OGGO Committee Meeting
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Standing Committee on Government Operations and Estimates
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EVIDENCE
Wednesday, May 1, 2024
[Recorded by Electronic Apparatus]
[English]
I call this meeting to order. Welcome to meeting number 119 of the House of Commons Standing Committee on Government Operations and Estimates, known, of course, as the mighty OGGO.
Pursuant to Standing Order 108(3)(c) and the motion adopted by the committee on Wednesday, January 18, 2023, the committee resumes its study of federal government consulting contracts awarded to McKinsey & Company.
Before we begin, I will remind all members and other participants in the room of the following important preventative measures to protect our interpreters.
To prevent disruptive and potentially harmful feedback incidents that can cause injuries, all in-person participants are reminded to keep their earpieces away from the microphones at all times, as indicated. As per the note from the Speaker to members on Monday, April 29, the following measures are in force.
All earpieces have been replaced by a model that greatly reduces the probability of audio feedback. The new earpieces are black. The old ones are gray. If you have a gray one, please remove it immediately. By default, all unused earpieces are unplugged at the start of every meeting, so you'll need to plug in, please.
When you're not using your earpiece, please place it face down on the middle of the sticker to your right. Consult the cards on the table for guidelines to prevent audio feedback incidents. The room layout, you've noticed, has been changed to increase the distance between microphones to reduce the chance of feedback from ambient earpieces.
These measures are in place so that we can conduct our business without interruption and to protect the health and safety of our participants, mostly the interpreters.
Thanks, everyone, for your co-operation.
We will have a vote in about 45 minutes. If I can have unanimous consent, we will continue the meeting up until 10 minutes before the vote starts.
Some hon. members: Agreed.
The Chair: That's wonderful. At the end of the meeting, the last 20 minutes or so, I need some time for committee business to go over budgets and some other issues that I need to update the committee on.
We have some officials from PSPC back with us today.
Ms. Reza, welcome back. I understand that you have an opening statement for us. Please go ahead for five minutes.
Before I begin, I would like to acknowledge that we are gathered today on the traditional, unceded territory of the Algonquin nation.
Joining me today are Dominic Laporte, assistant deputy minister for procurement; Mollie Royds, associate assistant deputy minister for procurement; and Catherine Poulin, assistant deputy minister for departmental oversight.
[Translation]
I want to start by thanking the committee for this opportunity to appear to discuss the procurement ombud report on contracts awarded to McKinsey.
It is important to me as the deputy minister with a key responsibility for procurement to be given the opportunity to comment.
I would also like to thank—
[English]
I have a point of order, Mr. Chair.
I'm sorry, but this device is not working for me. I need someone on the technical side to bring me one.
Thank you.
[Translation]
It is important to me as the deputy minister with a key responsibility for procurement to be given the opportunity to comment.
I would also like to sincerely thank the procurement ombud and his team for their review of the contracts awarded to McKinsey.
We have carefully considered the entire report—not only the recommendations where Public Service and Procurement Canada, or PSPC, is implicated directly, but all recommendations to consider how we can take a leadership role to further strengthen procurement practices.
[English]
By way of context setting, in the midst of increasing public scrutiny and discourse related to procurement practices, the Prime Minister tasked the President of the Treasury Board and the Minister of Public Services and Procurement to undertake a review of contracts awarded to McKinsey and examine if contracting processes complied with Treasury Board policy and departmental internal control frameworks. Shortly thereafter, in February 2023, the Minister of Public Services and Procurement made a further request that the procurement ombud conduct a review of federal contracts awarded to McKinsey.
Consistent with the result of the first review, the procurement ombud found no instances of political interference, no wrongdoing and no fraud. I believe this is important to the committee and to the procurement workforce, who take their stewardship and integrity responsibilities seriously.
The ombud's report looked at 32 contracts with McKinsey. PSPC was the contracting authority responsible for 23. As a result of this review, the ombud made three recommendations directed to PSPC. The department accepts and welcomes the recommendations and is implementing an action plan to further strengthen procurement processes, specifically as it relates to better documentation, among others.
For example, one area of this review relates to the verification of security clearances for resources. I would like to reassure this committee that all the McKinsey resources had the required security level to perform work and to access sensitive information and assets. That being said, the OPO report identifies documentation shortcomings, for example, noting that the security clearance records should also be consistently included in procurement files.
As a result of the report, I've asked security and procurement officials to take a step back to reconsider the existing rationale as to why the security clearance and contract records need to be kept in two physical places, and if this is still relevant as we move to e-procurement.
Turning to examine the procurement instruments that were used for contract award, PSPC took steps in 2021 to establish a national master standing offer as an efficient approach to procure proprietary McKinsey benchmarking services that were in demand from client departments. In total, PSPC issued 19 contracts under the standing offer, which has now expired. The ombud's observations on the standing offer are actively informing the next iteration of instruments related to procuring benchmarking services.
[Translation]
Separate from the findings related to the standing offer, the ombud concluded that—taken collectively—his observations led him to believe there were instances that the procurement processes created a “strong perception of favouritism towards McKinsey”. PSPC has no direct evidence of this. We have responded to the procurement ombud, noting some assumptions and interpretations differ from those made by PSPC. The ombud acknowledged this by including references to our views in his report, which he referenced in his testimony to this committee earlier this week.
In closing, I want to be clear with the committee that as the DM and as senior officials responsible for the procurement function in PSPC, we take to heart the observations and recommendations made by the ombud. We have a responsibility to better understand and address his findings, especially as they relate to ensuring better record keeping and transparency to advance both the process and controls related to procurement.
[English]
Thank you very much, Mr. Chair.
Through you to our witnesses, I will be asking questions of Ms. Reza, but if others have the answers, certainly they should feel free to pass those on.
Earlier this year, reports from the Auditor General and the procurement ombudsman on the arrive scam debacle raised serious concerns about contracting, particularly in the sole-sourcing of several contracts.
Today, you're here appearing on the heels of yet another report from the procurement ombud, which raises serious concerns in regard to contracting in relation to McKinsey.
Of deep concern is the OPO's comments regarding the national master standing offer, or NMSO, and that none of the call-ups had any justification for sole-sourcing, yet your department approved them all, shovelling out tens of millions of dollars to this company. Who signed off on these call-ups?
Mr. Chair, I did not ask for context. I asked who signed off on these call-ups.
Who was responsible for signing off?
The call-ups were mostly signed off at the procurement officer level, with some at the manager level. We can provide the breakdown of the individual....
Yes, I would like the names. If you could provide that to the committee, I would appreciate that.
When the NMSO for McKinsey's benchmarking services was established, who at PSPC signed off on that?
I believe it was signed off at the ADM level of Procurement. We'll confirm again the names since people have moved between jobs. It was in 2021.
Do you know, Mollie?
The national master standing offer was established as per our normal protocol for all national master standing offers. A commodity lead was responsible for the approval. In the case of professional services, it was at the executive 2 level. That was the level that approved this national master standing offer.
To go back to the earlier question, there was a sole-source justification in place for the national master standing offer at the time, an integrity check, as well as price support to ensure that the price was fair and reasonable.
We're happy to provide the name.
I can tell you the level. It was an executive, a senior director in our procurement office.
It was in 2021, which was before I was there.
I believe the individual is no longer employed in the department, but I'd be happy to provide the name.
Thank you very much.
The procurement ombud also found in his review of the McKinsey contracts that PSPC failed to provide a statement of work on the vast majority of call-ups against the standing offer. The ombud said in his report that he could not determine to what extent McKinsey was allowed to define the contract requirements for these departments.
This is exactly the type of thing that happened with GC Strategies in the arrive scam contracts, with your department allowing a private contractor to determine their own scope of work. Why is your department making it a regular practice to allow companies to determine the terms of government contracts they will be awarded?
Just to confirm, when a national master standing offer is established for a unique product, such as the benchmarking that McKinsey provided, the statement of work associated with the establishment of that tool has traditionally been the master statement of work that's been used to pull call-ups from underneath it. That was the case from 1995 to about 2021 for all national standing offers of this nature.
In 2021, we took a step back and we decided to add increased scrutiny and documentation around support. By 2022 and 2023, we had added further requirements around the statements of work. The traditional historical piece was to use the statement of work associated with the establishment of the procurement tool, given that it was an individual, unique proprietary service provided to Canada.
I am simply going by what the procurement ombud reported on. He questioned the fairness and the transparency with respect to the lack of documentation that was available to determine whether or not McKinsey defined its own scope of work. We'll leave that there. I believe there are questions around fairness and transparency. Those are the procurement ombud's words, not mine.
He also found multiple cases of departments changing procurement strategies to allow for McKinsey's participation. He also found that departments avoided mandatory methods of supply in order to direct contracts to McKinsey. Then he found that departments failed to establish cost estimates before discussions with McKinsey. He found that bids were inappropriately re-evaluated, resulting in McKinsey being the only compliant bidder and being awarded the contract. All of this was under the watchful eye of PSPC.
I believe this is a colossal failure of your department's core purpose. What value does your department offer aside from the rubber-stamping of corrupt procurement practices?
I'm afraid I have to interrupt because you are past your time. Perhaps we'll get to it in the next round or have it provided in writing.
I will remind everyone—and I know you've been with us before—that our committee has passed a motion that all requests for information are to be returned to us within three weeks.
Mr. Kusmierczyk, I believe you're up.
Thank you, Chair.
Ms. Reza, in your response, you referred to the national master standing offer and you referenced the years 1995 to 2021. I didn't quite understand the point that you were making. Can you just repeat that and take your time to clarify that?
I was trying to build the context that within procurement we use different methods of supply. There are many of them, and they're competing, and some of them have been long-standing. Some started in 1995. A lot were established in 2005, and the ones that we hear about frequently around information services, like TBIPS and SBIPS, which look at solutions, came along later.
What I was trying to make clear is that for the last 20 years, these have been methods of supply that we looked to modernize and build on, and they have existed in terms of how we deliver procurement. We're constantly looking at how to improve them, but these are not one-offs. They were not created for any specific supplier.
In the case of benchmarking, which is an area the government needs as part of their independent review and their quality assurance, we have four or five vendors that have had similar arrangements. This has all been publicly and transparently posted on government websites for many years. It's something that is not unique; it is well understood.
Can you explain to Canadians the value that benchmarking brings to the work of government? I want to start from first principles here. What's the value of benchmarking that companies like McKinsey and others provide?
Really, the client departments will be best placed to talk about the value that they bring. At a high level, benchmarking against global standards and practices using proprietary datasets gives the government a sense of where they are on their transformation projects and on citizen delivery. It is a global overview. It's actually a requirement of Treasury Board policies to have that independent kind of review function, which can be achieved through benchmarking contracts, as we described, or through independent audit.
What value does benchmarking provide to the government?
Is it a matter of efficiency and being able to more efficiently deliver government programs? Is it about effectiveness? Is it all of the above?
It is all of the above in the sense that benchmarking gives you a gold standard to aim for, and it understands whether or not gates can proceed in big IT transformation projects.
I know that PSPC, as a client department, actually competed some McKinsey tools. They came and looked at our pay processing and were able to benchmark their training and introduce certain efficiencies that were pretty significant for the pay function of the government.
When I had a chance to question the procurement ombudsman here this week, I asked him flat out if he had found any instances of fraud, and his answer was an unequivocal no.
I asked the procurement ombudsman if there was any evidence of corruption in his review, and his answer was an unequivocal no.
Then I asked him if he found in his analysis and investigation any examples of political interference, and his response was an unequivocal no.
What he did find, as you had mentioned, was a strong perception of favouritism. He was referring to the practice of changing procurement strategies midstream. The ombudsman criticized departments for changing requirements about whether they required a task-based contract or a solution-based contract.
I wanted to ask if you can explain the differences between these two types of contracts, and then speak to that criticism of the perception of favouritism that the ombudsman had found.
Can you help us understand both of those things?
Let me start, and then I'll turn to my colleague to add some remarks.
I read that with grave concern. It's in the report, and certainly we wanted to work with the ombudsman to unpack it.
When you think of procurement strategies that change, sometimes a client comes and they don't know the procurement world. They don't know what the correct or best method of supply is. At the same time, we're trying to change how we do procurement. We want to move away from task-based procurement, where you're asking someone to produce one, two and three tasks, to solutions-based procurement, where they're providing the government with a turnkey solution: this is our opportunity, and this is our problem.
There are always lots of moving pieces. Each individual procurement has a procurement plan that gets locked in when they go into the solicitation. Until then, things are moving back and forth, and they are fluid. It's being shaped to provide the best output for Canadians.
I'm going to stop here and see if Dominic—
I'm so sorry. I'm glad you're stopping there, because that is right at our six minutes. We'll get a chance to come back.
Mrs. Vignola, please go ahead.
