Public Accounts Committee on March 6th, 2024

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Outside IT contracting has definitely been put in the spotlight because of the ArriveCAN app. What is being done to address the frequent use of outside IT talent?

We used them to develop it, but as the AG pointed out, there was probably opportunity for departments to take over management once they got it up and running, and that didn't actually happen. We haven't really been given a good answer from anyone as to why that was the case, so I'd appreciate hearing your thoughts on this.

[Dominic Rochon]

I'll take that again.

From a chief information officer perspective, we have launched a directive on digital talent. It stands to reason that there is a significant talent deficit in technology, in both the private and public sectors, and the federal public service is obviously included in that.

What we've done is put in place a directive that hopefully will strengthen the way we collect data and centralize guidance on digital talent sources. We want to improve interdepartmental coordination on that. We want to augment government-wide tools and services. We've introduced the GC digital talent platform, for example.

This directive on digital talent will, for example, require managers seeking contract services to complete a digital services contracting questionnaire. If they want to use these talent augmentation contracts in IT, they will have to check in with us and provide justification. We're trying to imbue some discipline. At the same time, though, we can't ignore the fact that we're still going to need these contracts to acquire specialized expertise to temporarily augment our workforce to keep delivering on many projects.

In this particular case, I think I would agree with the Auditor General that it stands to reason that we needed to rely on some of these contractors to get this application up and running, but as the application was developed and put into play, it would have been expected, particularly going forward, that we rely on the employees under the CIO within CBSA and the Public Health Agency to run it.

[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, you mentioned earlier that deputy ministers are responsible for applying the processes in place. Public Services and Procurement Canada has processes in place for awarding non‑competitive contracts, for example.

However, we see that Treasury Board is probably the department that awards the most non‑competitive contracts for amounts over $25,000. In fact, even after the pandemic, in 2023, 60% of Treasury Board contracts were awarded non‑competitively, without any guarantee of value for money. One‑third of contracts over $100,000 were awarded non‑competitively.

In such cases, what can you tell us about the follow‑up of the processes?

[Roch Huppé]

Thank you for the question.

Maybe I'll turn to the CFO as well, Karen Cahill.

The policies allow contracts to be awarded non‑competitively. That said, we always prefer the competitive route. When we award a contract non‑competitively, it's important to document and justify, to give the reason why it was appropriate to award the contract in this way. I don't agree that automatically it means it has no value—

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

I know the processes, Mr. Huppé. Excuse me, but I have very little speaking time, and you're repeating things that we've already heard 4,000 times in committee.

I'm asking you clearly why 60% of contracts are awarded in a non‑competitive manner. More importantly, are you sure that there are justifications? In this case, would you be prepared, at least for 2023, to provide us with the justifications that were used for the 75 or so contracts over $25,000 that were awarded non‑competitively?

[Roch Huppé]

I'll turn to the chief financial officer.

[Karen Cahill]

Thank you very much for the question.

Yes, it isn't a practice that we encourage. I can confirm that we have the documents—

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

And yet that's the case for the majority of contracts.

[Karen Cahill]

Absolutely.

Some situations mean that we have no choice but to award a contract by mutual agreement, in other words, non‑competitively. That said, we have the necessary justifications for each of these contracts that have been awarded. If it's the will of the committee, I would be happy to provide you with that information.

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

Yes, please.

[The Chair, Conservative, John Williamson]

Thank you very much, Ms. Cahill.

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

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you, Mr. Chair.

Thank you to all the witnesses for being here and sharing this testimony with us today. I very much appreciate it.

I want to talk a bit about how ArriveCAN, while being the issue we're dealing with, is clearly part of a bigger and very broken system.

I want to make some connections between the audit conducted on the government's contract with McKinsey, which was carried out last year, and the report that's in front of us today. I think there are important and similar conclusions in both reports that demonstrate that both Conservative and Liberal governments have had some real problems with giving contracts to either their corporate insider friends or folks who know how the system works.

