Public Accounts Committee on Dec. 11th, 2025

[Erin O'Gorman]

They would not be involved in—

[William Stevenson, Conservative, Yellowhead, AB]

Is there anything to do with it?

[Erin O'Gorman]

I just want to clarify that they won't necessarily be at the physical border. They may be inland. They may be doing compliance on trade. They're not related to the subjects of these contracts.

[William Stevenson, Conservative, Yellowhead, AB]

Okay. Thank you.

How much time do I have left, Chair?

[The Vice-Chair, Liberal, Jean Yip]

You have 43 seconds.

[William Stevenson, Conservative, Yellowhead, AB]

Oh, that's not enough.

I guess I'll go to you, Mr. Jennings. Again, it's to do with the timing.

I appreciate your acknowledgement of the issues and that you've taken them up. Can you tell me about the timing of the implementation of the recommendations you've done with these measures in place?

[Philip Jennings]

I'd be glad to. I talked about an independent function in quality assurance, one that's independent from the teams that are seeking to procure. That was established in 2024. What was also established that same year, as a response to this audit, was 100% quality assurance. It is dependent on the type of procurement. A number of questions get asked and documentation has to be submitted.

[William Stevenson, Conservative, Yellowhead, AB]

Thank you.

As a CPA, I learned long ago that if documentation isn't there, especially with the CRA, you're guilty until you can prove otherwise. You need to make sure you have all the documentation. That goes back to all the auditing, which is to make sure of that.

I think that's my time. Thank you.

[The Vice-Chair, Liberal, Jean Yip]

Thank you.

I will borrow some of Mr. Osborne's time with one question.

Mr. Jennings, how does the BDC ensure impartiality when selecting suppliers and in the wording of contracts?

[Philip Jennings]

That question would be ideally asked of BDC itself. What I know is that, ultimately, they run their processes fairly and transparently by ensuring that when they seek services from companies, they run competitive processes and select the ones that have the highest merit.

I think that question, honestly, is best asked of BDC.

[The Vice-Chair, Liberal, Jean Yip]

Okay.

Go ahead, Mr. Osborne.

[Tom Osborne, Liberal, Cape Spear, NL]

Thank you, Madam Chair.

I'll go back to a line of questioning from my previous remarks. This is from section 5.8 of the Auditor General's report:

Internal reviews at Crown corporations. Crown corporations are not subject to Treasury Board procurement and internal audit policies. They were therefore not included in the Office of the Comptroller General’s review. Instead, in February 2023, the President of the Treasury Board requested that ministers who were responsible for Crown corporations communicate information to the heads of Crown corporations to encourage them to undertake, in the same spirit, [those] reviews....

This is from section 5.13 of the Auditor General's report:

Since not all Crown corporations conducted internal audits or reviews and were not subject to review by the Office of the Procurement Ombud, we encourage Crown corporations to examine the recommendations in these various reports and our findings in this report to identify opportunities to strengthen their policies and procedures....

For three of the agencies, I'm somewhat satisfied that they are looking to put in place similar recommendations that Treasury Board had put in place.

I will say, Mr. Roy, before I ask my question, that I think Canadians who are watching this program should know that your agency does a tremendous job in return on investment. I believe it's over 8%. You are doing an incredibly good job of investing on behalf of pensioners and federal public servants, but I found your response a little dismissive. The President of the Treasury Board encouraged you, in the same spirit, to review the recommendations from previous reviews. Your response was that, well, you're not subject to their policies, so you didn't.

The Auditor General made the same encouragement. Five of 10 agencies conducted the review—yours did not—on the encouragement of the President of the Treasury Board. The Auditor General made the same encouragement, and you did so. What's the difference?

[Alexandre Roy]

I'm correcting what I said before.

As a non-agent Crown corporation, PSP is not necessarily subject to the recommendations. However, given that we want to apply the highest standards, we drew inspiration from the Auditor General's recommendations to increase our ability to fulfill our mandate. Our procurement process, which was already extremely robust, has thus been greatly improved by the Auditor General of Canada's recommendations.

[Andrew Hayes]

If I might add something, I would like to acknowledge that PSP did conduct an internal audit themselves, and that was, I think, consistent with what the President of the Treasury Board asked. We recommended—and you pointed exactly to the paragraph in our report—that there be opportunities to learn from this report and from other reports, and we encourage every organization to capitalize on those opportunities.

[The Vice-Chair, Liberal, Jean Yip]

You have 16 seconds.

[Tom Osborne, Liberal, Cape Spear, NL]

You can carry on to the next person.

[The Vice-Chair, Liberal, Jean Yip]

Okay.

Monsieur Lemire, go ahead for two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

Mr. Hayes, the Office of the Auditor General has been conducting performance audits in a number of areas for many years, but I get the impression that IT contracts are a recurring theme. We are seeing a very significant increase in costs compared to the initial estimates every time. We keep seeing the same thing, whether we are talking about the CBSA assessment and revenue management system, the benefits delivery modernization program, ArriveCAN or McKinsey.

I really feel as though IT is like a buffet. In the end, individuals are the ones who pay the price and get shortchanged. The Expos left for a lot less money than what the government is investing in the IT system.

How can we, as legislators, address this? Is there something that we can do?

[Andrew Hayes]

Thank you.

The point raised by the deputy minister about the accuracy of estimates is very important. Obviously, when projects begin, we do not have all of the right information to estimate their total cost. However, the government is now trying to improve its cost estimates, and I believe that Treasury Board is the one working on that project. In our audits and reports to Parliament, we have talked a lot about the importance of looking at costs. Here, in this report, we talk about the importance of looking at costs before awarding a contract.

The important message is that Canadians care about how much things cost. We need to look at all of the information that is available when we start a project to estimate the cost of it as accurately as possible.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

We are still seeing some disturbing things. GC Strategies had only two employees, and PSPC awarded one of the biggest contracts, a $400‑million contract, to Adirondack Information Management, a four-person company that claimed to be indigenous.

How can we ensure that we are not giving big contracts to companies that are obviously unable to fulfill them and that use subcontractors that we have no control over?

[The Vice-Chair, Liberal, Jean Yip]

Give a short answer please.

[Andrew Hayes]

We made important recommendations in other reports regarding the existing controls for procurement policies. They exist but public servants need to follow these policies.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

[The Vice-Chair, Liberal, Jean Yip]

Thank you.

Now we will go to Ms. Kusie for five minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Chair.

Mr. Roy, I'm struck by the sheer number of non-competitive contracts your organization engaged McKinsey in. There were 18 in total, with a combined value of nearly $15 million.

I recognize that for 11 of these contracts, the Auditor General found that a competitive process was not required under your policies. Can you please explain why your policies allowed for that?