[Translation]
Thank you very much, Mr. Chair.
Ms. Reza, Ms. Royds, Mr. Laporte and Ms. Poulin, thank you for joining us today.
In response to the procurement ombud's report, PSPC stated in paragraph 118 that there were legitimate reasons for taking the approach it did when it awarded the non-competitive National Master Standing Offer, or NMSO, and using those reasons as the impetus for all subsequent call ups. This includes non-competitive call ups.
In your presentation, you said you welcomed the ombud's recommendations. However, the implication is that he was a bit out to lunch, if I can put it that way. That's my interpretation.
What are his reasons? How do you explain the fact that McKinsey & Company was awarded a non-competitive NMSO? The company has a trademark, data, and so on. We've heard it all before.
As far as data is concerned, the last time I checked, Canada still has a countrywide data collection system and specialists, paid for by taxpayers' money.
So why is McKinsey & Company, in particular, getting preferential treatment?
Thank you for the question.
I'll try to give you a two-part answer. I'll start and then I'll ask my colleagues to respond.
For the first part, it's important to understand that McKinsey & Company was one of the five suppliers. To our minds, it was transparent. It wasn't just McKinsey & Company.
That was a decision we made in the context of benchmarking, which allowed us to use that method. At the contract stage, if the situation is unique, regulations allow for the establishment and use a special procurement method.
[English]
In a way, it's going to make it helpful to the suppliers and the clients to move expeditiously. If you know there's only one that can compete, you go there.
[Translation]
For the second part, I'll ask my colleague Mr. Laporte to take over.
In hindsight, it's often so easy to see everything in black and white. I have to say, however, that this wasn't the case here. In fact, it involved data that was only available through McKinsey & Company.
As Ms. Reza mentioned, agreements were reached with four other suppliers. So it was transparent, the process was known to everyone. I don't think our procurement officers came to work in the morning thinking they were going to favour one company over another. It was indeed a transparent process.
The supporting documents were linked to the master tool. Justification was always established using the procurement tool. According to the ombud, we should have had a unique justification each time a client wanted to use it. We thought about it and decided that perhaps we should adopt that method. But before that, the standard was to use the justification that had been prepared once the tool was in place.
[English]
There was no expectation of individual justification.
[Translation]
Why not provide justification at each step in a contract, precisely in order to demonstrate transparency and ensure that there isn't even the appearance of collusion, backroom dealings or favouritism?
Why weren't those justifications included from the start?
The ombud noted that point. We can improve our best practices in documentation. As the new assistant deputy minister responsible for government contracting, that is very important to me. A new position has therefore been created: chief, contract quality and records compliance. That individual will ensure that these steps are followed in all files.
Every critical step in a contract is documented. To that end, we use tools and procedures. Those measures will serve to comply with the ombud's recommendations.
I'd like to add a comment, if I may.
We also need to determine the key data and milestones. The Canadian government awards 400,000 contracts each year, worth $34 million.
I'd like everything to be in the system and to be transparent, but we need to work together, with the ombud and the Auditor General, to decide what the key documents and milestones are.
In your speech, you mentioned an action plan. Would it be possible to provide it to the committee as soon as possible?
[English]
Thank you, Mr. Chair, and thank you to our witnesses.
This is obviously a complex matter. At the same time, when you read through the ombudsman's report, it's pretty scathing about the procurement process. You've accepted the findings of the ombudsman. What I'd like to get at is why those shortcomings exist.
For instance, why is the lack of documentation occurring? Is it sloppiness? Is it because there's a lack of respect for the stated requirements that are laid out in the procurement process? Is there something more nefarious going on? What's the reason for the shortcomings?
I think we're all going to be fighting for response time.
I'll tell you that there is no one single reason. We'll unpack it in many ways.
One thing that we saw in the report was there are no conflict of interest declarations on some of the reports. I asked, why not? We went back to the supply manual that provides the direction to procurement officers and clients. A COI doesn't have to be on file if you're a public servant because your code of conduct manages it. What is defined as a lack of documentation in the report is accurate, but we haven't established a baseline of requiring it in the first place.
It's the same with the security requirements. I saw that the security requirements weren't there. Well, they were there, but they weren't in the two or three places they were supposed to be.
We need to rationalize the lack of documentation. We need to be clear on what's causing it and we need to capture—
I'm not quite sure I understand the nuance behind that point.
They were there, but they weren't where they were supposed to be.
Doesn't that mean they weren't there?
If I may add to that, over time there was a different way to store information on the record. It could have been by email. It could have been stored on some local drive.
I have to say that it's not because something was not there. I do appreciate that we don't have the evidence to show that it was there.
This is where we need to leverage the electronic procurement solution that will make sure that we document every step and maintain a central repository of all information. Madam Reza was mentioning the numbers of procurement that we handle on a yearly basis, going back in time.
We need to improve on the tool and this is exactly what we've been doing over the last five years.
I'll just add to that in terms of the use of these methods of supply. We use them for the flexibility they provide to the system and for us to be able to leverage them.
I just wanted to add that, as of 2023, we did require sole-source justifications and statements of work that were clearly defined requirements for all of the benchmarking national master standing offers until they expired. Going forward in the future, we'll be procuring this type of capacity through a competitive process.
Did the national master standing offer that we're talking about for McKinsey pre-exist that commitment in 2023 to start documenting everything more thoroughly?
That's correct. It was consistent with the approach that we were taking in the business line at the time, but we have adjusted that in light of the observations that have been made. We noted the requirement to have additional documentation.
In your response to the ombudsman's report, you pushed back on some of the assumptions and characterizations of the lack of rationale for the national master standing offer decision. You say that “rationale for making the decision cannot be assumed in the report without evidence”.
My read is that the ombudsman didn't take issue with the rationale. He was taking issue with the lack of evidence. The question is, where's the evidence? Why did you push back on that finding, which is that the evidence wasn't provided? It seems like you're pushing back on something the ombudsman didn't actually say, which is that the rationale was incorrect. What the ombudsman was saying was there was no rationale. It's not transparent why that particular procurement process was chosen.
Quickly going back, lack of documentation haunts us, and we're fixing it. I don't enjoy coming to committee to talk about lack of documentation and any inferences it makes, so that has to be shut down.
With respect to our response to the procurement ombudsman, we've accepted the findings. We've accepted recommendations.
On the issue of rationalization, it is because, from our assessment, when we set up the national master standing offer, we did all the price verification, the rationale and the evidence. Adding on that each call-up had to have this individual justification has not been in our line of sight for the last 20 years. It is now.
In terms of getting back to my original question about the reason for the shortcomings, is it because the requirements were not understood or because they weren't clearly enough laid out?
I'm a layperson when it comes to this stuff. When I read the ombudsman's report, he says that there are clearly laid out requirements for documentation, and those requirements were not met. Either they were not met because they were missed, because they weren't understood or because the people filling out the documentation didn't want to. I'm trying to understand why they weren't there.
I don't think there was an articulation of a requirement for the rationalization and justification for individual call-ups.
Thank you, Chair.
A previous PSPC minister personally signed a $5.7-million contract, even though your department agreed that ESDC had not met the threshold for a sole-source contract with McKinsey.
Why did this minister personally sign this contract when your department had already challenged this contract?
By way of quick context setting, Treasury Board policy on management and procurement sets out the financial delegation authority specifically related to each department and each minister. For us, it's $5.7 million.
Each department then sets up a delegation tool that's posted that tells you—and you've often asked us—what level of authority is required to enter in a contract. What's your level? Who signed it? Anything over $4.5 million needed to go to the minister.
To do that, we—Mollie and I have a role in this—took on additional requirements to ask the client to justify the contract. The initial set of justifications was based on the seven questions that are a Treasury Board template. The procurement officer went back, received additional information, was satisfied with the justification provided by ESDC, papered the file and provided a recommendation to Mollie, and that turned into a recommendation for the minister to use her authority to enter into the contract.
There's a pretty significant paper trail. I saw, as you did, the commentary in the report, but there was additional information provided as well as a robust rationale.
Could you please table that paperwork with the committee? Thank you.
Did you receive any direction from any procurement minister, before or after this contract, on a procurement strategy with McKinsey?
Has there been any indication of a minister of any other department or agency directing officials to specifically contract with McKinsey?
I'm going to go back to the missing documents.
It seems to be a trend that documents will go missing in numerous procurement procedures that we review here at OGGO. As I mentioned in the previous meeting, this has been a trend in numerous reports of numerous parliamentary officers.
The procurement ombudsman said on Monday that this is a long-standing issue that we've seen in many of our procurement practice reviews. The one distinction I would note specific to McKinsey is the timing of these documentation lapses.
Traditionally we saw a lack of documentation across the board, but here we sometimes see it at discrete times within a process where we would have documentation present for certain steps of the process and then, at seminal moments, there would be a lack of documentation. That's the part that's concerning.
Why do you think these departments are choosing not to document at times that seem inconvenient for them to document?
I would note that when you look at the universe of contracts that were reviewed in this review, there were 32. Of those, 19 were part of the national master standing offer, so it's a very different set of documentation requirements that we're discussing. The remaining ones—not all of them, but the vast majority—were of low contract value, under $40,000. I think as the paperwork went back and forth, there was probably not enough hygiene and rigour around making sure that it was well collated.
Another issue when it comes to documentation, and some of the frustration, perhaps, of the committee, or that I feel from the committee, is that when you do an evaluation of a bid, half of the bid documentation goes to a department that does the technical evaluation. There's a whole bunch of bid methodology material prepared there. PSPC keeps the financial envelopes. They're kind of independent keys. Then we have to put the file back together and make sure the documentation is well described.
I don't know if you have anything else.
Thank you so much. I will leave it there. If he's concerned, I'm concerned.
In a $2.9-million competitive contract for ISED, two bids were received. McKinsey was not chosen because it did not have the best price and financial score in comparison to its technical capabilities. After this review, ISED asked to re-evaluate and choose McKinsey instead despite the completion of this evaluation. In response, ISED stated they would be happy to delete the financial evaluation email to hide the fact that they were requesting a change. McKinsey shockingly then received this contract.
Do you condone the deletion of emails in order to favour certain companies in the procurement process?
Absolutely not. PSPC was not involved in the procurement.
Further, I picked up the phone and spoke to the ISED deputy. He assured me that training is in place. It was really inexperience and error, and it was noted.
Mr. Bains, before you start, the bells are ringing. As everyone is aware, we have 27 minutes. We'll all vote electronically—
Okay. We'll suspend with 10 minutes to go. Is that fine for you?
Mrs. Julie Vignola: Yes.
The Chair: Wonderful.
Mr. Bains, go ahead, sir.
Thank you, Mr. Chair.
Thank you to our department officials for joining us again today.
Elected officials come and go. I think I've heard from you that this procurement process goes back to 1995. We've heard from other witnesses in this committee about it going back to 2003, and the procurement process has not changed. My concern is that government officials have often been around for decades and they have built relationships with people. There are subcontractors and contractors. I know that concern has been raised by some of our friends across the way as well about the potential for collusion and favouritism.
I think you mentioned training that's being done on the standards for procurement and some that changes that are being made. What is PSPC doing to address the recurring issue of documentation missing from the files? I think we even heard from the minister that a new AI process might be implemented. Is that something you can give us some knowledge around?
It goes back a little bit to an earlier question about the implementation plan for this and other audits, and what we heard in ArriveCAN, to avoid the documentation challenges we face.
It goes back to training. We've put a new quality assurance officer in place to be able to review the material. We have been talking about e-procurement. We have been identifying what actually is part of a procurement strategy in terms of documentation. We've been looking at our own processes and looking to see how we can actually amp it up so that we have more clarity and transparency around it, including using the Treasury Board open portal and the training associated with it.
If you will permit me, I will pause here and turn to my colleague.
Thank you.
DM Reza did touch on most of the elements, but also, one thing we did this week was to send.... First of all, we had a town hall with all our staff. We did make sure...because the last thing I want is for the procurement ombudsman to draw a negative inference from the lack of information on record. I think this is very unfortunate. It basically casts doubt as to the motivation of our employees. They don't want that. I think there's a clear desire to change.
We've put in something also as part of the PMAs, which are basically the management agreements of all the PGs, including me as the DG or director, to really make sure that this is a top priority. Employees, including me, will be measured against that. From now on, we'll be insisting—we've learned also from ArriveCAN—that there are some checklists there that were not there before. Coupled with that, we also have the electronic procurement solution; 98% of our procurement is now covered by that for PSPC.
So a lot of action is being taken on that front. I have to say that this is one of my key missions. A year from now, the last thing we want is to be there—explaining to this committee that there are some shortfalls in the documentation.
On the electronic procurement process, it's an AI process.
What measures are being taken so everybody understands the standards and procedures that are needed to train on how that works?
