Public Accounts Committee on March 6th, 2024

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

Thank you very much.

Your website states, “The Secretariat ensures tax dollars are spent wisely and effectively for Canadians.” You “oversee and provide guidance to the Treasury Board of Ministers”—as you've just noted—“on how government is managed and how it regulates.”

Since your department is responsible for the oversight of spending taxpayers' dollars and ensuring that they are spent wisely, and given that the issue of ArriveCAN has been in the news for the last 18 months, who in your department is being held accountable for the failures of the ArriveCAN app?

[Roch Huppé]

First of all, we take the findings extremely seriously. As the Treasury Board, we are looking...all of us there.

There are notions that came out that deal with financial records not being in place and with financial practices. There's also a notion of conflict of interest. There's also a notion of augmentation from an IT perspective. It plays on many of the different roles that we oversee at the Treasury Board.

Right now, as I said, we are taking this very seriously and putting an action plan together to ensure that our role will be played in this particular situation. However, I am going above and beyond that. I'm looking, personally, beyond ArriveCAN. My worry is that the system of controls needs to be there everywhere. As I said, we have a solid financial community. I would say that we have a solid procurement community. Sadly, we see stuff like that happening.

For example, about a week and a half ago, I instructed the chief audit executives of every department to really make sure that they had a review of their procurement practices in the coming year as an audit within their department. There are things that we're doing to make sure our accountability is discharged.

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

Really quickly, do you think your department did its job during the pandemic to ensure value for money for Canadians?

[Roch Huppé]

Honestly, from what I've seen—and I'll speak for myself—I'd like to think that, yes, it did. Again, there was no playbook with the pandemic. It was the first time.

I think that, generally, there were a lot of people who wanted to ensure that the right decisions were being made. Again, I'm not going to waste time and explain it again. We did take the time to make sure that the departments understood what it meant to operate outside of the normal control framework of the government, if that was the case, with the need for documentation and audits to be done.

I think we did provide direction. Could we be better? Perhaps we could, but we took our role very seriously during the pandemic.

[The Chair, Conservative, John Williamson]

Thank you very much.

Next we have Mrs. Shanahan, who is joining us virtually.

You have the floor for five minutes, please.

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

Thank you very much, Mr. Chair.

I, too, want to thank the Auditor General and the team from the Treasury Board for being here today.

I think, by the tenor of the questions that we're hearing, all members of this committee have concerns regarding oversight and why it did not work in this case. Something that came up in the testimony yesterday from Mr. Richard was that people were reluctant and, in fact, refused.... Professionals, financially accredited employees of the public service, were afraid to do what essentially is their job: to raise red flags where warranted.

Mr. Huppé, if someone has something to say about any financial practice, what are the ways in which that employee can say it safely within our public service?

[Roch Huppé]

First of all, I'm extremely concerned by Mr. Richard's comments yesterday. I'm not disputing them, to be fair.

I've operated for over 30 years in the financial community of the Government of Canada. I can assure you that when I had something to say, regardless of my level as a junior officer, I said it.

Mr. Richard yesterday said it, I think, very correctly, in the sense that you should be talking to your supervisor. If you feel that your supervisor is not reacting, then there are ways that you can go above your supervisor to the next level up if there's something that you feel very strongly about.

As I said, my experience, at least in the organizations I ran, was that the door was always open. I think it was made very clear that people could actually speak up.

I'm going to have a chat—I guarantee you that—with Mr. Richard, because if there are some people we have an issue with, we need to figure out what we're going to do with them. We also need to make sure that the community and the people operating in these communities understand.... He was talking about the financial management community, but I'm extrapolating that to the procurement communities and so on.

People who are experts in their field have to have the space to raise their hand if they have something to say.

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

Thank you for that, because as you mentioned earlier, it's not just about ArriveCAN. If this is symptomatic of a wider problem, we need to identify it and remedy it.

This is on a separate note, and I see we have someone, Mr. Franco, who is the executive director for procurement in the TBS. When the procurement ombud testified before us, he said he found it curious—and I certainly want to explore that—that in the competitive bidding process, when the bid was rigged so that GC Strategies could win it, there were eight or 10 other companies that could have lodged a complaint about that bidding process.

Can I hear your comments on that? They did not lodge a complaint. You would think they would have had a financial interest in doing so.

[Roch Huppé]

First, regarding why the other companies may not have lodged a complaint, I can't speak on their behalf. What I can tell you is what a normal process would look like.

First of all, it does happen that a vendor may be involved in or engaged to help in the preparation of a statement of work. An example is hiring an expert. You're about to buy something, so you want expert advice to help you develop that requirement.

What normally happens is that the company or the individual who is engaged to do that preparatory work is explicitly excluded from the resulting procurement. Typically, what you would see is that in the resulting procurement, the individuals from those companies are named, identified as having been involved in the production of that procurement and indicated as not being able to participate in the result because it is a clear conflict of interest.

In addition, in our procurement framework, we having something called the code of conduct for procurement, which forms part of every government contract and every government procurement. It requires that when a vendor bids or engages in contract work, they warrant that they are not in a conflict of interest, perceived, apparent or real. There are mechanisms in place that are there to ensure that conflict doesn't exist, and it appears in this case, as reported by the Auditor General, that those measures may not have been followed.

