened lack of transparency and a waste of resources?

[Alexander Jeglic]

The invocation of the emergency exception under the government contracting regulations was in fact justified. The way the supplier was ultimately selected is a question that I believe this committee has asked about and certainly the OGGO committee has asked about. Again, in that circumstance it's a little less clear why that specific supplier was selected to perform these directed or sole-sourced contracts under the exception. However, the application of the exception itself is correct.

I will thank you for drawing attention to the emergency procurement report. We wrote it during the pandemic to help procurement officials navigate some of the complexities associated with emergency procurement, which we knew to be a very difficult time for the procurement community. I don't want that to be glossed over either. Many of these procurement officials were working day and night to deliver important goods and services for Canadians.

I want to acknowledge that this work was incredibly important, but with the ArriveCAN issue specifically, we did note there were irregularities associated with documentation practices in the selection of the vendor that was ultimately delivering.

[Leah Gazan, NDP, Winnipeg Centre, MB]

I hope it doesn't appear that I am putting down the hard work of our civil servants, but in this particular case, we know there were weak financial records at a time when we were running deficits. This is a total, colossal waste of taxpayer dollars. We also know that because of this, external resources were used. This increased the cost, and it did not, in turn, affect efficiency.

Do you think this could have been avoided if, instead of contracting out to different agencies that seemed to be problematic, more support to the public service was given?

[Alexander Jeglic]

Really, that was the determination made by the CBSA, so I can't comment on their internal capacity to deliver these specific services. Obviously, they made the determination that they could not. I'm in no position to question whether, in fact, they could have delivered internally, as opposed to hiring external resources.

[Leah Gazan, NDP, Winnipeg Centre, MB]

Would you say that as a going-forward practice, one of the strategies could be to ensure there are enough human resources internally so we don't end up having these issues in the future?

[Alexander Jeglic]

Separately from this committee, I think it has been well understood that there is a gap in the IT expertise available, not just in the public sector, but in the private sector as well, which I think has been spoken about on a number of occasions. That being said, I'm not in a position to comment as to whether the right approach is to retain more internal resources.

[Leah Gazan, NDP, Winnipeg Centre, MB]

Would you say, as I indicated, that it was done so poorly it resulted in a heightened lack of transparency and a waste of resources? Do you have any sense of how much of the resources were wasted and how much we could have saved if it had been done properly?

[Alexander Jeglic]

That question is probably better positioned for the Office of the Auditor General because that's closer to the scope of the OAG review. That being said, of course this could have been done better in many regards, particularly with documentation.

You mentioned transparency a number of times in your question. I think that's fundamentally what's causing so much of the concern. There was very little transparency associated with many of these procurement processes, and it's causing people to ask questions that will now go unanswered because there's no documentation demonstrating why decisions were taken.

[The Chair, Conservative, John Williamson]

Thank you very much. That is time.

We're beginning our second round.

Mr. Genuis, you have the floor for five minutes, please.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Today, the RCMP commissioner confirmed that the police are investigating the arrive scam scandal. We're increasingly seeing that the NDP-Liberal government's arrive scam scandal was costly, corrupt and criminal.

I want to start with questions for the Auditor General.

[Some hon. member]

Oh, oh!

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

I'm perplexed by the fact that Liberals are laughing in response to this line of questions. There's nothing funny about this. Some $60 million of taxpayers' money was wasted, with corruption, bid-rigging and RCMP investigations. I think people who are struggling under the burden of taxes, which are paid for this kind of waste and corruption, don't find it funny either.

Deputy Auditor General, have you communicated with the RCMP? Have they asked for documentation? What kind of information have you been able to provide them?

[Andrew Hayes]

Before our report was submitted to Parliament on February 12, we spoke with the RCMP to make them aware that our report was coming. We did signal to the RCMP at that time that if they were interested in receiving information from us, we would be happy to share it in response to a production order. We wrote to the RCMP afterwards confirming the same.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

I have a similar question for the procurement ombudsman.

Have you communicated with the RCMP? Have you been providing information in relation to your work and your findings?

[Alexander Jeglic]

We have not had any communication with the RCMP. At the time that it became public information that the RCMP may consider investigating, we considered what the appropriate steps would be. We felt the best thing we could do was put our report on the public record as quickly as possible so the information could be made known to the RCMP. We also made comments to that effect before the OGGO committee.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Sticking with the procurement ombudsman, were you surprised by the RCMP announcement today, based on the work you've done?

[Alexander Jeglic]

I want to answer this as factually as possible. It's in addition to everything else that we've learned, so based on the information contained in our report and the documentation we saw, I would answer yes, I'm surprised. However, based on all the other additional information, including information that was provided by the OAG, I'm not surprised.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

In light of everything you know at this point, you're not surprised by the investigation.

[Alexander Jeglic]

I'm reluctant to say.... It's difficult for me to have a view on anything we didn't review because I didn't do the review. That's why I made the comment in the way I did. Certainly, we rely heavily on the work of the OAG, and when there are factual findings that there were communications between the supplier and the department that led to the supplier ultimately providing restrictive criteria, that is highly troubling.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

It's highly troubling in the sense that it wouldn't surprise you the RCMP would be investigating that.

[Alexander Jeglic]

That's correct.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

To go back to the Auditor General's team, were you surprised by the confirmation from the RCMP today or not surprised, based on what you know so far?

[Andrew Hayes]

Based on the fact that the RCMP had already signalled they were examining the allegations raised by Botler, which involve many of the similar individuals involved in ArriveCAN, it's not surprising to me that they would take a broader look at the matters before them.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Both of your reports deal with a rigging of the process—in different ways, actually—but I think we see, at various points, a rigging of the process in GC Strategies' favour. Would the rigging that your reports identify constitute criminal activity?