Ms. Hogan, your report on McKinsey found that administrative requirements were not consistently followed, and your report on ArriveCAN found that practices to manage the contracts were missing “at the most basic levels”.

Are you confident that the Treasury Board is taking enough of a leadership role over departments to implement procurement frameworks as it promised to do in response to your report?

[Karen Hogan]

If I may, I will clarify to the member that I have not issued a report on McKinsey. I believe the report you're talking about was one the comptroller general's office did by asking all of the internal audit shops. I will have a report on professional services contracts coming out, and at that time I'd be happy to draw some analogies between the two for you.

I think your question is probably best directed to the comptroller general.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Absolutely. Thank you.

[Roch Huppé]

Indeed those reports were done by the internal audit shops of the departments that have contracts with McKinsey. As you noted, there were weaknesses identified. The departments had an action plan, but we at Treasury Board also produced a report that was submitted to the OGGO committee with respect to the internal modifications and changes we had made to our policies to strengthen them. In relation to the findings, we also produced a guide for managers to help them when they have to make a decision as to when and how they should engage professional services. We were trying to provide them with more tools so they could make the right decisions.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

You identified weaknesses in both reports, and you have come up with ways to strengthen the system. Do you feel as though the system is adequately strengthened? Do you think that what happened with ArriveCAN or some of the contracts we had with McKinsey could happen again?

[Roch Huppé]

We've put measures in place as a result of these reviews. With ArriveCAN the contracting was done during the pandemic, in 2020.

To respond to your question, hopefully the measures we've put in place will show some improvements over the coming while. Should there be audits in the future, hopefully we will see an improvement on the weaknesses that were detected in earlier audits. With respect to future audits, we will obviously adjust any of our actions in line with the procurement ombudsman audits on McKinsey contracts. They will be coming out soon, if I'm not mistaken. I don't want to speak for him. There will also be the Auditor General's audit that she spoke about.

[The Chair, Conservative, John Williamson]

Thank you very much.

I'll go now to Mrs. Kusie.

You have the floor again for five minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much, Mr. Chair.

It's very important to note that if the NDP member is very concerned about transparency regarding not only ArriveCAN but also McKinsey, she should be reminded that it was her party that blocked access to all of the documentation for this committee and the government operations committee to review. She should keep in mind for the future that should she truly want transparency and want to obtain all of the documentation for review, she will need to convince her party to provide her with the authority to access this documentation.

Mr. Chair, as you know, I take very seriously the responsibility of my role as shadow minister for the Treasury Board. I believe the President of the Treasury Board should take just as much, if not more, responsibility for the debacle of ArriveCAN.

I want to ask the Auditor General something directly.

Madam Auditor General, have you had a conversation with the President of the Treasury Board regarding your report on ArriveCAN?

[Karen Hogan]

I have not.

Typically, I do brief some of the ministers prior to releasing a report so they are well equipped with respect to what the findings will be. In this case, I kept that briefing quite tight and did not actually brief the Treasury Board before the report on ArriveCAN. I felt it was important that all parliamentarians receive the report at the same time.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Certainly were I in the role of President of the Treasury Board, I would be contacting you directly for a personal briefing as soon as possible, and it's disappointing to hear that this didn't occur.

Monsieur Huppé, have you had a conversation with the President of the Treasury Board specifically regarding the results of the Auditor General's report on ArriveCAN?

[Roch Huppé]

Absolutely, I did, exactly two weeks ago—not last week, but the Wednesday before—shortly after the tabling of the report of the Auditor General. I had about a 40-minute discussion with the president on the findings and on the action plan that we would be working on to make sure we deal with this adequately.

Now I'm going to pass it over to Andrew, who I think has something to add.

[Andrew Hayes]

It's just a quick clarification.

I had a discussion with the secretary of the Treasury Board, and I informed the secretary that we would not be having a briefing with the president. I want to make sure it's clear that we were the ones who initiated that decision.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, both of you.

If I was President of the Treasury Board, I would have demanded one.

I'll now pass my time to Mr. Barrett, Chair.