Evidence of meeting #126 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 kpmg.
A video is available from Parliament.
NDP
Blake Desjarlais NDP Edmonton Griesbach, AB
Do you believe that was a red flag to not question who GC Strategies was, their capacity or their ability to deliver work?
Partner, Cybersecurity, KPMG
That's where I lean on our risk management processes that I discussed earlier, to find out if red flags occurred. What we do is we take the information back and we submit that information through that process to validate, and no red flags came up.
As I mentioned earlier, the Government of Canada itself—and not just the CBSA, but many other departments—had awarded this same company numerous contracts, which further validates our decision.
NDP
Blake Desjarlais NDP Edmonton Griesbach, AB
You're saying that you went through all the processes. You and Mr. Utano and everyone in the room went through all of the regular procurement processes, including a red flag assessment, which is what you just described. Did no one flag that this two-person company that does no work was a problem?
Partner, Cybersecurity, KPMG
I can't speak to the processes that Mr. Utano went through, but certainly I can speak to our processes. Yes, that is the result of our process.
Partner, Cybersecurity, KPMG
Keep in mind that the processes are at a point in time. At that point in time, that's the information that arose. I suspect, if run today, the result would be different.
Conservative
The Chair Conservative John Williamson
Thank you very much. That is the end of the first round.
Beginning the next round is Mr. Genuis. You have the floor for five minutes, please.
Conservative
Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB
Thank you, Chair.
Mr. Bernard, based on federal government records, the Auditor General believed that your company did 3 million dollars' worth of work on ArriveCAN. You said that the work was about $500,000. This points to something we know is a big problem: shoddy and impenetrable records. In some cases we've also dealt with the deletion of records, questions or records not kept. Do you have any reflections on how the government records that the Auditor General consulted could have been so off the mark compared to your own assessments?
Chief Executive Officer, Donna Cona Inc.
I do, but I'll defer that to my partner, because we spoke about this prior to coming in.
President, Donna Cona Inc.
You said about $500,000, and I think in the AG report they talked about how there was some internal financial coding that was unsure. We would submit time sheets with deliverables, and then what happened after that, we don't really know. They would have put whatever coding they had against it, so other than that we're at a loss as to what happens after we submit time sheets.
Conservative
Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB
You submit time sheets. There's internal financial coding that apparently is inconsistent with the time sheets you submitted or is unreadable to someone looking at it.
Conservative
Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB
Right, exactly, but that suggests there's something very dramatic lost in translation, because that's an order of magnitude of six times.
At the government operations committee we're looking at indigenous procurement and we're planning some further study on it. Mr. Bernard, you told us a story about growing up on reserve, starting a successful business that employs indigenous people and investing back into your community. Based on what we know from your testimony, that seems like precisely the kinds of outcomes that indigenous procurement policies are meant to support.
However, we also know now clearly that there are instances of abuse as well: tiny companies that become qualified as indigenous but that subcontract the actual work to non-indigenous firms and do not provide benefits back to indigenous communities. You were quoted in The Globe and Mail saying that you “tried for years to advise the government on how it could refine its Indigenous set-aside contracting policies”.
Sir, what is your advice? How can the current problems—the use of the Dalian model, for instance—be fixed to achieve the kinds of outcomes that the program is supposed to aim for?
Chief Executive Officer, Donna Cona Inc.
Well, it's actually on record. In 2006 I sat in front of a Senate committee on aboriginal procurement. Back in 2006 I warned of the potential abuse of joint ventures, and to this day, 18 years later, we are seeing the results of that. Basically, I was using terms like, “Aboriginal companies need to learn how to walk before they run,” yet, amazingly, Donna Cona has been in business 28 years, and we find ourselves up against aboriginal firms that just got into business and are running multi-million dollar contracts.
I guess what I'm trying to say is that being an aboriginal is not a skill, yet in aboriginal procurement with joint ventures, it's almost like if you're aboriginal, all of a sudden that's the quality you're bringing to the joint ventures, and we just don't agree with that. Obviously, you have to start somewhere, so they should be small, but we believe the aboriginal side of a joint venture should progress. They shouldn't be going after a $100-million contract when they were riding an ice cream truck the week before.