The EPS is basically a cloud-based solution. The goal is to have all the key elements. When the bid is published, bidders are going to be able to bid using that platform. All the key documents, all the interaction with contracting authorities, are no longer done by email.
In the past, for example, you used to send an email to the contracting authority, and this email maybe would get lost. Now we have a central repository of all the key information, all the interactions. I'm very hopeful that in the future we're going to be able to leverage that platform so all the mandatory requirements are going to be there for bidders. The financial evaluation is going to be there. There is still some investment training needed, but we have close to $9 billion of procurement and 8,700 contracts on the platform.
I think we should be clear it's not AI. It's a cloud-based system.
We've been speaking a lot about documentation and record-keeping and the importance of it. You used a word earlier that I recoiled at: “collusion”. Here at PSPC and across the Government of Canada, we look very carefully at our integrity and our stewardship, and we have a lot of things in place around collusion.
If you have a moment, Catherine—
I'm afraid we don't have a moment. We're running out of time. Thanks.
We'll just finish up. I'm combining the next two rounds for the NDP and the Bloc. We'll do a five-minute round, and then you won't have anything next round.
Go ahead, Mrs. Vignola.
[Translation]
Thank you, Mr. Chair.
Ms. Reza, as to the procurement ombud's recommendation regarding the verification of security requirements, PSPC indicates, in appendix I, that it implemented a new professional services procurement file completion checklist last February and that a communiqué was sent to procurement personnel in December 2023 reminding them of the security policy requirements.
Have those measures actually improved compliance with security policy requirements?
How do you assess their effectiveness or ineffectiveness?
How will you implement an action plan with objectives to ensure that the steps are followed?
The interesting thing is that this is a very complex issue. We manage 800,000 security clearances, including for consultants. Every year, we have to do, I believe, 100,000 security reviews. That's a lot for one department.
We also need to ensure that security-related information is properly included in the procurement records. So there are many elements that have to be updated.
Ms. Poulin can give you more details.
Thank you very much for the question.
First, it's important to distinguish between documentation prepared for employee security clearances and documentation for departmental security clearances.
In his report, the ombud mentioned two areas where there was insufficient documentation. The first was that employee security clearances weren't documented. It should be noted that the contract security program includes a system for checking whether people have received the correct security clearance. This can be verified by a phone call or email, but the procurement file is missing evidence of that verification.
The second deficiency involved contract security. It's important to return the contract—
I'm sorry to interrupt you. I think my question was misunderstood.
PSPC indicated, in appendix I, that it had implemented a new checklist and sent a communiqué to staff reminding them of the security policy requirements. That's what you've done.
My question is this: How do you ensure that all aspects of that security policy have indeed been fully implemented?
I'm not talking about what the ombud said. I'm putting the monkey on your back. How do you ensure that employees follow the rules strictly?
Thank you very much for the question.
It's not a matter of security but rather of documentation. As my colleague said earlier, we want procurement files to include a checklist indicating that a clearance was completed and that it has been recorded in the contract security program system.
My colleague explained the measures he was going to put in place, the information he provided to employees and the checks that would be done in each file. The goal is to ensure that there has been a call or email confirming that the security requirements have been met.
Will these checks result in a report or will a parliamentary committee ultimately have to examine this in depth?
Is there an automatic process to ensure that employees who don't do what needs to be done are informed and receive training?
Thank you.
We're in the process of putting measures in place. I think employees want to show that they've done their jobs, and we have had very good co-operation so far.
Our directors will follow up closely on quality assurance. In addition, they'll sit down with employees to remind them why we're doing this, which is always a good thing to do.
They'll also review their files for any potential deficiencies. This will then be brought to my attention and that of Ms. Royds in a biweekly report so we can identify any problems and offer further training or take any necessary corrective action.
[English]
We go to Mr. Bachrach, and then, as soon as he's done, we will suspend.
Mr. Bachrach, please go ahead.
Thanks, Mr. Chair.
I go back to this issue of changing the procurement strategy midstream, and this is under line of enquiry one, “Competitive procurement practices leading to contracts awarded to McKinsey”. The ombudsman lays out a storyline that, I think for most people, seems inappropriate, and this is with regard to a contract for $452,000 procured by ISED. They had originally considered issuing a contract directly using a non-competitive process, and then a review board internally said, “No, that's not appropriate,” which is good—the checks and balances worked. Then they reached out proactively to McKinsey and provided them with a link to the task-based supply arrangement, and in response McKinsey said, “No, we don't qualify for that.” ISED came back to them again and said, “Hey, good news. We've changed it. Now it's a solution-based supply arrangement.”
Getting back to what we saw with ArriveCAN, there's this situation in which the vendors and people in charge of procurement are in consultation and communication about the shape of the actual procurement process. How is the public to understand this as anything other than completely inappropriate?
From the outset, I'm going to say that PSPC was not involved in this procurement, so I'm going to give some broadline observations.
The methods of supply for this space of professional services are extremely complex. On the face of it, the issue about which method of supply to use and pairing it, or this view that there's favouritism, may be only that the methods of supply themselves did not lend themselves to the right bidder. It's not always an issue of trying to say that you need to go through this method of supply versus another. I think that's a key piece of information that needs to be understood, because most of our clients don't understand which method of supply is actually the suitable method of supply. That's the first thing I want to draw to your attention.
The second thing I want to draw is that, in this particular case, I believe they competed the solicitation, but again, we need ISED at the table.
I'm going to also add that changing from task-based to solution-based is encouraged under the directive on procurement. We want to de-risk procurement. I cannot talk about the motivation in that case but, basically, we want suppliers to take on more risk and client departments to take on less, so in and of itself it's not necessarily a bad outcome.
Not having been involved and not talking on behalf of ISED, I have to say this is now something that we're asking managers to do: Go to solution-based and stay away from task-based. Give that risk to the supplier instead of taking it on.
The outcome appears to me to be positive, so without—
I accept that. Solution-based is better, but in this case, it's the chain of events. It's offering them this meal and then they say, “No, I can't do gluten.” Then, “Well, we have this other meal for you, so how about this?” It's that communication back and forth that makes it look to the public like things are getting cooked for a specific supplier.
If I go back to the ombudsman's report, he says, very clearly, “Collectively, these observations create a strong perception of favouritism towards McKinsey”. Changing procurement strategies to allow for McKinsey's participation is one of the observations that led to that conclusion.
I don't have your response in front of me right now, but is that one of the conclusions you accepted in your response to the report?
That is one of the ones that we did not accept. In paragraph 110, where there is this collective overview, we have views. First off, PSPC doesn't figure prominently in this area. We have one contract of under $25,000, where we have comments.
Changing procurement strategies is okay.
I go back to your initial question, Mr. Chair, about what Canadians would say.
I think there's a balance as well in making sure we're optimizing the procurement system in a way that's efficient, fair, open and transparent to make sure that we're putting the right tool in place to be able to execute and deliver on services. There's a balance—I'm not suggesting one way or the other—but it's okay to change procurement strategies. We often challenge when clients come to us and say, “This is going to be sole-sourced.” We say, “No, you have to compete. Are you sure there's not anybody else who can do it?” It's okay to change an ACAN.
But you must accept the perception.... When there's communication back and forth with the vendor that seems to lead to a change in procurement practice, it creates a strong perception that things are being adjusted to meet the needs of a particular vendor. This is the finding here. It's exactly what we saw with ArriveCAN. In talking with the procurement ombudsman, he says that this is a systemic problem throughout government procurement.
I'm afraid that is our time. We are going to suspend to allow members to vote.
We will be back in probably 15 to 20 minutes.
I call the meeting back to order.
We have four more interventions, and then I need about five or 10 minutes.
Go ahead, Mr. Brock, for five minutes.
Ms. Reza, over a year ago—in fact, on February 22, 2023—this committee received a letter from your assistant DM of policy planning and communications, Mr. Ieraci, concluding the first tranche of documents that had been ordered by this committee. In that letter, your department promised there would be more documents to come, and that a second tranche would arrive well over a year ago—by March 3, 2023.
Who directed your department not to provide these documents to the committee within that time frame?
I believe the work is still under way. There are about 20,000 to 40,000 pages that need to be translated and collated, and the minimum redactions are being done. I believe they're on their way to you.
You referred three IT companies to the RCMP regarding fraudulent contracting, with a value of close to $5 million and in a time frame of 2018 to 2022.
What are they?
[Translation]
Thank you for the question.
As the deputy minister said, these are individuals. The names have been forwarded to the Royal Canadian Mounted Police, or RCMP. To preserve the integrity of its investigation, we prefer not to give the names of those resources to the committee.
[English]
GC Strategies is subject to an RCMP investigation, and an argument could have been made to preserve its integrity. There is still a presumption of innocence. People get identified every single day in this country when they're charged with a criminal offence.
I'll ask you again. Will you identify those three IT companies that have been referred to the RCMP?
Can you provide some context on the size of those companies? At this point, there's GC Strategies, a small, two-person company fleecing Canadian taxpayers for close to $60 million, all the way to McKinsey, the largest strategy consulting firm in the world, with 30,000 consultants across 65 countries. Again, they're potentially under RCMP investigation.
What are the sizes of the companies under investigation now?
[Translation]
I'd like to respond to that question, if I may.
[English]
For clarity, these are individuals. This would have come to light because of an individual working for two different companies and charging the Crown for the same time. It's not really about the companies at this time; it's about the individual consultants working. Those names have been referred to the RCMP for criminal proceedings.
I'm going to stop here and swivel for a moment—
About a month ago, we heard from your minister, Minister Duclos, and Minister Anand that this was only the first tranche of potentially fraudulent activity against the Canadian taxpayer.
How many waves or tranches can the Canadian public expect to hear about?
I'm not concerned about that, Ms. Reza.
The question is very specific. How many other tranches or how many other waves of further criminal investigations can we expect?
We got the impression from your minister and Minister Anand that there was going to be a review of all the contractors who were potentially subject to investigations by the RCMP and the Auditor General.
We know there are 635 similar IT middlemen operating in the same capacity as GC Strategies. Are all of those 635 IT middlemen being investigated for potentially fraudulent activities?
[Translation]
Thank you for the question.
As was already mentioned, the investigations are aimed at individuals who have multiple contracts with several firms. At the end of March, we also announced that we would be increasing our data analysis.
We will likely obtain other results about those individuals, i.e., consultants hired by primary contractors who could at the same time bill the federal government for work done under numerous contracts.
[English]
Chair, during Mr. Brock's round of questions, he put a very direct question to the witness regarding the names of companies. The witness indicated that she didn't want to provide an answer. That's lovely, but we are a parliamentary committee and we have a history of using the tools the House provides us with to insist on answers.
In respect of those rules, I would like you to put the question to the witness, Chair, with the witness understanding that we expect an answer to the question, in order to not be in contempt of the committee.
Thank you, Mr. Genuis. It's a good point.
Colleagues, this is the exact same issue we had with Mr. Firth, where very clear and direct questions were put, and he refused to answer. I'm not saying we're going down the same path as with Mr. Firth, but a very clear question was provided, and I think the committee deserves a very clear answer.
If you are going to provide the name of the resources to us in writing, I think that will be acceptable to the committee.
[Translation]
I will repeat my answer. I'll consult with colleagues internally, and we'll do everything in our power to provide the names to the committee, while respecting legal and confidentiality requirements.
It's not that we don't want to answer the question, but we want to be sure—
[English]
I'm going to interrupt you there.
I'm sorry, but we've been through this repeatedly. We've had the law clerk with us.
I'm sorry, Mr. Genuis, but I have the floor.
We've been through this repeatedly with various departments, yours included.
This committee and Parliament supersede privacy law. It was a very clear question. Again, I think you mentioned three resources, three companies. After everything we've seen with GC and this report, I think it's fair to ask that you do provide it to us so we can avoid, perhaps, the issue Mr. Genuis is referring to.
Can you do that for us, Ms. Reza?
I certainly can. I just want to add a footnote to this. I believe there's a production order, and this is probably part of the hesitancy. Understanding that, we will come back with the names.
No, let me.
I think the question is pretty clear. My request is that this be provided. I don't think we wish it would be part of the production order. If you could provide it separately, as has been requested by Mr. Brock, that would be wonderful.
Thank you.
I apologize. I'm saying those names are under a production order right now for the RCMP, but we're going to come back to you. I wasn't proposing anything else.
Thank you.
We'll try over the next few days to see exactly what the assessment is and provide it as quickly as possible.
Again, I don't believe the deputy minister truly appreciates the role of parliamentary committees.
As the chair has indicated, privacy is trumped by this committee. The fact you received a production order by the RCMP for the identity of those three sources does not in any way allow you to prevent this committee from receiving those names. There is no legal impediment for you to deliver those names to this committee. The issue of privacy is not relevant.
