Public Accounts Committee on Nov. 6th, 2024

[Catherine Poulin]

We should forget the word “negotiation” here, because they paid back the entire amount. They are negotiating the terms of the settlement. These are two different concepts.

[Kelly McCauley, Conservative, Edmonton West, AB]

I understand that. People are defrauding us, but we're giving them terms—

[The Chair, Conservative, John Williamson]

Thank you very much, Mr. McCauley. That is your time.

Up next, we have Mr. Drouin.

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

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

Ms. Reza, I have a question with regard to something you alluded to in your opening statement. You mentioned procurement vehicles and TBIPS. In ArriveCAN's case, was TBIPS a procurement vehicle that was used?

[Arianne Reza]

I think what's interesting is that there were, I think, three or four sole-source contracts where TBIPS was not used. In hindsight, that is one of the key issues. Had it gone through TBIPS, we may have had a very different outcome.

The contract referred to in the Auditor General's report, as well as the procurement ombudsman's report, where there were some irregularities, was actually through TBIPS, and work is under way there.

In general, TBIPS does a lot of business, and there's a lot of control and oversight. There are two separate streams. One is open to all vendors on the list. The list is periodically updated. I think it's an interesting opportunity, as well, to understand that there's a whole continuum of suppliers, from the micro suppliers, which have one to four employees, to the very large firms. We recently did an overview of the number of Canadians employed on government contracts through the SME lens and through TBIPS. I think, for all professional services, 280,000 Canadians were employed, providing service through SMEs to the Government of Canada through this vehicle.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

In the Auditor General's Report 1, we've read that there was a bit of back-and-forth between PSPC and CBSA. I think PSPC's role is always to push its clients to move to a competitive process, but at the time, CBSA had said, “Well, we don't have time for that.” When vendors are registered on TBIPS, does that shorten the procurement cycle or do we embark on a song and dance with an open competitive process once we are on the supply arrangement?

[Dominic Laporte]

It does indeed shorten the procurement process. Usually, you would have to post for at least 40 days. The solicitation process takes time. Having pre-qualified suppliers really fast-tracks the procurement process.

[Arianne Reza]

There's an efficiency to having it, and they've already gone through some of the solicitation process. They also have to guarantee various insurance, capacity and security elements. It certainly does accelerate it, which is why almost all professional services go through TBIPS or a supply arrangement of that nature. The fact that in the case of CBSA there was staff augmentation in April 2020 was almost unique during the pandemic.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you.

I'll go now to the Auditor General.

I know you're going to do an in-depth analysis of the contracts awarded to GC Strategies since 2011.

Will you audit the kind of procurement process that this company used?

Will you check whether the company was effective and whether it carried out the tasks assigned to it?

Will that be part of your audit, or will you only be looking at contracts that were signed and determine whether they were awarded competitively?

[Karen Hogan]

We wrote to parliamentary officials to say that we would begin auditing the other contracts awarded to GC Strategies and the companies related to them.

We have not yet determined the scope or the period of time it will cover.

We are also in the process of determining how many Crown corporations or departments will be included. However, we intend to examine the deficiencies raised, either in the files related to the ArriveCan app or in our report on professional contracts, to verify whether the contracts awarded to GC Strategies have similar deficiencies.

As soon as the scope and an approximate time frame have been set, we will communicate again with Parliament to inform those responsible.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you.

Mr. Chair, I think I'm out of time. Thank you.

[The Chair, Conservative, John Williamson]

Okay. You had a few seconds left. I'll add them on if you're running a little late next time.

Ms. Sinclair‑Desgagné, you have two and a half minutes.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Mr. Laporte, in terms of the measures taken, you said how proud you were of the work done by certain procurement officers in the departments.

What about Crown corporations, which also award contracts and in which irregularities have also been found quite often?

[Dominic Laporte]

Thank you for the question, Mr. Chair.

I have not heard any comments, negative or positive, about Crown corporations. We work very closely with the departments that use our procurement tools.

Crown corporations often launch their own call for tenders. That's why we intervene much less in the client relationship with them.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

During the pandemic, irregularities at some Crown corporations were also detected. In fact, they were studied. If you haven't heard of it yet, you will very soon.

One example that comes to mind is the contracts awarded by Export Development Canada, on a non-competitive basis, to Accenture for the management of the QEC method.

