Evidence of meeting #150 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 pspc.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Karen Hogan  Auditor General of Canada, Office of the Auditor General
Arianne Reza  Deputy Minister, Department of Public Works and Government Services
Catherine Poulin  Assistant Deputy Minister, Departmental Oversight Branch, Department of Public Works and Government Services
Dominic Laporte  Senior Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
Andrew Hayes  Deputy Auditor General, Office of the Auditor General

4:30 p.m.

Conservative

The Chair Conservative John Williamson

Good day, everyone.

I call this meeting to order.

Welcome to meeting number 150 of the House of Commons Standing Committee on Public Accounts.

Today's meeting is taking place in a hybrid format. Pursuant to the Standing Orders, members are attending in person in the room and remotely using the Zoom application.

Before we begin, I'd like to ask all in-person participants to read the guidelines written on the updated cards on the table. These measures are in place to help prevent audio feedback incidents and to protect the health and safety of all participants, especially our interpreters.

I have a kind reminder for all those in person and online. For the safety of our interpreters, it is important that your microphone be muted when you're not speaking.

Thank you all for your co-operation.

I remind you that all comments should be addressed through the chair.

Pursuant to Standing Order 108(3)(g), the committee resumed consideration of the report 1, ArriveCAN, referred to the committee on Monday, February 12, 2024.

I'd like to welcome all our witnesses.

From the Office of the Auditor General, we have with us Karen Hogan, Auditor General of Canada. It's nice to see you again.

We have Andrew Hayes, deputy auditor general, as well. It's good to have you back, sir.

We also have with us Sami Hannoush, principal. You've been here before, and it's good to see you again.

From the Department of Public Works and Government Services, we have Arianne Reza, deputy minister. It's nice to see you again. You've also been here previously. It's nice to have you and your team back.

We also have with us Catherine Poulin, assistant deputy minister, departmental oversight branch, and Dominic Laporte, senior assistant deputy minister, procurement branch. It's good to see you as well.

Again, we're going to begin with opening remarks.

Ms. Hogan, we'll kick off—

4:30 p.m.

Conservative

Larry Brock Conservative Brantford—Brant, ON

I have a point of order, Chair.

4:30 p.m.

Conservative

The Chair Conservative John Williamson

Wait just one second, please, Ms. Hogan. We'll come right back to you.

4:30 p.m.

Conservative

Larry Brock Conservative Brantford—Brant, ON

Mr. Chair, today an explosive story from Le Journal de Montréal hit. The headline reads, “Minister Guilbeault holds financial interest in a firm linked to a controversial federal fund” and “His office flatly refuses to give details on the subject”.

As we all know, Minister Guilbeault has held a financial interest in Cycle Capital. Cycle Capital has received well over $600 million from the scandalous green slush fund. He holds a financial interest as a minister.

This committee passed a motion on October 7, 2024. I'm asking for an update, Mr. Chair. Has he accepted our invitation to attend? He has a lot of questions to answer. If he refuses to answer in the press, he will not be able to use that excuse here at committee.

4:30 p.m.

Conservative

The Chair Conservative John Williamson

Thank you, Mr. Brock.

I'll provide just a brief update. The clerk and I have extended the committee's motion and request for the environment minister to appear. He has yet to do so. We have sent reminders and we are.... We have made the committee available on dates of his choosing, but we have not heard a response in the affirmative yet.

4:30 p.m.

Conservative

Larry Brock Conservative Brantford—Brant, ON

Thank you, Chair.

4:30 p.m.

Conservative

The Chair Conservative John Williamson

We will keep on it. Thank you very much.

We're turning now to the business at hand.

Ms. Hogan, you have the floor, please.

Karen Hogan Auditor General of Canada, Office of the Auditor General

Mr. Chair, thank you for this opportunity to discuss our report on ArriveCAN.

I want to begin by acknowledging that we are gathered on the traditional unceded territory of the Algonquin Anishinabe people.

Mr. Chair, we've appeared before this committee a number of times since last February, so I will not make an opening statement today, but you will be able to refer to my previous statements.

That said, we will be very pleased to answer any questions the committee may have.

4:30 p.m.

Conservative

The Chair Conservative John Williamson

Thank you very much.

Things are moving quickly today.

Ms. Reza, if you'd like to make an opening statement, you have the floor for up to five minutes, please.

Thank you.

Arianne Reza Deputy Minister, Department of Public Works and Government Services

Thank you. I don't know if I can be as succinct as the Auditor General, but I will try.

Mr. Chair, thank you for inviting us here today to discuss the procurement processes related to ArriveCAN.

