Evidence of meeting #109 for Public Accounts in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was dalian.
A video is available from Parliament.
Conservative
Business Owner, Dalian Enterprises Inc.
Okay, I have it on “French” right now. Do you want to try it again?
Conservative
The Chair Conservative John Williamson
You might hear me in French.
Can you hear me in English or in French? Is it working?
Conservative
The Chair Conservative John Williamson
Can you hear me in English? Did you hear what I said in English?
Conservative
The Chair Conservative John Williamson
Okay.
Ms. Sinclair‑Desgagné, you can start from the beginning. Please go ahead for six minutes.
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
Thank you, Mr. Chair.
Mr. Yeo, I have a quick first question: How many employees does Dalian have and what is its employment history since 2008?
Business Owner, Dalian Enterprises Inc.
We had, I believe, up to seven or eight full-time employees during the 2008 to 2012-13 time frame. The reason behind that, obviously, is that we were growing. That was a good time for us, but SSC came in during the 2012-13 time frame and changed a lot of our abilities to execute with the government. Therefore, there was a lot of downsizing after that, and a lot of consolidation.
We've now moved down, as a matter of fact, to two full-time employees. However, where this gets off the rails is..... Because we have a partnership with Coradix, we have a shared services model. We were doing shared services before Shared Services became a thing.
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
Okay. Thank you, Mr. Yeo.
According to the timeline provided to us by the Department of National Defence, you started your job on September 19, 2023, and a contract was signed on September 28, 2023. Only nine days later, you signed a contract while you were a full‑time employee of the Department of National Defence.
Mr. Yeo, I would like to draw your attention to the fact that, when public servants take up their positions, they must comply with the Values and Ethics Code for the Public Sector. The code states very clearly that you must declare any appearance of a conflict of interest to a superior. Did you do so on September 28, 2023?
Business Owner, Dalian Enterprises Inc.
Again, being buried two gates deep in DND in what I do with hired security there.... Also, on the 19th and even prior to that, I started to devolve myself from the company. I gave the ability for...as I was moving through the aspects of divestiture with my lawyers and everything else. It took some time. I will agree. That timing is not charitable to your timeline of only a few days.
However, the short answer is this: No, I did not inform anyone at the department that I signed anything. Then again, I did not actually sign it. I had a signature available for the staff at the office to use after the 19th—
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
Sir, you know very well that in court, a signature has legal effect. If your signature was put to a contract by someone else, you are responsible for it. I hope you are aware of that, because you are responsible for the contract that was signed on September 28. It's your signature, so you're accountable.
Apparently, you did not inform a supervisor that there was at least a very strong appearance of conflict of interest.
We learned through the newspapers that, according to the Public Accounts of Canada, Dalian had received nearly $150 million in total for contracts since 2008. I understand that there are subcontractors. The fact remains that, for a company that has had at most 10 employees, that's a lot of money.
Why did you accept a position that paid less than $100,000 with the Department of National Defence when your two-person company had made $150 million in a few years?
Business Owner, Dalian Enterprises Inc.
That's a good question, and I appreciate it.
Yes, we had some great years between 2008 and the run-up to Shared Services. We had some pretty lean years between 2013 and now, basically, from a hardware-software perspective, for sure. You know, my reasoning for getting back into the department was not based on money. I did 36 years with the department in varying capacities, whether regular forces, reserves or by contracting time plus my 168 days as a civil servant.
However, I got back in primarily to drive capability and high-assurance guarding solutions towards the war fighters who are in harm's way on the eastern flank of NATO. That was my job there. That was my claim and what I did at the department. Because I was there for so long, I understood it, and I was at the pinnacle of my technical abilities. It made sense for me to get in and drive technology down to the war fighters who need it the most.
That's primarily the reason, because I didn't do it for the money.
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
During that time, a contract was nevertheless awarded to Dalian by the Department of National Defence to carry out work, and that contract was signed by you.
How many hours of work did you do? How many hours of work did Dalian carry out on the last contract I mentioned, the one signed on September 28, 2023? What work did Dalian do on that contract?
Business Owner, Dalian Enterprises Inc.
Again, I got right into that part of it just recently because it was a very small contract. I think it was $40,000 or maybe $49,000, from what I'm aware of, but it was attached to a hardware—
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
The average annual salary of a Quebecker is $40,000. That is not a “small contract”. If I were you, I would choose my words carefully.
Business Owner, Dalian Enterprises Inc.
Yes, but 75% or 80% of it goes back to the consultant doing the work.
To answer your question, though, there is precedence for how you handle conflict of interest within a 60-day period or windows of that time frame, and I did put in a no-access, no-contact, no non-disclosure with Dalian within that 60-day period. I signed that on November 10, 2023, which was within the 60-day window.
After that, we were working with lawyers and getting our stuff together as far as forms and everything were concerned, getting my divestiture done and that sort of stuff during the time frame, and that has already been submitted to DND as well, but, due to the hype and everything else around this particular ArriveCAN app, I ended up having to put in my resignation. I was still on probation because I was only there for 168 days.
Conservative
The Chair Conservative John Williamson
You still have time for a short question, Ms. Sinclair‑Desgagné.
Conservative
The Chair Conservative John Williamson
Okay, thank you.
Next up is Mr. Desjarlais.
You have the floor for six minutes, please.
NDP
Blake Desjarlais NDP Edmonton Griesbach, AB
Thank you very much, Mr. Chair.
I want to thank the witness for being with us today. It's a very important topic.
My colleagues asked some questions, but I'll have you reiterate some of the responses you gave in relation to the origin of your company.
When did your company start under the name Dalian?
Business Owner, Dalian Enterprises Inc.
Well, I started it myself in 2001-2002. I don't have the exact date on me, but there are documents that stood up the company at that time, and I named the company myself.
NDP
Business Owner, Dalian Enterprises Inc.
It was very shortly thereafter. I was talking with Terry Matthews here in town at a breakfast meeting, and he mentioned to me that I should go after indigenous business because that was something he was aware of.
At that point I looked into it, and I found an indigenous contract that I could go after, and I won it within the first year that I started the company.
NDP
Blake Desjarlais NDP Edmonton Griesbach, AB
How large was your company then, and how large is it now?