Public Accounts Committee on April 4th, 2024

[Lydia Lee]

To our knowledge, all of the work that KPMG has done has been under the specific procurement processes set out by the government, and we are extremely proud of the quality—

[Larry Brock, Conservative, Brantford—Brant, ON]

So the answer is no.

[Lydia Lee]

—of the work that we've done.

[Larry Brock, Conservative, Brantford—Brant, ON]

The answer is no.

Has KPMG been contacted by the ombudsman on this matter?

[Lydia Lee]

To our knowledge, we have not been contacted by the ombudsman's office.

[Larry Brock, Conservative, Brantford—Brant, ON]

Will you work co-operatively with the ombudsman as he investigates the bait and switch? Clearly, you're going to be involved in this, given the amount of monies you've received in government contracts. Will you co-operate?

[Lydia Lee]

As I said, of course we would co-operate with any governmental bodies that would contact KPMG. We have not been contacted by the ombudsman directly. Of course we would comply.

[Larry Brock, Conservative, Brantford—Brant, ON]

Now, Justin Trudeau, during the last eight and a half or almost nine years, has increased the size of the federal professional public service by over 40%. In 2015, he promised to cut back on the use of external contracts, yet in the fiscal year 2022-23, he spent $15.7 billion on professional and social services, some of that going to KPMG.

I know that you are retained by the Government of Canada as a consultant to provide an opinion or a recommendation on the government's ability to cut down on consultants. Leaving aside the irony of hiring a consultant to teach the Government of Canada how to cut back on consultants, I personally could have saved the government almost $700,000 by simply saying, “Use the federal public service that you increased by 40%.”

Now, you released that report directly to the government. Is that correct?

[Lydia Lee]

Neither Mr. Nijjar nor I was directly involved in that work, but we are aware and we also understand that.... It's very typical for KPMG to be called in to do third party reviews like that.

[Larry Brock, Conservative, Brantford—Brant, ON]

Thank you.

The report itself has not been tabled with all parliamentarians. Will you provide this committee with the full report?

[Lydia Lee]

As I said, neither of us was involved in that work, so I can't comment on—

[Larry Brock, Conservative, Brantford—Brant, ON]

Someone at KPMG was. Will you find out who was responsible for conducting the work and provide this committee with the report, yes or no?

[The Chair, Conservative, John Williamson]

Thank you, Mr. Brock.

Is that something you could endeavour to get back to the committee about?

[Lydia Lee]

Thank you.

I was simply going to say that our understanding was that if the work was done for the government, it would definitely be on the public record. If we're allowed to disclose it without violating confidentiality, then of course we would be happy to comply.

[The Chair, Conservative, John Williamson]

That's fine. We'll take it one step at a time. If you're able to get back to us on the status of that, I'll work with the analysts on this side to see if that's available. I'd ask you to report back to us any limitations you have. I do understand that obviously there are client privileges. Parliament supersedes that, but we're not there yet. Let's just see where it's at, as a first step.

Mrs. Shanahan, you're up again for five minutes, please.

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

Thank you, Mr. Chair.

I can understand the direction of Mr. Brock's questions, and certainly Mr. Barrett's questions, regarding the practices of KPMG with senior government officials, because of course we know that KPMG publicly had its senior officials meeting with top Conservative cabinet ministers in 2014 and 2015. The revenue minister at the time, Kerry-Lynne Findlay; the finance minister at the time, Joe Oliver; and former prime minister Stephen Harper were all very happy to appear in public with officials from KPMG's tax department during a time when CRA auditors were conducting an investigation into the KPMG accounting firm's tax schemes and seeking names of multi-million dollar clients.

I can understand the direction of these questions, because of course the opposition is desperate to find a link with ministers of the current government. Has either of you ever met with a minister of the current government in line with this contracting work?

[Hartaj Nijjar]

I have not, and I believe that Ms. Lee has not either.

[Lydia Lee]

No, I have not.

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

Thank you very much for that.

Of course, we recognize that it was very critical to have the involvement of your expertise in dealing with the unprecedented situation of the pandemic. Unfortunately, some people decided to take advantage of this crisis for their own interests, including, of course, a Conservative insider who was very proud to show his donor card and talk about his desire to be a candidate for the Conservative Party, as well as the PPC, David Yeo of Dalian.

I understand that you have not dealt with Dalian, and so much the better, but in your client engagement process, what changes have you made now to the process you have internally, given what you know today?

[Lydia Lee]

In terms of our internal processes, as we described before, we do very specific client and engagement acceptance processes internally in KPMG. We have not changed any of our processes at all. They were rigorous before, and they're really rigorous now, but we haven't fundamentally changed any of those processes.

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

The Auditor General did note that there was a lack of documentation regarding the contracts that KPMG had. Do you agree that both sides...? Certainly, PHAC and PSPC have to do their part, but do you believe that both sides should be responsible for ensuring that the necessary documentation is in place when a contract is non-competitive?

[Lydia Lee]

We did everything we were asked to do in terms of providing documentation to the Public Health Agency and, prior to that, PSPC, when we were responding to the CEPS RFP. As I said earlier, we were under the direct impression that the Public Health Agency was also providing the appropriate documentation, but we were not privy to any of that internally with the work we were doing.

I don't know if there's anything else to add on the CBSA contracting.

[Hartaj Nijjar]

No, I think you've covered it. Thank you.

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

What kinds of documentation would be normal on your side, even in an unusual circumstance like the pandemic?

[Lydia Lee]

I'll give you a very specific rundown of the kinds of documentation we had for the Public Health Agency work.

In addition to weekly detailed status reports that talked about the specific status of all of our activities, deliverables and the meetings we were undertaking, which we gave in writing to the Public Health Agency, we also provided all of our deliverables, obviously, to the Public Health Agency sponsors and the team members we were working with. Those were all quality-reviewed by a secondary partner in our firm to make sure we were meeting all of our compliance requirements but also providing the right level of quality and standards to meet the Public Health Agency's requirements.

Again, as related to any contracting, of course all the necessary statements of work documentation that would accompany the contracts was part of the package we had to provide. We also had to sign a form that said we would maintain the same rate structure and rate card, which was the very same rate card that was established in the original CEPS TA, which we held constant for a two-and-a-half-year period. There was all of that documentation, and of course executed documents for the contracting and so on were provided directly to the Public Health Agency for every phase of the work we did.