Let me begin by acknowledging that we are gathered on the unceded territory of the Algonquin Anishinabe people.

Joining me, as you noted earlier, are Mr. Laporte and Madam Poulin, both of whom are assistant deputy ministers at PSPC.

Mr. Chair, in addition to the measures I will describe momentarily, I want to acknowledge how frustrating it is for Canadians and parliamentarians alike not to hear simple and clear answers as they relate to ArriveCAN.

On behalf of PSPC, we remain focused on reinforcing the integrity of the procurement process and what we need to do to regain the trust of Canadians. To do so, we need to demonstrate that the system is fair, open and transparent.

The first contract associated with ArriveCAN was awarded in April 2020, in a period of great uncertainty and risk. Four and a half years later, we're still working with various independent reviewers and oversight bodies to understand the gaps that allowed this situation to occur and to put in measures to prevent this from happening again.

In this vein, PSPC has implemented a series of oversight measures, particularly when it comes to documenting requirements and decision-making during the procurement process.

Late last year, PSPC took the unprecedented step of suspending all departments and agencies' delegated authorities to procure professional services until they formally agreed to a new set of more rigorous terms and conditions, and were able to demonstrate adherence to PSPC.

To date, 99 departments and agencies, including the Canada Border Services Agency, have now signed on to these agreements that require them to include provisions in their solicitations which will result in increased transparency from suppliers on their pricing and their use of subcontractors.

Some of the other changes we've made to address recommendations from the procurement ombud and the Auditor General include the following. There are four: first, improving evaluation requirements to more effectively validate that suppliers have the necessary qualifications and proven work experience; second, improving documentation requirements to enhance the tracking of work progress and delivery timelines; third, requiring clients to review invoices in greater detail; and finally, improving training and assistance for contracting authorities within both PSPC and client departments.

In addition, we have created the contract quality assurance and record compliance office to review the completeness and accuracy of files as a proactive measure to address documentation shortcomings.

Mr. Chair, I would also like to say a few words regarding one of the methods of supply for professional services that has been the subject of much discussion in committee.

The task-based informatics professional services method of supply, or TBIPS, as it's commonly known, enables the government to pre-qualify suppliers and categorize their services into specific streams, enabling us to efficiently match government needs with service providers. Through TBIPS, the government buys IT services, such as software development, project management, cybersecurity, network support, database management, business analysis, quality assurance and technical support for government departments. TBIPS supports the participation of small and medium-sized enterprises, because it breaks projects down into smaller, task-based components, providing more opportunities to compete for government contracts. This, in turn, is a key enabler of economic growth in Canada.

Let me now move to our efforts to prevent and detect fraud, and address wrongdoing.

As you know, PSPC has been using data analytics to uncover a number of instances of individual subcontractors fraudulently billing the Government of Canada. We are currently in the process of seeking restitution to the Crown in these cases.

In this regard, PSPC has taken steps to further strengthen oversight of federal procurement with the establishment of Office of Supplier Integrity and Compliance. In addition to expanding our data analytics capacity, the new office has enabled us to better identify and mitigate the risk associated with suppliers of concern.

The office promotes fair competition and upholds public trust in federal procurement by boosting our capacity to better know with whom we are doing business.

In closing, my department is responsible for managing procurements and establishing contracts on behalf of departments and agencies. These, collectively, are worth $27 billion each year. We take this responsibility seriously, and I know our procurement officers work diligently every day to fulfill these important responsibilities. We remain committed to working to continue to improve and safeguard the integrity of the government's procurement system.

I close where I left off: For the trust of parliamentarians and Canadians, the integrity of the procurement system needs to be reinforced and become open, fair and transparent once again.

4:35 p.m.

Conservative

The Chair Conservative John Williamson

Thank you very much, Ms. Reza. I appreciate those opening comments.

We're turning now to our first round for members. They will have six minutes each.

Mr. Brock, you'll lead things off for us today.

4:40 p.m.

Conservative

Larry Brock Conservative Brantford—Brant, ON

Thank you very much, Mr. Chair.

Thank you to all of the witnesses for their attendance today and for their previous attendance at numerous committees.

What we are talking about today, at least from my perspective, is the ongoing examination and prosecution of the ArriveCAN scandal. It clearly exposed the failures of Canada's broken procurement system and the fraudulent misuse of hard-earned taxpayer funds. One consistent response I get from Canadians from coast to coast is that they're demanding accountability, consequences and recovery. It is the two latter points, consequences and recovery, that will be the focus of my first round of questions.