If you go back to the 2006 testimony—which is on record with the Senate committee—in there I actually give three ways that I think it should be addressed. The first one, most importantly, is the joint venture. That's where there's really a lot of room for abuse. Unfortunately, there's no motivation for aboriginal companies to grow, because if you can become a joint venture, you don't have to do anything. You don't even need staff or admin staff, because your joint venture partner has all of that.
Conservative
Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB
I think we need to refer to that earlier testimony, because I suspect you can talk for a long time on this, and maybe we'll have to have you back, but that seems exactly what happened with Dalian and Coradix. Isn't that right? Coradix is a larger, non-indigenous company. Dalian is an indigenous company, with two people, that receives contracts and subcontracts. They're in joint venture, which fulfills a procurement requirement.
Also on the issue of subcontractors, you mentioned that your company has subcontractors. There's supposed to be a requirement for indigenous subcontractors as part of indigenous procurement, but there seems to be no tracking or enforcement of that whatsoever. What is your experience with indigenous subcontractors, and is the government asking you questions about that? Are you providing data on that at all?
Chief Executive Officer, Donna Cona Inc.
No, and let's face it, there aren't enough indigenous people to meet some of these contracts. Calling myself an aboriginal company or an indigenous company, just because I own 100% and I'm a status Indian from.... I don't believe that's what it should be. It should be aboriginal benefits. It's not what we....
People ask me, “Well, you're an aboriginal company, so what does that mean? Do you stand on one leg?” No. We do business just like everybody else. In calling myself an aboriginal company, it's what we do, and not just in hiring indigenous people but in the sponsoring, the supporting and then spinning off other aboriginal business. As I explained about my community, that, to me, is the solution. I'm sorry, but if you're just going to hire aboriginal people and you think you're going to get 50 aboriginal people on a 150-person project, that's just not going to happen in this field.
Conservative
The Chair Conservative John Williamson
Thank you very much. That is the time.
We move now to Mr. Weiler. You have the floor for five minutes, please.
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
It's a pleasure to be joining this committee for the first time and to be joining the study. I have not had the time other folks on this committee have had to look into this in detail, but like all Canadians, I've been following the drama as the different layers of this app got uncovered. It's a pleasure to join in on this process and to look into this in more detail today.
Mr. Bashir, I start with you. First off, just going back to your experience with the Treasury Board Secretariat, what were the particular roles you had, again?
Partner, Cybersecurity, KPMG
I held a variety of roles, but my stint with the Treasury Board started in July 2011. I could walk you through the path, if you'd like.
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
What I am most interested in is your relationship with the procurement process while you were at Treasury Board.
Partner, Cybersecurity, KPMG
Oh, I probably didn't start procuring anything—like in a role in which I was procuring anything myself—until, probably, 2017, in the role of director general, cybersecurity.
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
You mentioned that you had encountered Mr. Firth several times while you were at the Treasury Board. Can you describe the nature of those meetings?
Partner, Cybersecurity, KPMG
Yes. I mentioned earlier that Mr. Firth was probably like every other vendor in town, who would send an email and try to get a meeting to discuss a product or a service they offered. There were two in particular that I think I was discussing earlier: One was around secure communications and one was around digital identity. Both were files that fell under my portfolio, so it piqued my interest to hear a bit more.
The nature of the meeting was a bit of a debrief on the service or the product he was offering at the time. As I mentioned, both meetings occurred in the lobby of the building I worked in, which is 90 Elgin, and nothing really followed after that, to be clear.
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
In these meetings with Mr. Firth, and more generally in procurement, was it a common practice that you'd see for the types of services GC Strategies would offer—getting the contract and subcontracting it from there? Was this a regular practice you would see?
Partner, Cybersecurity, KPMG
My role was a little different at the Treasury Board. For context for the committee, where I worked in the Treasury Board was more of a policy organization—setting policies, standards and directives for the rest of the public service to follow—so we didn't typically procure any goods per se. However, in order to do my job properly and set forth a forward-looking cybersecurity strategy for all of government, it was incumbent upon me to understand where the industry was heading, how technology was evolving and so forth, so that was the general gist of the interactions with Mr. Firth. We didn't really discuss subcontracting or any of those things you asked about.