Public Accounts Committee on Feb. 29th, 2024

[Karen Hogan]

To my recollection, we did not see that. We saw it being invoked in certain contracts, and we saw it being cited and used between the Canada Border Services Agency and Public Services and Procurement Canada. We definitely saw that the authority was there to use the exemption.

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

Okay. I'll look forward to hearing from Treasury Board on this next week.

I'll go back to Export Development Canada.

When I got cut off last time, I was asking around.... I deemed it to be a subcontractor with this one financial, but you said it was a subsidiary. Is it appropriate for Canadian companies to outsource their work to other parts of the world when they are receiving a government contract?

[Mairead Lavery]

I don't feel equipped to answer that on behalf of all Canadian companies with respect to government contracts.

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

Okay. Was there anything in the agreement that Export Development Canada had with Accenture that barred them from...? There is some report that this one financial in Brazil was doing the work that Accenture had won the contract for, and you informed me that this was not a subcontract. Is it appropriate for them to do that?

[Mairead Lavery]

If I may answer your question a little bit differently, this was with respect to the loan accounting system. There was a market scan done as to the providers that could accommodate the request and support such a system—support this number of loan-holders, should it be required, the 890,000 loan-holders. That scan identified 24 companies that went through a series of processes to identify which company could meet the requirements in the time frame that we needed them to meet. There was actually a full scan done. This company was identified as the one that met the requirements the most to actually meet the needs of delivering this loan accounting system.

[The Chair, Conservative, John Williamson]

Thank you. That is the time.

Mrs. Shanahan, you have the last four minutes, please.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you very much, Mr. Chair.

I, too, appreciate all the witnesses who have been here today answering our questions, which have been kind of all over the place, but that is the nature of looking at the public accounts.

I would like to learn more about the Development Finance Institute Canada. We have Lori Kerr and David Bhamjee. I was looking up a little bit about your organization. Your mandate is to support private sector companies in developing markets to promote sustainable development.

Perhaps, Ms. Kerr, you can tell us a little bit more about what you do, when you started and how it all came about.

[Lori Kerr, Chief Executive Officer, Development Finance Institute Canada Inc.]

Sure. I'm happy to share a little bit about FinDev Canada.

We're Canada's bilateral development finance institution. As you've said, we support financing and investment in emerging markets in developing economies. We work with the private sector. We're a wholly owned subsidiary of Export Development Canada, and our initial capitalization of $300 million came in 2018. There was also money in budget 2021, as well as under the Indo-Pacific strategy.

Essentially, what we do is support investment in financing in emerging markets. As a development finance institution, we also look through a development impact lens, so we make our capital allocation decisions looking at climate and nature action, local market development, gender equality and women's economic empowerment.

We work through a number of different sectors. We support the financial industry in emerging markets and developing economies, so we work with local and regional banks and investment funds. We work with agriculture and forestry in their value chains and then in sustainable infrastructure.

We ended the year last year with about a billion dollars on our balance sheet, so in a five-year growth period—we just celebrated our fifth anniversary—we grew essentially from zero to a billion dollars on our balance sheet.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

That sounds like quite the story. Maybe just walk me through a few of the elements again.

Is it private sector Canadian companies that approach FinDev with projects that they want to do, or do you help them discover projects in emerging markets?

[Lori Kerr]

As a point of clarification, we don't have what one might call a nexus mandate to support Canadian investment abroad in particular.

We're in the business of supporting private development in emerging markets and developing economies. Should there be Canadians who invest abroad, that's fine, but the export promotion piece is really what EDC does. We're about supporting development in emerging economies to support good-quality jobs, to support raised incomes, tax revenues, etc.

The way that transactions or deals come to us is through a number of different avenues. One is through our own networks, in terms of the sponsor companies or the financial institutions that are looking to invest. We work a lot with partner entities, other development finance institutions around the world, as well as with the private sector directly in emerging markets.

Opportunities come to us in a number of different ways.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

When you say the “private sector”, that would be for-profit, but would it also maybe include co-operatives or social finance entities?

