Public Accounts Committee on Nov. 6th, 2024

[Catherine Poulin]

Thank you for the question.

Yes, that's correct.

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

Thank you. I like that kind of answer.

Ms. Reza, I want to follow up on some interesting questions that were asked earlier.

During the pandemic, you provided justifications on several occasions, and you signed contracts with GC Strategies. According to emails between PSPC and CBSA, one of your employees, Angela Durigan, raised concerns about the justifications, which seemed insufficient to award a multi-million-dollar non-competitive contract to GC Strategies.

This employee received a response from CBSA. That answer was dubious, but she thought she had all the answers she needed. It's as if she just needed to get the justifications and check a box, and the substance of the justifications didn't really matter. All it took to approve the PSPC contract was that justification. That's how the contract made its way through the department.

I know you weren't looking at the details at your level, but at some point in the chain of approval, PSPC did not do its duty and failed to ensure that contracts were awarded appropriately.

If an emergency were to arise again, what would be done differently? Obviously, I hope that never happens.

[Arianne Reza]

I want to clarify a couple of things before I answer your question.

First of all, I did not sign the contracts. I gave approval.

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

Your signature is on it, though.

[Arianne Reza]

I gave the approval, but I did not award the contracts. There were three levels of approval. I just want to make that distinction; I didn't sign the contracts.

Second, there's the client's responsibility. The Auditor General talked about the executive director. It's the client's responsibility to provide the justification when it's a non-competitive contract. We discussed it, of course, because we were in a pandemic context. It's also important to note that the contracts that were awarded non-competitively did not attract the attention of the procurement ombudsman or the Auditor General. They were interested in the ones that were awarded competitively.

Third, in order to prepare for another such crisis, we've developed a list of situations to avoid, such as those that occurred during the pandemic. The supply chain was interrupted. We looked at what we need to do if that happens again. We know that the risk is real. We also looked at potential disruptions in terms of the quality and the dollar amount of the contracts. We had to think about preventing corruption and fraud.

Last, we had to look at what we should do when a non-competitive contract is renewed, as was the case with GC Strategies.

I know that, in the future, we'll have measures in place to prevent such situations from happening again. I can assure you that, if another crisis arises while I'm deputy minister, and departments ask me to award contracts non-competitively for professional services in an emergency situation, I'll tell them to forget it.

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

I hope I never see that.

[The Chair, Conservative, John Williamson]

Thank you very much.

Next, we have Ms. Zarrillo, again, for her last questioning period of two and a half minutes, please.

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

Thank you, Mr. Chair. My questions are again for witness Reza.

There was some mention today about a potential lack of training or following of rules. The Professional Institute of the Public Service of Canada has been talking about this for years—how the knowledge base, especially as it relates to IT, is eroding within the public service and there is more and more reliance on outsourcing.

It said:

Government outsourcing, especially outsourcing of IT personnel, is costing Canadians billions of dollars each year. From time to time, outsourcing may be necessary to augment staff compliments or bring in external skills and expertise. But years of unchecked spending on outsourcing has created a shadow public service of consultants operating alongside the government workforce.

I would add that it goes on to say there is gender inequality across Canada's public service. It said:

In IT, lucrative contracts are doled out to a male-dominant industry that has notoriously struggled with gender equity. While at the same time, lower paid and precarious temporary service contracts are disproportionately filled by women.

What I want to ask is how the hollowing out of expertise in the public service has affected the value for Canadian taxpayers.

Also, how do these “gentlemen's agreements”, as I call them in Parliament, dominate how contracts are handed out and doled out within the public service?

[Arianne Reza]

Thank you very much. I'm not crazy about the word “dole”, but we'll come back to that in a moment.

As I have said at previous committees, I look at service delivery to Canadians as a three-legged stool.

There has to be government staffing and HR. Do we have the right complement and training?

There's project management. Especially in the IT space, as you all know, we have many old systems, and transitioning to something new is extremely complex, with risks from cybersecurity and the cloud. We need to make sure that we have the right skill set internally.