As I've indicated already, every single person—
Mr. Brock, I'm going to interrupt you there.
I think I've been clear. We'll say please provide this information as has been requested by Mr. Brock by Friday.
On a point of order, Chair, are the witnesses committing to provide that information or to come back with some further thoughts on whether or not—
Thank you, Mr. Chair.
Welcome back, Madam Reza, and your team.
I'm going to ask a number of rapid questions in trying to make a point that I think Canadians deserve to understand.
As for best practices in the industry when it comes to procurement, what is the trend? Have you seen the trend that a lot of organizations are moving away from task-based to solution-based, outcome-based, yes or no?
I think the Government of Canada and private industry are always looking for agility in procurement. Moving from task-based to solutions is a key piece of that. It's also going to be supported in terms of what we do with our own HR policies and staff augmentation with our public service, as well as project management and moving to more holistic solutions. This is where we'd like to go in this space.
Does solution-based allow the organization to flourish and also be able to work better together to come up with an ultimate outcome that the task-based solution will not allow?
I think there are niche uses for both. From a client perspective, having a solution is probably a very helpful approach in terms of digital delivery.
Thank you.
I'm glad that you talked about the niche approach. When an organization like the Government of Canada goes through a large business transformation under many aspects, whether it's the process, the people, the technology or the back end, benchmarking is one of those activities that will really benefit from a solution-based approach rather than a task-based approach. If traditionally we have done a task-based approach, as you are trying to understand the requirement and you decide that a solution-based approach is a better fit for that transformation, it's logical to change. Is that a fair statement to make?
I think those decisions are made in consultation with the client and the business requirement, and that procurement strategy evolves and looks at those different elements.
I'll take that as a yes.
Now let's talk about the national master standing offer, or NMSO. For Canadians, for simple Canadians like me, what would be the equivalent of a national master standing order? If I use the terminology “standard purchase order”, would that make sense?
I think, in trying to explain the policy instrument, you'd have to think of it as a catalogue of a very specific store, the self-benchmarking and data—
That's perfect, but that does not in any way mean that there was no process, before the issuance of a national master standing offer, for looking at vendors, evaluating vendors, making sure that they are qualified and then issuing up to five national master standing orders or master purchase orders for, as an example, benchmarking, which could cover a gamut of activities such as people transformations, technology transfers, process transformation or documentation transformation. All of those are various types of services that we and the department go through, and they need to do benchmarking against all of those to be able to go through the transformation. Is that a fair statement to make?
That is a fair statement to make. If you'll permit me to add, I would also note that one of the key elements of establishing those national master standing offers is that we did it in a very transparent way. It may have been unique to the various vendors in question—McKinsey is today's topic—but we had it out, it was posted, it was published and they're aware....
I draw your attention to the fact that, even in competing and re-competing, based on some of the guidance that was received and observations of the procurement ombudsman.... We sent it out recently, I think in mid-June 2023, to 5,000 suppliers, and only 13 have come back to us because it's such a niche space.
We've opened it up to make that playing field transparent for procurement purposes.
Thank you.
I would say that going to a solution-based contract from a task-based contract, when you're in that specific niche activity, is quite logical, so there is no conspiracy in there. That's just the right way of doing business. Having master standing offers, five of those among five competing top benchmarking organizations, means that there is no hidden agenda in there. We are making sure that we as a government have access to five best practices across that spectrum. Is that a fair statement?
That is correct. Moreover, it was the intent to make it more efficient for the government to procure those services.
Thank you, Chair.
It was said earlier that the procurement ombudsman did not find fraud. I would just say, he also did not find pickles, because that wasn't what he was looking for. His mandate isn't to lay criminal charges. I do expect that criminal charges will be laid in relation to government procurement. We've already had one contractor's house raided, and time will tell.
I want to ask about the issue of money being paid back in relation to the arrive scam scandal. Parliament passed a motion asking for money to be paid back. Kristian Firth testified that no one had even asked him about returning money.
Ms. Reza, have you had conversations with the minister about this? Is the minister seeking information or seeking processes to have that money paid back or not?
Restitution is something that we look at across various elements of ArriveCAN and other cases like we just described. We have had conversations. I have advised the minister that the issue is with legal, looking at the various approaches that can be taken and with the client whose budget it is.
To follow up on that, the House prescribed a timeline. Do you have a timeline? Clearly it's not the House's timeline because the House's timeline has elapsed.
Do you have a timeline on this from legal?
[Translation]
Thank you for the question.
When we find a substantiated file that clearly demonstrates overbilling by specific consultants, we can carry out—
[English]
I'm sorry, I don't need an explanation of the process. I want to know what is being done to get this money back in accordance with the House order. The time has elapsed on it. What is your timeline for reporting back, asking for the money and advising the House on next steps?
We'll have to come back with a written response in terms of the Department of Justice and the CBSA, in terms of next steps for restitution for ArriveCAN.
There's not much more to be said except that I don't think that's acceptable. We'll wait for your written response, but the House passed the motion, prescribed a timeline asking for the money to asked for, and we're well past that timeline. We're hearing that essentially it's in the process of being studied. That's clearly not good enough, but we'll look for a response. Fundamentally, this is on the government for setting those expectations.
You were a bit ambiguous in your response on the particular aspect of favouritism in the McKinsey report from the ombudsman. The ombudsman found that favouritism was shown towards McKinsey. You seemed to say that you agreed with the findings of the report yet also you seemed not to be clear on whether you agree with the finding of favouritism.
Did the government show favouritism toward McKinsey?
In terms of PSPC's position on findings and recommendations, we agreed with the procurement ombudsman's report. On his conclusions, and he has come here and spoken about the fact that he is making negative inferences, PSPC is a little bit more nuanced.
We have found no examples of favouritism. These cases PSPC is not involved in. These in 110...the four factors in terms of favouritism are based on many contracts of small value. As a contract authority, as a common service provider, we haven't issued that many to be able to make the assessment that this is an accurate bias.
In terms of the evidence, he provides a report in which he demonstrates clearly the reasons why he came to the conclusion that favouritism was involved. Based on your reading of the report, do you agree that the government showed favouritism for McKinsey? Is there a recognition of that finding or are you skeptical about that finding?
In terms of the conclusion, PSPC has also noted in a document that it doesn't have the same assumptions as the procurement ombudsman. I don't know if you'd like to add anything—
Can we just get a yea or a nay, though? Do you accept the conclusion that favouritism was shown for McKinsey or do you not? Either position would be a fair answer, but I'd like to know, really, from the deputy minister, do you accept the findings or do you not accept the findings?
I do not accept that there is favouritism for McKinsey in the current system based on our assessment as a common service provider.
Should McKinsey, because of their broader conduct, be on a blacklist? Why were they being contracted at all in light of all the things we know about their behaviour, conflicts of interest around the world, human rights abuses, etc.?
I'm afraid you should have left it at a yes or no. I don't think we're going to have time for a fulsome answer. Perhaps you can get back to us in writing, though.
Mr. Kusmierczyk, please go ahead for five minutes.
Thank you, Chair.
Thank you so much for being here with us today and providing us with some insights and shedding some light on the world of government procurement. We certainly have learned a lot over the last number of weeks. Again, the scale of procurement that takes place by the federal government—I think it's 300,000 contracts annually—is a massive amount of work.
Ms. Reza, my colleague used the word “collusion”, and I know that you took exception to that word. You were just about to, I think, speak about why you took exception to that word. I think you ran out of time, if I'm not mistaken.
I wanted to give you the floor to speak about favouritism and collusion in procurement again.
Thank you very much for allowing a follow-up. We did want to come back and talk about what we're doing on measures of collusion to ensure that the procurement system has integrity.
I think it's worthwhile to circle back to the issue that we just went with in terms of the findings and recommendations as they relate to favouritism. At PSPC, we look at the procurement ombudsman's report, how we can best apply it, put in best practices and adjust.
In terms of this particular element, it's difficult for us because we do hundreds of thousands of contracts. We need to be able to assess the broader bidder pool—for example, how many times McKinsey competed—to be able to assess whether there was favouritism. Is this structured on these very modest contracts? We have to look at the contract value to see whether or not it exceeded what they competed for when they were sole-sourced. There are a lot of different assumptions that we need to unpack and work with the procurement ombudsman on.
On favouritism, while PSPC as a common service provider was not implicated in the findings—there's one small contract—I do want to be able to give a thoughtful response and make sure that we're not offside, because there are so many recommendations and best practices here.
[Translation]
Now, I'll turn to my colleague Mr. Laporte.
[English]
Thank you.
From my standpoint, you need to look at whether there is positive, concrete evidence that would demonstrate that PSPC did favour McKinsey over another supplier. I know the ombud drew some negative inferences for the lack of information. I think when we drill down on PSPC contracts, we cannot accept the fact that there is evidence that shows that there was a preferential treatment that was afforded to McKinsey. There's no such evidence on file.
One of the things that we heard today is that the procurement officers work together. There's also an iterative, back-and-forth process at times between the procurement officers and the vendors. Can you just explain why it is appropriate to have that exchange back and forth between the procurement officers and the vendors?
I think the procurement ombudsman also spoke about this in terms of having industry participation. We have to make sure that we're shaping a solicitation that is not too restrictive and is encouraging open competition. We need to have the dialogue with the supplier base to see if it's doable and if the timelines are going to be met. There is a certain level of back-and-forth as the strategy is being shaped. Once we move into a solicitation phase, it becomes a much more gated, transparent element of the process, where that continuum has changed, and it's a more formal response.
Mollie.
What I would add here is that when looking at the types of contracting that were done in the instance of McKinsey, you have the full range: we've used supply arrangements and standing offers, as well as competitive processes and sole-source. In each of those instances, there would be a different type of engagement with the industry members that would have been competing.
For instance, for the large-value contracts, we would have had an open process. We would have had a fairness monitor and others who would be involved to ensure that those were open, fair and transparent. In certain other circumstances, such as a low dollar-value contract, it's completely appropriate for us to deal directly with the supplier to negotiate the best possible price and work through that together. It's a negotiation process; it really is on a spectrum.
There are very clear guidelines and frameworks that are used for that type of industry engagement. As the deputy minister has indicated, we are encouraged to engage with our supplier community. It's something that we take very seriously to ensure that it's done professionally.
That's something we also work on with our client departments, which are the technical authorities. They're the ones responsible for defining the actual requirements of an individual contract. It's very important that they also be involved in this and respect the integrity of the process. That's something that our procurement officers work very hard to do, as well.
Thank you very much.
We are done with our witnesses.
Ms. Reza, Ms. Royds, Mr. Laporte and Ms. Poulin, thank you for joining us again. You're welcome to stay and listen to the riveting discussion on our budget if you wish. Otherwise, you are dismissed.
Colleagues, we're just going to go and—
Yes, let me, please, get to my stuff, sir.
Colleagues, we're just going to do the budgets. They have been distributed to everyone. Again, these are the upper limits. There's $24,750 for Canada Post rural and remote communities.
Are we all in agreement?
Some hon. members: Agreed.
The Chair: Wonderful. It's the same amount for a red tape reduction modernization study.
Are we all in agreement?
Some hon. members: Agreed.
The Chair: Thank you very much.
I'll get to you, Mr. Perkins, but I have two items quickly. Mr. Firth, in our committee of the whole when he was called to the bar, was asked several questions that he promised to respond to us on. He has responded, and that is getting translated right now and will be sent out to members; however, it is the members' responsibility to check whether the answers are satisfactory or if the questions were answered.
For the sake of argument, if Mr. Louis asked for something and there is no response, it's up to him to advise the committee of that. Probably by the end of the week or early next week, when you have it, keep an eye on it. Again, it's your responsibility.
On Canada Post and the main estimates, we're running into some headwinds from the ministers. We were going to have the president of Canada Post here on May 29. Lo and behold, TBS Minister Anand and Minister Duclos are both insisting that they're only available on that date as well, so we'd be looking at 16 witnesses; and with our new set-up they would be out in the hallway.
We're trying to arrange different times, perhaps a four-hour meeting on the Wednesday so we can accommodate everyone and we don't have 16 people in here for an hour. I will let everyone know hopefully by the end of this week or early next week if we have another solution. We might have to find another time for the president of Canada Post. If everyone will allow me flexibility with the president, we will do so, but it's certainly not our intention to have 16 witnesses in here for two hours on the main estimates and Canada Post rural.
Was there something, Mr. Bachrach?
First of all, Mr. Chair, thanks for all the legwork you're doing on this. It's frustrating.
I wonder, for the estimates, if we could name the specific individuals we want as witnesses. It seems like a funny process where we say we want the minister, and then 20 people show up. It almost seems like an intentional strategy. I'm not sure what the strategy is, but it seems like a way to muddy the waters and dilute what is really about accountability.