[Lori Kerr]

Indeed. As a development finance institution we're an investor with impact, so again, we put that impact lens on everything we do. In the ecosystem of financing, we occupy a space that sort of sits between commercially oriented finance and more traditional aid. We look for companies and investment opportunities that will provide a return. That's required, but it's not sufficient. There has to be development impact associated with those investments.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

What do you mean by development impact? Is that actually contributing back to the community or funding schools? What does that mean?

[Lori Kerr]

Thank you for the question.

Indeed, it's those impact lenses that I mentioned around climate and nature action. We would take a look at how the particular company or financial institution that we're investing in is looking at climate change from a risk perspective as well as an opportunity perspective. How are they either mitigating or adapting to climate change?

When we look at local market development, we look at things like what types of jobs are being provided. Are there jobs that are created for women-owned small and medium-sized enterprises, for example? Are we contributing to the development of local capital markets? What's happening in the local economy that our investment, through those businesses, is contributing to?

Then again, on the women's economic empowerment side, as I've mentioned, we would look at the quality of jobs that are provided. We would look at how many women-owned, women-led SMEs are included or at how many women are in leadership positions in a company, in management, on the board—things like that.

[The Chair, Conservative, John Williamson]

Thank you. I'm—

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Did you say you have an impact? It might be interesting to have a performance audit—

[The Chair, Conservative, John Williamson]

Don't look at me.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

—on FinDev. We want to hear more.

[The Chair, Conservative, John Williamson]

I look forward to your motion on that matter. We're over our time.

I want to thank all the witnesses for coming today so that we can continue our study on the public accounts of 2023. We'll see some of you very soon.

To the others, I wish you a nice evening. Thank you very much.

I'm going to suspend for five minutes as we prepare for our next witness.

[The Chair, Conservative, John Williamson]

I call the meeting back to order.

Welcome back to the committee hearings.

Pursuant to Standing Order 108(3)(g), the committee resumes consideration of the 2024 report number 1 of the Auditor General of Canada, entitled “COVID-19 Pandemic - ArriveCAN”, referred to the committee on Monday, February 12, 2024.

I would like to welcome our witness from the Customs and Immigration Union, Mark Weber, who is the national president.

Mr. Weber, thank you for your patience. We're a little behind schedule, but I'm going to turn things over to you right away for a five-minute opening.

I see that most of the members are here.

Without further ado, you have the floor for up to five minutes, please.

[Mark Weber, National President, Customs and Immigration Union]

Thank you, Mr. Chair.

Thank you for the opportunity to appear before you today as the national president of the Customs and Immigration Union, which represents personnel working for the CBSA, including frontline border services officers.

For many of our members, or anyone familiar with CBSA management, the Auditor General’s report on the ArriveCAN procurement process did not come as a surprise. This is not because our members were involved in the development of the application or in the procurement process that led to the ongoing debacle. They were not, nor were they consulted about the usefulness of such an endeavour. Had they had a chance to do so, they would have surely informed the agency’s management of ArriveCAN’s futility. Rather, much of what the Auditor General’s office found resonated with our members because they are all too well acquainted with the agency’s labour relations practices.

In her opening statement to this committee, the Auditor General noted the “glaring disregard” for basic management practices uncovered during the audit. As our members know, this disregard for proper managerial procedure is deeply embedded within the agency.

Be it in terms of the profound lack of accountability found at all management levels, the tendency to retaliate against employees for speaking up, or the poorly run and arbitrary internal investigation and disciplinary process, CBSA management’s track record speaks for itself. While keen on punishing its lower level employees at the slightest allegation, the agency routinely turns a blind eye to far more serious breaches within management.

The situation within the security and professional standards directorate, which is responsible for internal investigations, is especially egregious, with the directorate showing little understanding of the basic principles of procedural fairness. Reform is badly needed to ensure the integrity of a process that should be fair, transparent and unbiased, yet is anything but.

