Public Accounts Committee on Dec. 2nd, 2024

[Karen Hogan]

It should not be how business is done in the public service.

[The Chair, Conservative, John Williamson]

Mr. Lawrence, you have just over a minute, please.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you.

Just to put this in layman's terms, if we count a subsidiary, a wholly owned subsidiary, being controlled by the same institution or effectively the same institution, we had Accenture contracting with Accenture for whatever they defined as the amount of money they'd get for whatever work they would do with taxpayers' dollars. Accenture was effectively contracting with Accenture.

[Karen Hogan]

EDC asked Accenture to run a quasi-competitive process, where a few vendors were able to provide a bid to develop loan accounting software. One of those was a wholly owned subsidiary of Accenture. In the end, the recommendation was made to Export Development Canada that the wholly owned subsidiary should receive the contract. Ultimately, what happened was that EDC signed a contract with Accenture in order to deliver this loan accounting software.

It is that kind of lack of managing a conflict of interest that I would have expected EDC to do better on. There are clear rules and guidance in the federal public service, and they should have removed either Accenture or the wholly owned subsidiary from the process.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much, Mr. Lawrence.

Ms. Khalid, you'll take us out to the end.

You'll have the floor for five minutes, please.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Thank you, Mr. Chair,

Thank you, Ms. Hogan and all of the officials, for being here today and for your reports.

I'll start by continuing with what my colleagues have asked.

What's the process, Ms. Hogan, for competitive contracts within the public service and how long does it take?

[Karen Hogan]

There's a complicated process for competitive contracts in the public service. I think the important thing to highlight here, however, is that EDC doesn't follow the government's procurement rules. EDC has its own set of rules.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

It's a complicated process, and during COVID, there was an urgency to ensure that small businesses, especially those that were taking the CEBA loan, for example, would have delivery of funds as soon as possible, so that they wouldn't renege on their cash overtures and their obligations as well.

Here is my question to you, then. What is the public service's capacity in a really dire situation, which small businesses were facing during COVID-19, to be able to deliver the programs as quickly as they were able to do? In your report, you mentioned that the majority of the money has been reimbursed to the government. What is the process, then? Do we need to improve the public service contracting at this point?

[Karen Hogan]

Both the public service and the Crown corporation, in this case, have exceptions to the competitive process in times of emergency. That's what was used to justify the non-competitive contracts at the beginning. We saw that in many situations. It's a very reasonable approach to ensure quick service to Canadians.

What I would have expected is that, as this program was carried out, steps would be taken to avoid that continued reliance. Currently, with the last contract that was issued, the government is bound to extend it until 2028 with the loan accounting software.

In other reports, I've criticized that lack of recognition of when it's time to bring things back into the public service, and it's repeated here. That overreliance shouldn't happen.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

With respect to the CEBA loans, there have been measures taken by EDC and by the government to bring back the money now, over this past number of years. COVID lasted for about three years, and the impact on small businesses, I would say, was about five years. In your report, you talk about the value for the money. Well, what about the context in that value for money? How do you judge the context in terms of the dollars spent versus the impacts it had on Canadians?

[Karen Hogan]

That was a question we asked ourselves at the beginning. If you look at all the administrative fees, they're low compared to the total dollar values of loans that were disbursed. Is that good value for money? I'm telling you that the mismanagement of those contracts leads me to conclude that the government compromised that value for money. It could have been done for less in a more efficient way.

You're right in that 91% of businesses that received the funds were eligible, but the lack of recognition at the beginning that this was a loan program, and that you would have to deal with repayments and potentially deal with collecting on defaulted loans, is resulting in more costs. That's why many of our recommendations are about improving the contract terms and conditions with Accenture as they go forward, or any other contracts issue—

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

I take exception to that because 91% of the businesses were eligible for the CEBA loans, yet this report, and what the opposition parties are doing, is taking the 9% and really highlighting what went wrong when we know that 91% of it went right. Ninety-one per cent of businesses were able to take advantage of this program, yet here we are, sitting and talking about the 9% that were not eligible and took funding.

We know that the majority of the funding has been returned to the government and that this program was executed in a really quick manner. We're talking about providing support, a lifeline, now, to small businesses, without thinking about how efficient we can be. In this instance, it's a 9% inefficiency, I would say. Would you agree?

[Karen Hogan]

I'd like to highlight that I think our report is balanced, in that it highlights the good and also what needs to be improved, regardless of the conversations that happen about our report.

We go to great lengths to remind Canadians of the good work that the public service does, and then we highlight where it can do better. Here, EDC did not use some basic controls for managing its contracts, and it could have reduced the administrative fees it has been paying to deliver this program.

Since those costs are so low, I would expect that it wouldn't disagree with the recommendation to go collect, or at least to identify who is ineligible in the testing we did and to confirm whether collection is needed. It's a low cost. You can go figure that out.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Do you think the majority of Canadians benefited from this program?

[The Chair, Conservative, John Williamson]

Ms. Khalid, I'll allow the question, but keep it brief, please.

[Karen Hogan]

I think it's really difficult for us to separate whether the Canada emergency business account was the thing that really helped small businesses versus rent relief or the wage subsidy. I think it's clear that many businesses needed this to cover non-deferrable expenses. Whether it, in itself, was the sole reason that businesses survived or not, we could not determine.

[The Chair, Conservative, John Williamson]

Thank very much. That is the time.

Before I adjourn, I want to make a comment on the public accounts.

It seems that the government has put you in a bit of, if not a tough spot, Ms. Hogan, a speedy spot in that for as long as I've chaired this committee, parliamentarians have wanted these reports on public accounts sooner rather than later.

I understand that you're going to get them today. Parliament will rise two weeks from tomorrow. Generally, two weeks is your turnaround time. I understand that you're going to be working a little faster behind the scenes, and I applaud you for that. However, I'd also ask that you to not make any problems your problems and, should you see something in public accounts that you are concerned about, that you send it back to the government. I always get nervous when deadlines are upon government, that sometimes corners are cut. I'm sure that will not happen in your department, but we look forward to your review and to those documents as soon as possible.

On that note, I'll adjourn the meeting, and we'll see you all back here very soon.

Thank you.