That's always been my reaction over the years, but it's generally their support. For the sake of argument, it would be Minister Anand, her DM, an ADM and maybe the CFO. That's typical. It's just because it's three departments at once, and that's how we ended up with the number.
I'm hoping, yes, that we can find agreement to do it over four hours, if they are only available on the 29th.
That has been the declared will of the committee, that the president of Canada Post appear separately on the rural post office study.
I've spoken with you about it.
In the document order that was just returned from Canada Post regarding the closure of post offices since the 1994 moratorium, there is very scant information. We were very specific about what information we were requesting, and all that is provided is a two-column list and the number of post offices closed per year. We wanted specifically the communities in which they were closed and the reason for closure, so I would love to empower you, Mr. Chair, to go back to them and clarify the original request and demand the documents.
I'm glad you brought that up. I noticed that myself, because that was something I added in, I think—the reason for the closure. If everyone's fine with this, we'll just write them a letter asking them to provide the information.
Is that fine?
Some hon. members: Agreed.
The Chair: Mr. Perkins, go ahead, keeping in mind we turn into pumpkins in about five to 10 minutes.
Thank you, Mr. Chair.
I'm bringing up my favourite subjects—Stellantis and Volkswagen contracts. We've had a number of motions since December. I think MP Masse had one on here that attempted to find a solution back then to narrow the scope rather than having just the whole contracts. There has been lots of discussion by Liberal members about how, if we released the whole contracts, there would be some sort of commercial sensitivity in that.
In the spirit of compromise, I've circulated to the clerk a proposed motion that tries to accommodate the concerns that were expressed by several other parties. While I believe there is very little that's commercially sensitive in the contracts—because the Liberal ministers, the Prime Minister and this committee have spoken at length about the number of jobs associated with each contract in both the construction and production phases—there should be absolutely no commercial sensitivity if the government releases the clauses in the contracts related specifically to the job commitments in those contracts and makes them public.
Since all those numbers that have been talked about in the House, in public and in the media—the 2,500, the 2,700 and the 1,300—are not obviously commercially sensitive, the clauses around those should be released.
The first part of the motion, which I won't read here because we're short on time, basically lists the companies we're talking about. The second part says basically that we want the contract clauses that detail the job commitments, including any and all prohibitions or limits on the use of foreign replacement workers; any requirements that require Canadian citizens or permanent residents to be employed; any and all references to direct, indirect and induced job commitments; and any penalties for failing contractual obligations to be outlined.
There are a few other things it asks for. Once the committee has those, it asks for ministers and officials from both the companies and the departments to appear to answer questions related to those job commitments.
Since this is basically what the NDP has been asking for and since the Liberals have been saying that they can't release the whole contracts because they're commercially sensitive, this part isn't. I would find it hard to believe, then, that anyone in this committee would vote against this motion. If you would, that means there's obviously something else to hide that says that these commitments don't do what the government has publicly said they do.
I'll leave it there, since we're short on time, Mr. Chair, and consider this tabled. Hopefully, we can vote on it today.
Mr. Chair, this is the first time I'm laying eyes on this motion, so I'd like us to suspend. Could you give us 10 minutes to read through it, please?
I'm afraid we're not going to have resources for that if we suspend. I see Mr. Bachrach. We're not going to be able to do that because of the lack of time. Is there a desire to vote on this right now, considering there would be a very similar outcome on Monday?
We can go. We'll have to suspend in a few minutes, and I'd rather we voted on it to put it to bed so that we won't interrupt our meeting on red tape on Monday.
Okay. We can't suspend, but why don't we skip over to Mr. Bachrach, and then we can come back to you on the speaking list first?
Thank you, Mr. Chair.
This is right at the end of the meeting. I don't think we can really do this justice in the time remaining.
I know Mr. Masse came to OGGO at the last meeting and made this point on behalf of our party. There are negotiations ongoing between the labour unions and the companies. There is a real reluctance and opposition on the part of those unions to have this turned into a three-ring political circus, because they feel as though it's going to jeopardize those negotiations. I'll just read specifically from a piece in iPolitics that I believe appeared yesterday. This is a quote, I believe, from Canada's Building Trades Unions. It says,
While we are pleased that all parties are concerned with Canadian unionized jobs, we do not believe it is in the interest of our ongoing discussions in pursuit of [memoranda of understanding] with global automakers for such an expansive production order to be proceeded with at the current time, while sensitive negotiations are being undertaken.
Our preference would be to revisit this issue in one month...[to] allow all parties to conclude negotiations.
I think this is an interesting line of inquiry. I think it is of interest to Canadians to know how these contracts deal with Canadian jobs. However, right now there are negotiations that are sensitive and that are ongoing, and I think it would behoove this committee to respect those negotiations by not proceeding with a document production order at this time.
I appreciate what my colleague Mr. Bachrach has stated. The CBTU's concerns are at the centre of this discussion and this debate. We're unequivocally clear that they see opening up the contracts, especially at this sensitive point, as potentially undermining the conversations they're having with Honda and with other companies.
More than that, we're in a situation whereby Mr. Perkins is asking us to listen to and follow him, and completely ignore not just the voice of the CBTU, but the voice of Unifor, which is the largest union in Canada, and the voice of the president at the time of Unifor Local 444 in my community. That local represents thousands of auto workers who work for Stellantis. These are folks who are at the centre of this discussion because this has potential impacts on their livelihoods and their future jobs. They said they don't want to see this happen because they see it as a risk, they see it as a danger and they see it as undermining the very investments their membership relies on and will rely on for jobs. It completely ignores not just the labour side, but the business side as well.
The Canadian Chamber of Commerce was absolutely clear in saying that this would undermine Canada's competitive advantage in being able to attract future investment to this country.
Over the last four years, we've seen $50 billion of investment delivered to Canada by this federal Liberal government—
Mr. Kusmierczyk, I apologize. I have to interrupt because I have to suspend the meeting. We are literally out of resources. You will get the time you need. We'll have to take this back up Monday.
Thank you everyone.
[The meeting was suspended at 7:09 p.m., Wednesday, May 1]
[The meeting resumed at 11:03 a.m., Monday, May 6]
Good morning, everyone.
I call this meeting to order.
Welcome back to meeting number 119 of the House of Commons Standing Committee on Government Operations and Estimates.
We're resuming the meeting, which was suspended last Wednesday. We are in committee business still, resuming debate on the motion in the name of Mr. Perkins.
Before we continue, you're all aware of the new rules around the microphones. Please keep your earpiece away from the mic in the places noted so we can protect the hearing of our very valued interpreters.
When we suspended, Mr. Kusmierczyk, who I see is wearing black in mourning for his Toronto Maple Leafs, had the floor.
I apologize to Mr. Sousa and Mr. Kusmierczyk.
Mr. Kusmierczyk has the floor.
I will start a speaking list, but Mr. Kusmierczyk, we'll give you back the floor. Hopefully when we are done today, though, I do—
We are still in committee business. I do have to discuss Canada Post and the estimates. Perhaps we can get through all this today. It's just a heads-up.
Go ahead, Mr. Kusmierczyk.
I just wanted to say, for all the Leafs fans out there, take heart. There is a dawn after the dark. As I said, we'll be back next year better than ever, so go Leafs go. I just wanted to put that out there.
On a point of order, Chair, I hear that there are a lot of people expressing interest in taking over the leadership of the Leafs organization. Speculation is alive and well. Maybe a new coach will change the dynamic for them.
My Oilers are still going strong, but I do mourn the loss of the Leafs.
Go ahead, Mr. Kusmierczyk, on the EV main motion. I believe we removed the amendment.
I just wanted to say that even though again we're hearing the Conservatives and their divisive rhetoric, let's rally around the remaining Canadian teams that are in the playoffs. Go Oilers. Go Canucks. It will be hard to parse that out this round—
We're looking forward to supporting our Canadian teams.
We're on the subject of the motion that Mr. Perkins has brought forward yet again to this committee. It is a motion that is almost identical to the motion that was brought previously to this committee, which was voted down by this committee. It's also a motion that is before the INDU committee.
We're here basically taking time away, as I see it, from important studies that we should be discussing here today, whether it is red tape reduction, which is absolutely critical to support our small businesses and Canadians, or whether it's diversity and procurement. Unfortunately, here we are discussing a motion that is recycled and almost identical to the motion that was brought before us and voted down just a few days ago.
But here we are.
I see this as a distraction from the very fact that this Liberal government has brought to Canada over $50 billion in auto investments in just the last four years. That is an astounding amount of investment in job creation in communities like mine in Windsor, in communities like St. Thomas, in communities across Quebec and B.C., and really right across the country. It's incredible when you combine it with the fact that we're not only seeing tremendous investment in the auto sector, but also seeing the completion of the Trans Mountain pipeline as well, which is a major Canada-building infrastructure project that's going to have a big impact.
Again, when you compare that track record of job creation and investment, it's tremendous, with $50 billion in auto, tens of thousands of jobs being created in automotive and manufacturing, and tens of thousands of spin-off jobs in manufacturing and the Trans Mountain pipeline as well. When you compare that to the Conservative track record eight years ago, where the Conservative government at the time lost 300,000 manufacturing jobs across Canada and was unable to complete a single major infrastructure project, the difference between today and yesterday is black and white. It's incredibly stark.
What we're seeing here today is a motion brought before this committee with the purpose of doing nothing but trying to distract from the good news of the $50 billion in auto investment across Canada. I'm talking about the Stellantis battery plant in Windsor. There are 2,000 folks building the battery plant in Windsor right now. When you take a drive down E.C. Row, hang a right on Banwell Road and head towards the tracks, you drive by literally hundreds upon the hundreds of pickup trucks and cars, with Ontario licence plates, of workers who are building that battery plant as we speak.
These are local workers. These are Canadian workers. These are unionized workers. These are workers who are part of the CBTU, the ironworkers, the millwrights and the painters—you name it. They're local workers and they're building that battery plant.
When the battery plant is done, you're going to have an additional two and a half thousand permanent workers at that battery plant who are going to be building batteries for generations to come. Those two and a half thousand permanent workers will be local, they will be Canadian and they will quite likely be unionized.
This is a tremendous story that the Conservatives are desperate to try to distract from.
Then, up the road—if you travel literally an hour and a half up the 401 to St. Thomas—you see another Volkswagen...another generational battery plant being built. You're going to have 2,000 local, Canadian workers building that battery plant in St. Thomas. You're going to have 3,000-plus permanent, local, Canadian workers building batteries in St. Thomas.
At Northvolt in Quebec, you're going to have over 1,000 people building the battery plant there. You're going to have over 3,000 permanent jobs there, building batteries for generations to come.
Of course there's the Honda investment, which is the single largest investment in the history of this country. It's the largest investment in automotive and the largest battery investment in North America.
That's, again, 4,500 jobs supported permanently, with thousands of jobs for building those four factories that will be built across Ontario and across Canada. That's incredible—and that's saying nothing about the Michelin investment or Rio Tinto.
What you're seeing right now is that the world is coming to Canada to build. The world is making huge investments and bets on Canada to build batteries and the electric vehicle supply chain here. It is incredible to see, and it is an incredible turnaround from what we saw eight years ago, when the Conservatives were in power. I just want to underline again that, under the Conservatives, there were 300,000 manufacturing jobs lost. In manufacturing communities like mine, there was 11.2% unemployment and close to 30% unemployment for young—
Thank you, Chair.
The member is obviously repeating himself, but I would also just say, he said this was before the committee and it was defeated. If this member is so confident that he has the votes on this, why doesn't he let it go to a vote? It's odd that he is claiming, on the one hand, that the majority of the committee doesn't want this motion, but on the other hand he's filibustering to prevent it from going to a vote. If he thinks he has the votes, then he should stop repeating himself and let the committee proceed in making its determination on this matter one way or the other.
Thank you.
He's half right, Mr. Kusmierczyk. You are starting to repeat yourself again. Can you get back to the motion, please?
Absolutely, and I appreciate what you just said, Mr. Chair. Again, I think it's important for us, as we're picking up this thread of this debate, to provide a little context on the path that got us here. That's what I'm trying to do here.
All the investments that I just outlined, that this Liberal government was able to deliver in the last four years, means that we are now, according to Bloomberg, the number one destination and jurisdiction. Canada is number one in the world in the electric vehicle supply chain. It's remarkable what we've been able to accomplish here in the last four years.
We're also number one in foreign direct investment per capita. Think about that for a second: Canada is number one in foreign direct investment per capita, which means we've completely outpaced, beat out, countries like China and the United States in attracting foreign direct investment. What we're seeing is that global companies are showing tremendous confidence in Canada and investing their capital in this country because they see the power of the Canadian workforce, the skills, the tremendous resources we have here and the investments we're making in clean energy and in fighting climate change, and they want to be here and to be part of the action.