It should come as no surprise, then, that the procurement process that led to ArriveCAN was fraught with issues, and it should come as no surprise that the resulting product has been found to be of poor value to Canadians. What must be stressed is how this poor value extends far beyond the mere economic aspect. ArriveCAN, in its current form, actively undermines the security of Canadians by removing crucial interactions between officer and traveller. It is the cornerstone of CBSA’s border modernization strategy, which focuses entirely on facilitation, with little thought for the safety and security of our communities.

The reality is that ArriveCAN was far from a necessity in the first place. It is both the result and the continuation of a steady erosion of our federal public service, which has seen our ability to react in times of crisis drastically reduced over the years. This decline was hastened by policies such as the Conservatives’ deficit reduction action plan back in 2014, when thousands of public service workers were removed, including about 1,100 border services officers.

At the border, this same decline has been further fuelled by the current administration’s focus on inefficient technology and the hiring of more and more managers at the expense of officers. With important security matters at the forefront of national discussions, such as stolen car exports, gun smuggling, the opioid crisis, etc., it is extremely galling to see the agency squander in the worst possible way nearly $60 million on an app that ultimately does very little.

It is irresponsible to inject such funds into a project of this kind, instead of hiring much-needed additional staff or seeking to improve existing infrastructure, which would bring real value to Canadians. This is to say little of the agency’s decision to spend dozens of millions of dollars on the private sector, instead of choosing to invest in its workers and reinforce their capacity to act on behalf of Canadians. At a time when our members are being nickel-and-dimed at the bargaining table, this is nothing less than a slap in the face.

CIU members are proud of the work they do to serve Canadians and of their role as Canada’s first line of defence, yet CBSA management’s actions continue to cast a shadow on the organization as a whole. The Auditor General’s report brings to light what many of our members have known for a long time.

I urge the federal government, along with the CBSA, to seize this opportunity to change course. Canadians are owed an agency built on solid principles, whereby the front line is properly supported to ensure the security of all.

Thank you. I look forward to your questions.

[The Chair, Conservative, John Williamson]

Thank you very much.

Mr. Genuis, I know that you're moving a motion. You're not subbed in, so you'll need to speak to your whip. I will turn the floor over to you for five minutes and you can sort that out, or you can turn the time over to someone who is subbed in.

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

Chair, I'll make a few introductory comments. The email is on its way from the whip's office.

Thank you, Mr. Weber, for sharing with us. Again, it's consistent with testimony that we've heard from many about what a broken process ArriveCAN has been from start to finish.

I will note in particular your observations that internal investigations are arbitrary and that there has been a problem of retaliation against those who make complaints. At the government operations committee, we had two public servants make some allegations in response to questions they were asked. Almost immediately after their testimony, they were told there was an investigation against them. They were subsequently suspended without pay following their testimony to a parliamentary committee.

It raises significant concerns about our ability to get to the bottom of matters related to arrive scam when there is an appearance of retaliation specifically against witnesses when they give testimony critical of the government and others within CBSA.

I'm sure we'll be able to come back to you shortly.

Earlier in this meeting, I tried to move a motion to summon Mr. David Yeo to this committee. In another outrageous revelation related to the arrive scam app, we found that a contractor's company, Dalian—another two-person company that made off like bandits during arrive scam—got $7.9 million. We still don't have any sense of what they actually did, if anything, for that money. They got $7.9 million while David Yeo, one of the two people working at the company, was also an employee at the Department of National Defence. The Department of National Defence had contracts with Dalian as well. The department and their relevant agencies report not knowing enough about who works for them to have been able to notice this problem earlier.

Recognizing the urgency of the matter and the need to get to the bottom of it, I do want to give my government colleagues one more opportunity to do the right thing. We tried to move this motion before. They blocked our ability to do so. They have fewer procedural tools available to them now, because it is the matter at hand, so I will move the following:

That the committee issue a summons for Mr. David Yeo to appear before committee within seven days and for at least two hours.

I hope we'll be able to have the quick support of the committee to get this done and be able to proceed with that summons.

[The Chair, Conservative, John Williamson]

We will send that out forthwith.

Are there any speakers to this motion?

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Can we suspend while we're waiting for the motion to be—