Deputy Minister Reza, you've appeared numerous times at this committee and at government operations. A question was put to you when you appeared last June at government operations with respect to the total cases of contracting fraud that had been referred to lawful authorities, particularly the RCMP. I have your response to that question. You said, “We have previously referred many fraudulent overbilling cases from 2022, 2023 and 2024 to the RCMP,” but it was devoid of details.

I'm asking whether you could explain what you meant by “we have previously referred many...cases”. What does that mean? Can you give me a number, please?

4:40 p.m.

Deputy Minister, Department of Public Works and Government Services

Arianne Reza

I certainly will. Thank you very much for the question.

I want to give you a baseline. The procurement system within the Government of Canada, both at PSPC and more broadly, does about 400,000 procurement transactions. Those are contracts and contract amendments.

Since 2022, under the auspices of PSPC, we've started to use data analytics and mining approaches to be able to look at contracting data. At that time—and I think we'll have to break it into two—when I indicated the ones that had been referred, four cases had been referred. That was from 2022. We provided, in camera, to OGGO the names that were referred to the RCMP.

Since that time, there have been three further referrals to the RCMP, in October, for similar overbilling to the Government of Canada.

4:40 p.m.

Conservative

Larry Brock Conservative Brantford—Brant, ON

That's seven in total.

4:40 p.m.

Deputy Minister, Department of Public Works and Government Services

Arianne Reza

That is correct.

4:40 p.m.

Conservative

Larry Brock Conservative Brantford—Brant, ON

Okay. Is that for the year 2024, or does that include from 2022 to 2024?

4:40 p.m.

Deputy Minister, Department of Public Works and Government Services

Arianne Reza

It includes everything we've found since 2022. We're constantly looking, but this is what's been found to date.

4:40 p.m.

Conservative

Larry Brock Conservative Brantford—Brant, ON

All right.

You gave us the names. There was a bit of push-back, I believe, particularly from Ms. Poulin. There was some push-back. Eventually, you gave us the names.

I would like the names, then, of those additional four referrals. If you have that information now, please share it. If you need to table it at a later date, I'll allow you to do that.

Is that something you're prepared to do?

4:40 p.m.

Deputy Minister, Department of Public Works and Government Services

Arianne Reza

Absolutely.

When it was asked of us the last time, we provided it within 21 days. We will provide it in the same format to this committee.

4:40 p.m.

Conservative

Larry Brock Conservative Brantford—Brant, ON

Okay. Thank you for that.

I'm also mindful of the fact that in late spring, Minister Duclos and Minister Anand were quite concerned about the level of contracting fraud with subcontractors. Minister Duclos indicated that the initial three were simply the first wave of suspected fraudulent billing. He indicated very clearly that there would be additional waves.

Do I take that to mean that the four additional referrals represent that additional wave?

4:40 p.m.

Deputy Minister, Department of Public Works and Government Services

Arianne Reza

That is my high-level understanding, but we can get some details from Madame Poulin.

Catherine Poulin Assistant Deputy Minister, Departmental Oversight Branch, Department of Public Works and Government Services

Thank you for the question.

There were three referrals made in October. There are three new cases, and this represents the second wave of fraudulent billing cases.

4:40 p.m.

Conservative

Larry Brock Conservative Brantford—Brant, ON

Will there be further waves? Are you still examining in fine detail, from top to bottom, any other potential criminality, particularly in contracting?

4:40 p.m.

Deputy Minister, Department of Public Works and Government Services

Arianne Reza

Let me start by answering this. It's going to be something that is evergreen and ongoing.

We look for the best ways to inform Canadians and parliamentarians about it, but to think that it's one wave after another.... As I indicated, we do 400,000 procurement transactions a year. We've started to really review it using data analytics. We have, since 2022, now found a total of seven cases. We can talk about restitution.

It would be inconceivable to me not to think that we are going to continue to do this type of work and continue to uncover overbilling.

4:45 p.m.

Conservative

Larry Brock Conservative Brantford—Brant, ON

Okay.

I'll dovetail on the Auditor General's report, which provided some detailed examples of the potential criminality, in my opinion, of certain contractors. GC Strategies, or Government of Canada Strategies, was one of them, led by Kristian Firth. He's completely under RCMP investigation. In fact, his home was raided the night before he was to testify at the bar of the House of Commons. He's definitely looking at fraud charges.

On the question of recovery, there was a motion passed in the House toward the latter end of the last session, which demanded that the government provide details on what steps it was taking for recovery. I have since asked a number of ministers, through a number of mediums, what steps they're taking for recovery, and I never get a clear answer. There's been no answer at all.

Ms. Reza, what instructions have you been given by Minister Duclos, or any other minister, or the Prime Minister or the PMO, on recovery efforts?