[The Chair, Conservative, John Williamson]

Thank you very much. That is the time.

Ms. Sinclair‑Desgagné, you have two and a half minutes.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Mr. Huppé, I'll go back to my list of questions.

You just said something interesting, which was that you mandated the internal auditors of each department to review the procurement processes and ensure that they were followed. Just before that, you said and confirmed that people responsible for financial controls, possibly within the departments' internal audit services, had sounded the alarm, but had not been listened to, because the decision had been made at the management level.

I get the impression that asking internal auditors to review the procurement process is like putting a patch on a flat tire and asking the vehicle to keep moving. That seems like a good solution, but fundamentally, if management makes decisions that go against the recommendations and advice, isn't the system broken? There are controls that are just not being followed.

[Roch Huppé]

My request isn't just for the people responsible at the Canada Border Services Agency. I think the agency has been audited more than normal, and it now needs to be given a chance to put a plan in place. As I explained earlier, the controls come with the deputy minister's accountability and all the rest. There are different instruments and processes within a department to ensure that those requirements are met.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

There's no question that the agency is involved, but the ombud's report and the Auditor General's report indicate that Shared Services Canada and the Public Health Agency didn't follow the advice and recommendations either. Isn't it a bit short‑sighted to lay all the blame at the feet of two people at the Canada Border Services Agency?

[Roch Huppé]

That's why my directive requires these agencies to review their governance structure and process to ensure that such a situation doesn't happen again.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Yes, but it was just said that the processes, even if they exist, aren't being followed. It was said at the outset.

[Roch Huppé]

No, I didn't say that.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

I say this because that's what you said at the outset. You said that you had issued advice and recommendations that hadn't been followed because it wasn't your responsibility to make sure, but rather that of each department. There's a real contradiction here.

[Roch Huppé]

No. I never said that the processes within each department weren't being followed. I want to make it clear that, generally speaking, the accounting and financial processes and controls of each department work. That said, when a situation of this magnitude occurs and the lessons learned apply to us as well, we have a duty, regardless of the organization in question, to put the necessary measures in place. If I worked for a department where there were no directives like the one I just issued, I would still have followed the process to avoid this kind of situation.

Obviously, as I said, sometimes the controls aren't applied. The important thing is to have processes such as internal audits to ensure that these situations occur as little as possible and to remedy the deficiencies raised.

[The Chair, Conservative, John Williamson]

We thank you again.

Ms. McPherson, you have the floor again for two and half minutes, please.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you very much, Mr. Chair.

Ms. Hogan, I'm going to ask you some questions. Of course, I just want to make sure that we have the right information for this committee. I would like to give you an opportunity to respond to some of the claims that were made at OGGO on February 22, to perhaps provide some clarification for your report.

When Cameron MacDonald and Antonio Utano appeared at that committee, they made a number of claims, disputing the sourcing of your report, that I want to ensure we get correct here.

First of all, Mr. MacDonald disputed your statement that there was “glaring disregard” for management principles. He said:

I have always adhered to the core principles, processes and procedures, including closely tracking and managing the costs of ArriveCAN. In fact, I delivered a detailed costing of $6.3 million to my colleague DGs and my supervisor, Minh Doan, just prior to my departure.

Ms. Hogan, do you still believe, despite Mr. MacDonald's assurances, that management principles were not adhered to?

[Karen Hogan]

It's my understanding that Mr. MacDonald was there for the first year and Mr. Utano was there much longer. Our audit period covered from January 2019 all the way till January 2023, which is much longer than his tenure at the Canada Border Services Agency, and we did see that some contracts and some invoices were very well documented and very well supported, but overall, there were too many that had just nothing to support who did what work, what did they work on, what contract was it under.... There was no governance structure. Perhaps he had an individual monitoring of costs under his control, but there was overall no governance structure around this project.

I still stand very firmly by our audit findings, which are supported by a lot of evidence that there was a glaring disregard for some of the most basic principles that we would have normally seen when it comes to contracting, procurement and project management.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you very much. Yes, that was my understanding as well.

Mr. MacDonald went on to say, referencing OGGO:

We provided evidence both to this committee and to the Auditor General that it was not us who selected GC Strategies. It's unfortunate the Auditor General didn't have the time to incorporate that into her report. We did speak with the Auditor General very late in the process, but it's very clear that we did not.

He claims that his interview was “a box to be ticked” after the full report was already drafted. Do you believe that Mr. MacDonald's statement is correct?

I note in your report, on page 11, that you “could not determine which agency official made the final decision”. Could you comment on that for me, please?

[Karen Hogan]

I will start. I think the deputy auditor general would like to jump in on this as well.

Everyone we interview or speak to during the course of an audit and every piece of evidence we are given, we consider. That is from day one right up until the last day. Nothing is ever done for appearances' sake. It is done to ensure that we have a complete picture so we can provide accurate, fact-based audit reports to Parliament.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you very much.

[Karen Hogan]

I can see that the chair would like to take over, but maybe we could just give the deputy a chance to say something.