Public Accounts Committee on March 21st, 2024

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

For how long has the company named Calian been a contractor to your ministry?

[Bill Matthews]

I will have to get back on the date. I know that Calian receives significant contracts from the department for multiple purposes, including supplementary health care services for our armed forces members.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Just on that, let's speak about the supplementary health care contracts.

I'm sorry. Let me just back up a bit. The business of Calian, apparently, according to their website, is as a business solutions consulting firm often contracted to work by Defence Construction Canada and the Department of National Defence, which is compensating contracted health care workers at market rates along with additional overhead charges.

You spoke about how expensive these things are and how inefficiencies are building when this is happening in your ministry today. Contractors with Calian received higher pay, received bonuses during the pandemic, and were rewarded for working holidays. We know that the Canadian Armed Forces health care workers have highlighted that internal public service employees are leaving the Canadian Armed Forces, only to return to the same job, at the same base, under Calian, for better wages.

Are you aware of this happening in your ministry?

[Bill Matthews]

We're certainly aware that Calian supplements health care services provided by armed forces members. We have examples of people who—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Are you aware that it's weakening our public service health care providers?

You spoke about the risk. One of the issues was compensation. You know about this issue. What actions will you take in order to make sure that public health care workers who are working on bases get fair treatment, instead of assisting in the subcontracting or contracting out of these health services at a higher cost? Canadians are getting robbed.

[Bill Matthews]

Mr. Chair, number one, we're aware of members who have left and joined Calian or similar companies. We're also aware of some who have gone the other way. Again, if we can turn those resources into employees, that is better for us. Some are not interested—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

But it's going the other way around. That's the problem. Do you understand that?

[Bill Matthews]

I do understand that.

Supplementing the employees with contracted resources where we don't have enough employees—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

What you're doing is not working.

[The Chair, Conservative, John Williamson]

That is your time, I'm afraid, Mr. Desjarlais. I'll have to come back to you and your line of questioning.

Mr. Barrett, you have the floor for five minutes.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Mr. Matthews, Mr. Yeo, the owner of Dalian, got contracts worth millions of dollars before joining your department. Is that correct?

[Bill Matthews]

Yes. He has contracts with National Defence and with other departments as well.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

You said that his salary range was between $80,000 and $100,000 a year. That's a good salary, but do you not find it odd that this individual, Mr. Yeo, a millionaire, making 30% on these contracts, would then pursue employment with the department that he was getting business from as a contractor to make his millions?

[Bill Matthews]

To answer your question simply, yes, I do find that odd, and I find it concerning. I will say that one thing he was aware of was a plan to consolidate some of the contracts we had on that project team, so there was a risk that his contracted work would end. That may have factored into his choice to become a public servant.

Iif he truly was making the amount of money through his business dealings that we now think he was, through the markups, etc., it is hard to comprehend how that math works for him as an employee, unless he was able to do his other business at night and on weekends and this just offered some steady income. The math is questionable, for sure.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Yes. He described his position as “a very low-level position”, so it's highly suspicious, at best, that this would be allowed to happen.

[Bill Matthews]

Allowed to happen in terms of his choice, but you're quite right; there were no public servants reporting to him in that job. He was at the bottom of the org chart. He probably was supervising a few contractors, but it was a low-level position.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

He described himself as leading teams.

[Bill Matthews]

If he was leading a team, he may have been leading some contractors, but he was not leading any public servants or military members.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Would any of those subcontractors have been subcontractors of Dalian?

[Bill Matthews]

We don't believe so, but we are confirming that. Troy will jump in here in a second, but the reason I say that is that I am almost 100% sure it wouldn't be Dalian. I mentioned that he has business dealings with other companies. I think we know who they are, but I can't say with 100% certainty that we have all that nailed down, so we want to confirm that.

Troy may have an update.

[Troy Crosby]

Mr. Chair, we have looked into this. There were five contractors working on the team that Mr. Yeo was leading on the project. Those contractors had all been in place prior to his starting with us as a public servant. None of them was a resource provided by Dalian.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Okay.

Certainly the committee and parliamentarians would be eager to see a return on any work that you are preparing specifically in this regard, if you'd be willing to provide it.

[Bill Matthews]

There are two parts to that, Mr. Chair.

First, perhaps we can offer a list of the other companies that we know Mr. Yeo dealt with in terms of subcontracting joint ventures.

Troy, perhaps there is something else we can provide on those other contractors.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Mr. Crosby, do you know who they worked with or where these resources were supplied from?

[Troy Crosby]

We have the contract names and we can provide that information.