Stellantis and LG, a Korean company; Volkswagen, a German company; Northvolt, a Swedish company; Honda, a Japanese company, are locating, putting billions of dollars here. Think about that for a second and about how that challenges the misinformation and narrative that the Conservatives are desperately trying to put out, pump out and hold up there. There are companies from all around the world that want to locate and invest here because they see their future here in Canada too, and they want to build it with us, which is remarkable.
When you drive by the battery plant in Windsor, it's incredible. I highly encourage all the members of the committee to take a drive, to visit. I would love to show them. It's incredible. It is the size of 150 hockey rinks, what's being built there. As you drive by, you literally see hundreds upon hundreds of cars, pickup trucks with Ontario licence plates and local workers building the battery plant as we speak. That's where we're at, and it's important to note....
Mr. Perkins wants us to listen to him. He's again trying to bring forward this motion, which is almost, again, essentially the same motion that we saw last week.
On a point of order, I have not had the floor in quite a while.
MP Kusmierczyk has been speaking now, over the two meetings, for two hours of filibustering. I think it's Mr. Kusmierczyk who wants the committee to hear from him.
I do want to speak on this issue, and I will take this opportunity to speak on this issue, as it impacts my community greatly because we do have a battery plant in my community. We have a battery plant that has created 2,000 jobs for local workers in my community and will create an additional 2,500 permanent jobs for local Canadian workers in my community.
It is important for me to talk about this. Again, Mr. Perkins is persistent in bringing back this motion that has been voted down in the past, so I will be persistent in what I want to say as well.
Regarding the rules around filibustering, MP Kusmierczyk doesn't seem to understand that there's no repetition.
It takes quite a talent to do that, which clearly this MP doesn't have, because that's about the fifth time today and twice already in 15 minutes that he's said that.
I'd ask the chair to keep him on relevance and to stop him from repeating himself.
Mr. Kusmierczyk, Mr. Perkins is right on the repetition part. If you are going to continue, we do have to follow that. We do give, obviously, very wide breadth for the debate, but repetition is something we're trying to avoid.
I think that Mrs. Atwin had a point of order.
Go ahead, please.
Yes, Mr. Chair, I think it's inappropriate to have made the comment that Mr. Perkins did regarding a lack of talent of the member. I don't think we need to delve into personal attacks like that, so if we could get back to work and what we're trying to achieve, that would be great.
If Mr. Perkins said I lacked talent in baking or singing, I wouldn't consider that an attack. I would consider that accurate.
Thanks very much. Everyone's point is taken.
Mr. Kusmierczyk, you have the floor, but watch the repetition, please.
Thank you, Chair.
I appreciate your words, and I want to reassure you that I am just about to conclude here. In the next moment or two, I will be more than happy to yield the floor.
I did want to say that I would never impugn or disrespect someone by commenting or making a snide remark about a committee member's character, talent or skills. I think that is below the belt.
Of course, I am happy to talk about the Conservatives' inability to create jobs when they were in power eight years ago. That's not me saying that; it's their track record that speaks volumes. I'd rather let their track record speak, and I'm going to refrain from making comments about their skill level, talent level or their character.
What I do want to say is that, again, going back to my original point, Mr. Perkins keeps bringing this motion forward, and it keeps getting defeated here. It's a motion that Mr. Perkins wants us to listen to, but I'd rather listen to the CBTU, which sent a letter to this committee last week stating that they do not want to see this motion move forward.
They were explicitly clear about that. I'd rather listen to Mr. Sean Strickland. I'd rather listen to the CBTU that said they don't want this to proceed. I'd rather listen to the APMA, Automotive Parts Manufacturers' Association, that says they do not want to see this motion move forward because they see it as a risk to the investments that were already made.
I'd prefer to listen to the Canadian Chamber of Commerce that signed a letter stating very clearly that this will do irreparable harm to Canada's ability to attract additional investments. This is the letter that they had circulated to the entire committee.
I'd rather listen to, not only the APMA and the Canadian Chamber of Commerce, but also the Canadian Manufacturers and Exporters that said that the committee risks doing irreparable harm to Canada's investment attraction negotiating position.
I'd rather listen to the Canadian Vehicle Manufacturers' Association, which includes companies like Stellantis in my neighbourhood, and the Global Automakers of Canada. These are the folks saying that they don't want to see this motion move forward.
Lana Payne, the president of Unifor, the largest union in Canada, says that she doesn't want to see this motion go forward. The president at the time of Unifor local 444 was Dave Cassidy. This is the union that represents thousands of auto workers in my community, and they will be representing the battery folks who will be building the batteries in my community. Mr. Cassidy was absolutely clear and explicit in saying that he doesn't want to see this motion move forward.
This is what he said when he was up in Ottawa meeting with Prime Minister Trudeau.
President Cassidy said—
This motion was moved long after the union leader he's referencing actually left his job, so he didn't comment on this. I would ask that the member at least speak to accuracy when he's doing this.
I just want to state this is what Dave Cassidy, the president of Unifor Local 444, representing auto workers in my community, said when he met the Prime Minister of Canada in Ottawa:
My message is simple, this has turned into nothing but political hay.
He was talking about the Conservatives' motion trying to undermine the investment in the Stellantis battery plant, trying to create hay about this. He went on to say:
We have to make sure all the theatrics and all the political stuff is gone.
He was very clear about that. He was also very clear when he said:
If it was up to the Conservatives, we would not have this investment in Windsor today. They look at it as corporate welfare instead of a return on an investment for all the workers that will be there.
This is straight from the president representing the workers in Windsor.
It is absolutely clear why we need to vote on this motion and send it back. This is really important, and as I said, I'd rather listen to the CBTU and the APMA. I'd rather listen to the Chamber of Commerce. I'd rather listen to Unifor, and I certainly would rather listen to Unifor Local 444 that represents all the auto workers in my community.
That's all I have to say at this time. I'm looking forward to listening to the opinions and insights of committee members from both sides.
Thank you.
Thank you, Mr. Kusmierczyk.
Is there no one else? Can we move to a vote on this?
Go ahead, Mr. Bachrach.
If we go back to the message that was shared with the committee from the building trades unions, I believe the sense in that statement was that there are negotiations that are ongoing. There's a concern that the committee's deliberations will compromise those negotiations. The desire from the building trades was that the committee put this on ice for a month and potentially return to it down the road, pending the outcome of those conversations that are going on.
With that, I think it's more prudent to vote to adjourn debate on this motion before us and pick it up at a later date than to have a vote on it and risk having that vote compromise the negotiations.
I'll move that we adjourn debate.
You can't put a condition on a motion to adjourn, but I understand, so is it just a motion to adjourn?
Any member of the committee can bring back the motion at any future date. I think the intention is clear.
Wonderful.
Yes, I'll get to you Ms. Block. Don't give me that look.
Some hon. members: Oh, oh!
The Chair: I'm just teasing you. Yes, I see you.
I see you as well, Mrs. Atwin and Mr. Genuis.
Colleagues, before I get to that, I want to discuss May 29. There are two things, just to keep everyone informed.
I've brought this up before. For Canada Post, as the committee made clear, the president is to appear for the rural post office study by himself, without PSPC, and he has agreed to appear on May 29. Somehow, PSPC has decided that they are going to appear together, which is against the will of the committee. We are communicating to them. He's welcome to come along with PSPC on the mains, but he will appear separately.
My intent is to do a four-hour meeting on the 29th, starting with PSPC on the main estimates and with TBS on the mains in the second hour, with the minister. Then, in the final two hours, it's Canada Post, to recognize the motion from Mr. Bachrach and the will of the committee to have Canada Post appear separately on the rural post office study.
That's just so everyone is aware of that.
On Wednesday—the clerk just sent out a note—we are doing the line-by-line for Canada Life. We have a small number of recommendations. It's a relatively short report so I'm hoping that we'll be able to finish it in its entirety this Wednesday.
Before I go to Ms. Block, did you have something specifically on May 29, Mr. Jowhari?
As am I, Mr. Jowhari, so you might have to repeat what you just asked.
The intent is to do a four-hour meeting. We tried to get PSPC, Treasury Board and Canada Post to be flexible with us. Unfortunately, with much disappointment, they have all refused and they are all going to appear on the same day for the main estimates.
PSPC stated that they wanted to appear with Canada Post, but we brought it up almost a month ago that this is not the will of the committee. PSPC is welcome to bring them along between 4:30 to 5:30, if they wish. The will of the committee, and my intent, is to have them here separately from 6:30 to 8:30 solely on the rural post office study.
I'm sorry. Just let me interrupt.
Before we get to Ms. Block, Mrs. Atwin and Mr. Genuis, we'll just finish all the discussion on May 29.
Thank you.
Really, on May 29, for the first two hours as you are suggesting, from 4:30 to 6:30, that was the plan. This is as we have planned before. This is on the main estimates. We're going to have PSPC and TBS. That hasn't changed. All we are adding is two hours next to that, and that's where we're bringing in Canada Post.
[Translation]
[English]
We had tried to get PSPC by themselves for two hours, and TBS by themselves for two hours, on the mains, as has been traditional. Unfortunately, we have not been successful in getting them to be flexible with their calendar.
Mr. Bachrach, is this on the 29th issue?
It's on the issue of Canada Post appearing on the study on rural postal service.
I would love to have the documents that we requested by that time so that we can ask him about the specifics. I'm just noting that the information was not included as requested.
I just wanted to make a quick comment that I'm disappointed to see the continuing erosion of ministerial accountability in terms of reporting on the estimates. There was a time when even Liberal members would ask ministers to appear for two hours on estimates. Now, the norm has become one hour plus an hour of officials, and now they're trying to erode it further to have both ministers appear back-to-back so you lose the additional hour with officials for follow-up questions as well.
By next fall I suspect we'll have an offer of seven minutes for each minister, once every two years or something. Maybe I'm on dangerous ground even suggesting that; I don't want to give them ideas.
This is stupid, it undermines the accountability function that committees are supposed to have. It's clearly the intention of the government to offer ministers a very limited window on the same day, without the opportunity to have follow-up questions for officials. It's bad for our democracy, but there's not much we can do about it, I suppose, since committees don't have the power to summon ministers. It's a bit ironic, in some ways, that we can go all the way to the wall in demanding answers from other people, but ministers blow off tradition when it comes to accountability.
I think it's bad for Parliament and bad for democracy, but it's frankly just what I've come to expect from Liberal ministers. I want to register my displeasure and leave it there.
[Translation]
Thank you, Mr. Chair.
I just want a clarification about the ministers' appearance, specifically the dates.
Isn't the chair the one who sets the schedule for meetings, based on the committee's needs and available dates, so as to optimize the time we have left?
[English]
We do invite and we've offered different days for the ministers to appear. Unfortunately, they have refused. They've stated this is the only date available to them. I take the estimates very seriously, as you're probably aware, and I think I'm agreeing with Mr. Genuis that it's unfortunate that we cannot have the ministers here, the departments, for two hours to defend their estimates, especially considering the amount of money and, frankly, the poor results from the departmental results, but unfortunately, this is all they will make themselves available for.
On the 29th, Mr. Drouin.
I'm just sensing a bit of...from our side. I've been on this committee before. It would happen that once in a while ministers appear on both dates. I didn't hear any objections as to having the department appear after, so I don't know what the issue is if you want the department.... I've been at committees where opposition members just wanted to question the ministers and the heck with the department, but if the opposition wants the department to appear, I don't sense that we have an objection on this side. We've never had an objection, so it's just a matter of scheduling. It's not a big issue.
On that point, my preference would be that, if the minister is only going to make him or herself available for an hour, we would have officials come for the next hour so that we can follow up on unanswered questions that emerge from that meeting. We're working down the list from, what should happen, next best, next best, but yes, I think better than what's currently proposed would be to have the deputy ministers—and it should be the deputy ministers then—come back for an hour and an hour at a subsequent meeting before the estimates are adopted. If there's agreement on that, let's do that.
Speaking of that, Chair, it just reminds me that there was some follow-up testimony from the deputy last week. There were some unanswered questions that were left on the table that we had been told we would get responses to by the end of the week. Did we receive responses on that?
I have just two things. Mr. Drouin has a point, and you've made a point. If necessary, we'll bring in the officials separately. The original offer by the government was to have both ministers and the president of Canada Post and all the officials all together, all 16 of them, for one two-hour meeting, with the ministers all appearing together for one hour only. I think this hopefully is the best way forward. We'll get the ministers and, then, if necessary, the officials separately.
Mr. Genuis is bringing up the issue of PSPC delivering names or documents to us last Friday. They've provided those to the committee in a password-locked file that they somehow cannot get unlocked. We are following up with the deputy minister to obey the will of the committee and, trust me, we are on it. My intent is to have it to everyone today.