The procurement system of this type of Crown corporation also needs serious reform.

Do you have an audit mechanism for that, or is your mandate really focused on departments and agencies?

[Dominic Laporte]

We really work with the departments and officers who use our procurement tools. They are all subject to the same standards.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

So the answer is that you don't have control.

Okay, thank you.

I'm sorry, but I have so many questions to ask and so little time.

I keep coming back to the issue of non-competitive contracts because I always feel like I'm not getting good answers about that.

Since 2016, the number of non-competitive contracts reported on the open government portal has skyrocketed. It's gone up by about 30%. That's the percentage that was reported for all of 2023, the last full year for which data is available on non-competitive contracts compared to competitive contracts.

It was actually the report on the ArriveCan file that helped uncover the issue. The more we dug into it, the more we realized that the problem was much more widespread.

It is up to your department to resolve the situation by almost systematically awarding contracts competitively in order to obtain the best possible services at the best possible price for taxpayers.

In concrete terms, what are you doing about this?

[Arianne Reza]

I'll start by pointing out that, within the department, our objective is to award contracts competitively at a rate of about 80%, at a minimum.

I checked our figures, because I noted that you always talk about the 70-30 ratio, in percentage terms, for all departments.

It turns out that contracts are awarded competitively in approximately 83% of cases. I'm very relieved to see that.

My department handles only 20% of the contracts, because they are high value. I think you made an important point.

I'm looking to see what contracts we can award competitively through the system so that we can always achieve a reasonable level. From my perspective, that would be between 80% and 85%.

[Dominic Laporte]

We're always trying to work more with clients to make sure they know that competitive contracts are the norm. Basically, they're the norm, and that's what we want.

However, some contracts are for services and products that are subject to intellectual property rights and licences, so that has to be taken into account as well.

Military procurement is another thing we need to look at. In some emergency situations, we have no choice but to enter into non-competitive contracts. Non-competitive contracts are also permitted under trade agreements and government procurement regulations. When these contracts are entered into, they comply with regulations and trade agreements.

[Arianne Reza]

We can provide more detail if there's time.

[The Chair, Conservative, John Williamson]

We're out of time. I'm sorry about that. However, we may be able to come back to it later.

Up next is Ms. Zarrillo for two and a half minutes, please.

You have the floor.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Thank you so much.

Again, my questions are for witness Hogan.

In light of the multitude of audits that are required by your department and your office that protect Canadians, I'm wondering if you think it is a good use of taxpayers' money and also of your time to have you appear here over and over again. I understand you took less time this time because you have been here so many times. Because there are so many topics that matter to Canadians, I wonder if you wouldn't mind sharing whether you think this is a good use of taxpayers' money and time.

Also, when will be the next update in regard to ArriveCAN? What are the dates and things that are coming up? Then, what is next for Canadians and parliamentarians to hear about from your office in regard to audits? What's next? What's coming up?

[Karen Hogan]

It is my responsibility as Auditor General of Canada to serve Parliament and support the House and the Senate. I will appear as many times as committees invite me. I think it's very important for us to talk about our work. The more we can talk about our work and the more committees are interested in our work, I hope the more positive and swift change will happen across the public service to improve the lives of Canadians. I'm always happy to be here.

When it comes to ArriveCAN, at this moment we are not planning on a fulsome follow-up on that audit. I do talk with Deputy Minister Reza occasionally around the progress they're making. We are looking at a way within our office to see how we can follow up on a more regular basis on many of the recommendations that we have issued, but I would expect that the public accounts committee will ask for regular updates on the detailed management action plan that was provided here.

When it comes to work coming up, I am expected to table some reports, hopefully, in December. That is our plan. The exact date is what we're trying to iron out.

There are five audits that are coming up. I'm trying to remember what they all are. For sure, one is on the Canada emergency business account, so CEBA is coming up. There is something on digital identity. There are programs for seniors, the Canada summer jobs program, and industrial and technological benefits. Those would be the five reports that will be tabled in the winter.

[The Chair, Conservative, John Williamson]

Thank you very much. That is the time.

Mr. Genuis, you have the floor for five minutes, please.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Chair.

I have a quick question for the officials to start off with.

Ballpark, how much has the government lost as a result of contracting fraud in the last nine years?