We then have the procurement. Where can we augment, where necessary, with professional services to make sure we have that capacity?

I think it's a three-legged stool. We can't bring in the right folks if we don't have the right HR strategy and we're not attracting the right talent. We need to look at our project management, especially in IT, and make sure—in fact, I had this discussion just last week with the unions—that our staff are well trained to avoid having a dependency on professional services.

Since I've been in—

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

My question is really why this move to outsourcing happened and how it is affecting Canadian taxpayers.

[The Chair, Conservative, John Williamson]

I'm afraid, Deputy Minister, you have time for just a brief answer.

[Arianne Reza]

I'm not sure it's a move. I think looking at having procurement in terms of having resources for the efficiency of service delivery and mandate development has always been in our tool kit.

The public service is, right now, at a.... Many FTEs are there. It's finding the right balance, the right skill set, the right training and the right rigour to deliver the service to Canadians.

[The Chair, Conservative, John Williamson]

Thank you very much.

Mr. McCauley, it's your last five minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks, Chair.

AG Hogan, can you update us on the progress of the GC Strategies audit you're doing right now? Maybe that's for Mr. Hayes.

[Andrew Hayes]

Thank you.

We have started that audit. We've signalled to the central agencies that we are doing it. Indeed, I have to acknowledge that we're very happy with the collaboration we're receiving from Public Services and Procurement Canada on this.

At this point, we are identifying how far back we're going to be able to go on the basis of the records that are retained by the government. Of course, there are document retention policies. There might not be things—

[Kelly McCauley, Conservative, Edmonton West, AB]

[Inaudible—Editor] the one retaining those documents, I guess, but....

[Andrew Hayes]

We're looking across the entire government at the records that are retained. Of course, we will expand to Crown corporations. It's a bit more complex to get all of the Crown corporations, because they are individual, so we will be reaching out to them in the near future.

Obviously, we recognize that there is great interest in understanding the universe of contracts awarded to GC Strategies, its principals and any other derivatives, so we're going to try to accelerate that work as much as we can.

[Kelly McCauley, Conservative, Edmonton West, AB]

Do you have a ballpark finish date?

[Andrew Hayes]

We're hoping to have some information that would be valuable to Parliament as soon as possible. We recognize the time pressures that parliamentarians are looking at.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks.

Ms. Reza, as you can probably imagine, I want to get back to this issue of the main contractors being robbed by their subcontractors and, therefore, the taxpayers getting ripped off.

What are the departments saying when they find out they are paying for services that haven't been delivered? What are these general contractors saying?

[Arianne Reza]

I can tell you that PSPC was one of the defrauded departments. I'm very interested to understand, when you're signing an invoice and you're signing off that you've received the goods, is there an issue that it is overestimated? Is there an issue that they're working 10- to 12-hour days?

It's getting to the bottom line and reinforcing, because this is about project management and financial controls. It is not necessarily a procurement issue. It is the technical authority.

[Kelly McCauley, Conservative, Edmonton West, AB]

If there are general contractors who—say you have three of them—are each getting billed eight hours a day by one person, how are they justifying it?

How are they justifying to the departments, and therefore to the taxpayers, that they've been paying out money on their behalf for work that hasn't been done?

[Catherine Poulin]

It's important to mention once again that each prime contractor bills only once for that resource. The resource is being billed for, but it's by another prime contractor to another department.

[Kelly McCauley, Conservative, Edmonton West, AB]

That's right, but somewhere along the line, if one scam artist is billing the taxpayers for 24 hours to three different contractors, we are not getting 24 hours of work.

How is it that the contractor is not aware, and how is it the departments are not aware?

If you look at the work being done right now on, say, Centre Block, if you hire a carpenter to do x amount of work, he can't be billing for 24 hours of work for what is obviously just eight hours.

How is this slipping by not only the contractors, but also the departments?

[Catherine Poulin]

As you mentioned, it's not happening with carpenters. All that fraudulent billing happens in professional services and IT professional services. Again, each department is looking from its own viewpoint, and each prime contractor—