I do not know why they decided to go this route. Hanlon's razor is to not attribute to malice what is more attributable to incompetence, but I have great concerns, considering the push-back and the commentary made by the bureaucrats when we asked for this information. However, we are on it. I'm hoping we'll have it today.
Mr. Chair, I feel like I have walked into a Monty Python sketch here. They promised to provide the information. Okay, they'll provide the information, but it's behind a password-protected mechanism, and they won't provide you with the password. That is terrible but also comically ridiculous.
Just to follow up on the earlier point—
I'm sorry, but I will interrupt.
We'll have it shortly in the old-school way. They'll deliver it on paper, and we'll get it scanned and sent out, so it will be provided today.
We should axe the fax.
On the question of officials, you said, “If necessary”. No, let's get the DMs in and schedule them for immediately after the ministers if we can't have them on the same day.
Okay. We'll follow up with them.
Wonderful. We can put the 29th to bed.
Thanks, everyone, for your feedback and input.
On that, sort of, have we also heard back from the premiers, who were asked to provide additional evidence when they testified on March 29?
They were such expert witnesses for that very important study. I'd like to hear what they have to share with us.
Thank you very much, Mr. Chair.
I think the good news out of this debate, or what is fortunate, is that Canadians are watching what is happening in parliamentary committees more than ever before, and they are watching what's happening in this committee, because they understand the very important work we are doing in scrutinizing the spending of their taxpayer dollars.
On that note, I would like to move the motion that I put on notice I believe a week ago or a little more than that. It reads:
Given that a Global Affairs Canada investigation into government contracts found a failure rate of 26% and the report found that “the signed contract was not provided” and “one contract was approved 'by an individual who benefited from the transaction'”, the committee call the Minister of Foreign Affairs, the Honourable Mélanie Joly, to appear for a two-hour meeting and the deputy minister and officials responsible for the report to appear for a two-hour meeting.
Thank you, Mr. Chair.
Thank you, Mr. Chair.
I want to thank Mrs. Block for putting forward this important motion.
We have seen across this NDP-Liberal government so many examples of outrageous contracting irregularities. Taxpayers are now coming to see the pattern through which their money is wasted through broken, unfair, unreasonable contracting processes that reward well-connected NDP-Liberal insiders and do not deliver value for money.
We have seen this pattern over and over again. This committee has done extensive work on the arrive scam scandal, but we are now seeing that the arrive scam scandal is the tip of the iceberg. It's part of a larger pattern, which is that we have a government that is focused on paying and rewarding well-connected NDP-Liberal insiders instead of delivering efficient, effective results for Canadians. There is so much waste. There is so much in the way of savings to be realized and value to be created by improving the system.
Mr. Chair, it's not lost on me and, I think, on many Canadians that many of the people who are at the centre of sketchy procurement and contracting questions also happen to be those who are being considered or who want to be considered for future Liberal leadership.
We have Minister Anita Anand, the President of the Treasury Board, and all the problems we have seen there. We have the public safety minister responsible for the CBSA where the arrive scam scandal is happening now being rumoured...and now Minister Joly with the contracting problems at Global Affairs.
I would say that these ministers responsible for outrageous procurement problems within their departments who are looking for a promotion in their role should come before the committee and provide an explanation for their management of their current roles and the procurement problems we have seen.
It's a common-sense motion, giving Minister Joly an opportunity to be accountable and to provide a report to this committee on what has happened. I hope that members will see the obvious logic of supporting this motion that the minister should appear. I will say, Mr. Chair, that hopefully it's not on the 29th as well. You never know with the government. However, if the only time she will come is from 8:30 a.m. to 10:30 a.m. on the 29th, we will take it. Ministers need to provide responses.
I will say, as well, that this committee has developed, I think, over the months we have been working on this issue, a particular experience and knowledge as it relates to government procurement problems, best practices and how far this current government is missing the mark when it comes to best practices for procurement. I think we are ready and well positioned to do this.
As the various leadership candidates try to position themselves for being the future leader of the Liberal Party, they should be willing to, in their current roles, come before committee and provide answers.
I will say, as well, that this committee has rightly asserted the prerogatives of parliamentary committees when it comes to getting answers from government contractors. Kristian Firth was supposed to appear. He refused to appear. He refused summons. Eventually, he appeared before this committee, but he didn't answer key questions. As a result of that, we made a report to the House, and he was summoned to appear before the House.
It would seem to me that after we have established that we are committed to ensuring that the private citizens who are involved in sketchy government contracting provide answers, we should be equally insistent and equally willing to use the tools that are available to us to assert also that ministers of the Crown who are elected and charged by the executive with running departments and being accountable for them provide answers for what happens in their departments.
If we're going to go all the way to say that Kristian Firth, Darren Anthony and other such people have to provide responses to committees, then we should say the same thing about ministers of the Crown and should not have a dynamic in which cover is provided for ministers not being accountable for those activities.
I hope that we see consistency from this committee and that we expect the same accountability of ministers as we have asked for from private citizens involved in contracting. I look forward to seeing where members land on that.
Chair, I'll wrap up my remarks on that point.
Thank you, Chair.
First of all, I would like to thank the leader of the official opposition for the birthday card he gave me last week. Those well wishes were very well received. I'm grateful for that.
I want to follow up on my colleagues' comments.
I think this motion follows a theme we've had in this committee, and that is to search for accountability, not only from departments, but also, fundamentally, from ministers. It would have been my desire to have seen the ministers of all departments that had contracts with GC Strategies show up at this committee, but unfortunately, we didn't have that opportunity.
Given this report, specifically at Global Affairs Canada it behooves us to call in the minister to defend the procurement within this department. I would encourage all departments to conduct the same exercise within their respective departments, to really look at what is going on in their departments and to look at how money is being spent. That is fundamentally what this committee is about: ensuring that the funds that were granted, out of trust, by the Canadian people were well spent by departments that are overseen by ministers. To me, the appearance of the minister would absolutely be in alignment with the mandate of this committee and the oversight for which this committee has the responsibility.
My second point comes from my personal experience as a management consular officer at Foreign Affairs Canada, which was then DFAIT, which was then DFATD and which is now Global Affairs Canada. The audit team at Global Affairs Canada is the best there is. They go into missions and departments, and they leave no stone unturned, in terms of their evaluation. I can truly say that their work is invaluable, and I give them thanks and credit for shining this light on the department and for having the courage to bring this information forward.
Really, the job of a bureaucrat, and I was proudly one for close to a decade and a half, is not only to do the work of the Canadian people but also to speak truth to power. I feel that, in bringing this forward, this brave group of public servants at Global Affairs Canada is bringing truth to power. I was also very proud to be the interim director of a sister group of this audit group during my time at Global Affairs Canada.
I am in strong support of the quality and the objective of this work and I give thanks for it. I would like the minister to be held to account for what this outstanding group uncovered.
My final comment is that certainly the ongoing role of the Minister of Foreign Affairs has been one of relations external to Canada, which, my colleagues would agree with me, I believe, we have seen to be reactive. Those relations have not been consistent. They have not come from a place of consistent values, as we saw with the previous government, the Harper government. I'm very excited about the return to a values-based foreign affairs platform in a future Poilievre government.
However, what the minister did make as her mandate was the revitalization of Global Affairs Canada, and with that, supposedly, a new hope that the members of the Canadian foreign service and the public servants at Global Affairs Canada could have faith in the work their department is doing, yet this audit team uncovered cracks, faults and areas that need to be improved upon.
Global Affairs Canada serves as the emissary of Canada to the world and, therefore, serves as a foundation of values for Canada. One of the fundamental values of Canada under a Poilievre government would be value for money, yet this procurement report did not show that this was so and did not show that this work was always conducted in an ethical manner. If this is being conducted in this manner at the very heart of our foreign policy, that's a problem.
Canadians deserve answers from the chief diplomat—from the Minister of Foreign Affairs. We need to bring her in here to be held to account for what this incredible audit team uncovered. I think it's very important as it serves as a beacon not only within the government itself currently—to show that they are willing to account for their work and improve upon it—but at the very foundation of our values here in Canada.
Global Affairs Canada is supposed to act as a guiding light for the rest of Canada. In this instance, that was not the case. We need the Minister of Foreign Affairs here to account for that
Thank you very much.
Thank you, Mr. Chair.
It's great to hear that we acknowledge the work of the internal audit team at GAC. I echo that statement, but I think the rest of it was political.
The good thing is that the internal team did a great job and it was proactively and publicly released. This was an internal audit focused on low-dollar-value items. The ministers—plural—did not have any involvement in approving the low-dollar-value items. However, having an opportunity to ask questions and gain an understanding of what those low-dollar-value items were was a great idea, as was having an opportunity to talk to those who authorized them.
By the way, there are three ministers as part of GAC, and we are not sure why—aside from the political reason—Minister Joly has been highlighted here. There is the Minister of International Development, the Minister of International Trade as well as the Minister of Foreign Affairs. All three ministers are part of GAC, so selecting one minister as opposed to the others for an area for which they have no signing authority or were not engaged in signing authority is questionable.
We would gladly invite the officials to come and give us an understanding and a breakdown of these. They are publicly released so it would be a good opportunity for us to look at what types of contracts there were, what the purpose was and how many of the low-dollar-value contracts were under one theme.
After that, if we see any trend that points to a specific ministry, then we would be open to having senior officials come. If that brings to light any type of ministerial involvement, then we'd be glad to support a motion to bring the ministers.
Therefore, given the way it's drafted, we will not be supporting this motion—at least I won't be supporting it. I believe the approach that we should take is to first of all commend the internal audit group, as I believe everybody is doing, and get an understanding of the scope of the audit. Since it's publicly shared, there's a great opportunity for us to all look at it and then have the procurement department within GAC come in and explain.
Then, if we needed to, we would be able to move into having officials at the next level and then—although I doubt it—we'd be in a position to look at any ministerial involvement, unless we vote on this and we vote it down—or at least I would vote it down—or we could look into amendments.
Thank you, Chair.
This is the typical approach of Liberals to try to bury the necessary accountability. Let's start with establishing what the principle of ministerial responsibility is about.
Ministerial responsibility means that the minister takes responsibility for what happens at their department. If there are problems, those problems may relate to decisions that they were not directly involved in, but nonetheless they are responsible for establishing a culture and protocols through which there is respect for taxpayers' money.
The Liberal member across the way was kind of dismissive regarding these concerns, saying that what we're talking about here are low dollar values. This audit—
—I was just highlighting the fact that it was a low dollar value, and I said it is worth it to bring the officials so they can explain. It was not dismissive. Thank you.
Thank you, Chair.
That was not a point of order, and the members across should learn the rules both of contracting and of parliamentary committees.
As I was saying, the auditor has looked at a random sample of contracts—72—and 26% of them did not comply with the Financial Administration Act. Over a quarter of the contracts that were sampled just didn't comply with the law as it relates to contracting.
This is a massive problem and clearly a systematic problem. If there's a systematic problem in a department and we let ministers repeatedly get away with saying “Oh, well, those decisions are being made by other people”.... The minister is responsible for administering the department, and if there's a systematic problem, the minister needs to take responsibility for that problem, and for taking action to resolve that problem.
The Liberals just don't believe that they're accountable when things go wrong inside the government. We're not talking about a case of one or two bad apples; we're not talking about a junior public servant who, by themselves, independently broke a rule. We're talking about a systematic issue where over a quarter of contracts in the foreign affairs department do not follow the law. That's a situation where leadership is required and where leadership has to take responsibility, and as a parliamentary committee, yes, we should seek responses from those responsible for leading the department.
That said, I am interested in trying to meet Mr. Jowhari in the middle with his proposal. I'd like to move an amendment to the motion to say, “That the committee call the Minister of Foreign Affairs, Mélanie Joly, the Minister of International Development and the Minister of Trade to each appear for a two-hour meeting, and the deputy minister responsible for the report to appear for two hours.”
I think it reads fine from there. It is simply to add in the Minister of International Development and the Minister of Trade.
Hopefully that is an acceptable compromise for Mr. Jowhari, and we'll be able to proceed with that accountability.
[Translation]
I'd like to receive the amendment in writing in order to compare Mrs. Block's and Mr. Genuis' motions.
Thank you very much.
[English]
I think it just adds two ministers, if I'm correct. It adds the ministers of international development and international trade. There was no other wording; it just adds those two ministers to the motion.
Does anyone else wish to speak on the amendment?
Colleagues, I'm just going to suspend for a couple of seconds.
Thank you for your patience, everyone. We are back.
Mr. Genuis, I understand you wish to withdraw your amendment.
We need unanimous consent for that.
Some hon. members: Agreed.
(Amendment withdrawn)
The Chair: Thank you, everyone.
Mr. Jowhari, I see your hand up. Do you have an amendment?
Thank you.
First of all, I want to thank all my colleagues. I wish that Canadians could see the work that's actually happened over the last 10 minutes. In the background we had a very open and frank conversation, and we landed somewhere that is going to serve Canadians best.
I would like to amend Madam Kelly Block's motion by removing the line, “Minister of Foreign Affairs, Mélanie Joly, to appear for a two-hour meeting and the” and at the end add, “for a two-hour meeting, with the option to invite the minister if deemed necessary by the committee.”
I am going to read the whole motion again, with the amendment:
Given that a Global Affairs Canada investigation into government contracts found a failure rate of 26% and the report found that “the signed contract was not provided” and “one contract was approved 'by an individual who benefited from the transaction'”, the committee call the deputy minister and officials responsible for the report to appear for a two-hour meeting, with the option to invite the minister if deemed necessary by the committee.
[Translation]
Thank you, Mr. Chair.
When you say the Global Affairs Canada investigation, do you mean the departmental reports?
I'd like us to be clear about what is being proposed and what we will have to read about it. I saw it in the newspapers, but I haven't finished reading the departmental reports yet.
I'd like us to be specific, perhaps not in the motion, but verbally, so that we clearly understand where that investigation is coming from.
[English]
It was regarding an internal audit. I can send you the link in both official languages. It was a somewhat lengthy internal audit.
[Translation]
[English]
Thank you very much, Mr. Chair.
I believe that the amendment was to read, “the deputy minister of Foreign Affairs”.
My sincere apologies. You are 100% right.
I will read it once again into the record:
Given that a Global Affairs Canada investigation into government contracts found a failure rate of 26% and the report found that “the signed contract was not provided” and “one contract was approved 'by an individual who benefited from the transaction'”, the committee call the deputy minister of Foreign Affairs and officials responsible for the report to appear for a two-hour meeting, with the option to invite the minister if deemed necessary by the committee.
Thank you.
Are we all fine with that?
It is basically the original motion. It would be the auditors, the DM and then, as Mr. Jowhari originally said in his first intervention, if the committee deems necessary, we will loop back to the minister responsible.
(Amendment agreed to)
(Motion as amended agreed to)
The Chair: Thank you very much, everyone. I appreciate everyone working together.
I have Mr. Genuis and then Mrs. Atwin.
I have a point of order, Mr. Chair.
Mr. Garnett Genuis: I have a motion on notice that I'd like to move, and—
I'm just wondering if we're returning to the original speaking order that we had. I believe I was next.
I'm sorry. I probably skipped a part. I think we had considered the amendment, and the motion as amended had passed.
We're onto the next issue. I've recognized Mr. Genuis first, and then it will be you. You'll be up after Mr. Genuis.
Mr. Genuis, I apologize. Go ahead, sir—from the top.
No problem.
I have a separate issue that I want to raise. It's a motion that I have put on notice. I'll read it, and then I'll explain it:
That the committee, in relation to the opioid epidemic and toxic drug crisis in Canada,
(a) order the production of all contracts, agreements or memoranda of understanding to which the Government of Canada is a party, signed since January 1, 2016, concerning the purchase, acquisition or transfer of Dilaudid or any generic form of hydromorphone for use in any safe supply program, together with any related documents concerning the amounts, dosage and frequency of delivery of the hydromorphone to be used, provided that these documents shall be deposited with the clerk of the committee, in an unredacted form and in both official languages, within three weeks of the adoption of this order; and
(b) order the governments of the provinces and territories to provide, to the clerk of the committee, documents consistent with those described in paragraph (a), where that government is a party, within three weeks of the adoption of this motion.
Colleagues, I do want to say up front that I will spend a few minutes explaining the rationale for this motion. It's an issue that this committee, in the period that I've been on it, has not looked at in detail, but importantly, it is related to the mandate of the committee, the operations of government. It's a contract request, which is in keeping with some of the work we've done in the past. It does pertain to a policy area that is newer to us, so I want to lay out the rationale in terms of the context and why this particular request for documents is a high priority for me.
We have been discussing in various fora—of course, most notably in the House—the impacts of the opioid crisis and the impacts of the policy currently being advanced and pursued by, I think it's fair to say, the NDP-Liberal government working in B.C. especially, and considering exceptions to the Criminal Code in other areas. The policy that they like to call “safe supply” is substantively really something else. It's about giving taxpayer-funded dangerous hard drugs, which people are then permitted to use along with other dangerous street drugs, in public places—in hospitals, on buses, in public parks and in places where families, seniors, children and other vulnerable people are present.
This is the policy of the current government. They have allowed an exception to the Criminal Code in B.C. They're considering exceptions in other parts of the country that would allow public drug use of dangerous hard drugs. This is something that even the B.C. NDP has now called for substantial changes to.
There are a few different parts to their policy, but one part of this is the idea that for all Canadian taxpayers, the money they work hard to earn and are forced to pay to the government would be used to purchase dangerous hard drugs, which are then provided to people who are struggling with addiction. We don't support this policy. We think that for those who are suffering with addiction, a better policy emphasizes support for treatment and recovery.
That emphasis on treatment and recovery reflects a fundamental optimism about the potential of the human person. All people, regardless of the challenging circumstances they face, have the potential to pursue and benefit from recovery programs. The policy of giving taxpayer-funded dangerous hard drugs to people in this situation reflects a deep pessimism about people in that situation. It reflects, sadly, a belief in some quarters of this country that continuing to take dangerous hard drugs is just the best that can be hoped for in these circumstances.
I reject that pessimism. I believe we can and should work to bring our loved ones home drug-free.
I embrace that optimistic account of human potential, and that's why I believe in a treatment and recovery model. Sadly, for too long in this country, people who want treatment and recovery, and maybe those who kind of struggle back and forth with deciding on that path but make a choice to pursue that path of treatment and recovery, often find that such support is not available to them, so they're not able to pursue that path.
Wouldn't it be better if, instead of spending taxpayer dollars on giving dangerous hard drugs to people struggling with addiction, we invested those resources into treatment and recovery programs? There's the impact on the individual who is struggling with addiction, but then there's also the wider impact on the community associated with safe supply programs. It's important to say that this impact is not limited to the places or even the provinces in which safe supply programs, so-called, operate, and it is not limited to places where these exceptions to the Criminal Code apply.
I can say that we see in my province and in other parts of the country the impact of what's happening in British Columbia. Let me explain that a little bit.
In British Columbia, especially, the government is pursuing this policy of giving dangerous hard drugs to those struggling with addiction, and very often it's something called Dilaudid, which is a patented version of hydromorphone. I'll talk a bit more about Dilaudid in a minute.
We see a lot of evidence of what is called diversion. We know that, quite obviously, if somebody has a severe addiction to, say, fentanyl, chances are that if they're receiving free Dilaudid, or another form of hydromorphone, it does not satisfy the intensity that they're used to with the product that they have used in the past. What often happens—and I think there's considerable evidence to show this—is that individuals are able to receive those free, taxpayer-funded hydromorphone pills, which they sell to others. Then, they use that money to buy street drugs, fentanyl etc.
The effect then is that you have this expansion of supply, a proliferation of available Dilaudid pills that are then causing new addictions. They're more accessible. They're easier for people who are trying drugs for the first time to get access to. I think there's good evidence as well that they get taken to other parts of the country and that there is organized crime involvement in this, where there is a Dilaudid prescription.
Somebody receives the Dilaudid. They sell it. They buy their drug of choice, and then organized crime delivers that Dilaudid product to somebody somewhere else in the country. Organized crime is making money off that, and they're benefiting from the taxpayer subsidy that's going into that original drug.
The effects of this are very significant in the Lower Mainland, but the effects are not limited to the Lower Mainland. These policies of taxpayer-funded dangerous, free drugs lead to a significant increase in supply in general. We're flooding the market with very dangerous drugs, and it makes those drugs cheaper and easier to access for people who haven't used drugs before. This is a very dangerous effect of the policy being pursued by the NDP-Liberal government.
We have public drug use. We have diversion. We have increasing harms, increasing addictions and increasing overdoses. The social effects of this policy are significant. I've talked about the impact on the individuals who are struggling with addiction. We've talked about the wider impacts on the community and the impacts on vulnerable young people who are maybe receiving these diverted Dilaudid pills. We see in general how there's been a backlash against these policies because many people are hurt by them.
Let's also acknowledge a reality on the other side of it: that while there are many people who are hurt by these NDP-Liberal drug policies, there are a few people who benefit from those drug policies, and that is, in particular, those companies that are involved in producing the drugs, which are then purchased with taxpayers' dollars and made available. That is, I think, fairly obvious. If you're in the business of manufacturing and selling opioids, then the greater use of your product, especially with the taxpayer being willing to...well, it's not the taxpayer being willing to, Chair, but the person responsible for dispensing taxpayer money being willing to purchase large quantities of those drugs and give them away for free.
While that might be bad news for communities and for individuals affected, on the other end of this it's good news for the bottom line of the companies. They potentially have an interest, then, in perpetuating policies that allow them to continue to sell more of their product and to sell more of their product specifically to the government. The sad reality is that a person struggling with addiction is a repeat and captive customer if you're in the business of producing and selling these dangerous drugs. We should be aware of the agenda of the pharmaceutical companies that are benefiting from these policies. It might be true in theory that a pharmaceutical company could put aside their self-interest and support treatment and recovery, but that would require a complete and rare suspension of any self-interest calculation.
The other thing when we look at the interests of the companies that are involved in producing and selling these products is that I think we should reflect on the history of how these companies have operated in the past. This really goes back to the first wave of a kind of opioid legitimization. If you look historically at the opioid crisis, I think we can say that there have been two periods of corporate-driven opioid legitimization, with a kind of interregnum in between.
In the 1990s, we had the first wave of corporate-driven drug acceptance. At the heart of that was Purdue Pharma. Purdue Pharma produced a new product, which they aggressively marketed. They minimized the risks, and they did so for their own bottom line.
The history of this is that opium is the original opioid. There was a long-standing reluctance in the medical community to prescribe opium except in the most extreme circumstances. Purdue Pharma came along with their new product, OxyContin, a patented semi-synthetic opioid. They sought to create the impression that it was less dangerous than what was already on the market, but in many cases it was actually much more dangerous.
OxyContin incorporated a kind of controlled release technology. It was designed to facilitate a controlled release of opioid-related pain relief over a period of time, and that was supposed to create the illusion of less risk. This was manipulatively marketed, because OxyContin's controlled release mechanism was not tamper resistant: It could be modified easily to release all of its hit at once. It carried all the same risks.
In that context as well, Purdue Pharma made all kinds of clearly unfounded claims, minimizing the addiction risk. They made claims that were absolutely not supportable by the science, which they nonetheless promoted. They aggressively marketed OxyContin as the solution to not just acute pain, but also ongoing chronic pain. They called it the drug to stay with.
It was very successfully marketed and they made a ton of money in the process. I think it's worth remembering as well that this was intentionally marketed through the lens of minimizing stigma. They said okay, there's a stigma around opioids; we want to minimize the stigma around this new product so that people will buy more of it.
The result of this was that, at the very beginning it was a new product and there wasn't much stigma. People with different levels of short- and long-term pain were prescribed OxyContin. Then, because it was much more addictive than people had been led to believe, and because of the well known tolerance-inducing effect associated with opioids, people could just not get the same impact, the same level of pain relief, with the same doses.
The familiar story you'll hear from people with lived experience is often this. There was an initial event causing pain. Maybe it was a car accident, maybe it was long-running, unexplained chronic pain, and then opioids were prescribed in response. What followed was opioid addiction, as the individual went through a spiral of needing higher and higher doses in order to achieve the same effect. Then potentially, eventually, not able to get what they're perceived they needed in the context of pharmaceutical opioids, they went to street drugs.
This was the history of OxyContin and it's part of the wider history of Purdue Pharma and the Sackler family who owned Purdue Pharma. That family had a history of running various businesses that went back further than OxyContin, which involved simultaneous and conflicting interests in different pieces of the medical world. Members of the Sackler family ran Purdue Pharma, but they also were involved in a highly successful pharmaceutical advertising business involved in the publication of medical journals, medical education and in fact sponsoring a whole movement of greater so-called “awareness” of the epidemic of untreated pain, the idea of pain being a fifth vital sign.
All of this was marketed with the goal of being able to sell opioids.
There are various other examples of this. The Sacklers played a major role in the marketing, for instance, of Valium in the 1970s, the first wave of the overpromotion of benzodiazepines. I think we're seeing, sadly, another wave of the overuse of benzos today.
In any event, the Sacklers made this argument through Purdue Pharma about pain and stigma. All of that argument pointed to, “You've got to just buy more of our product. That product conveniently is problem-free and here we are selling this great product that's going to make us a lot of money and we're off to the races.”
We know the effects of that, though. We know that increasing the supply of opioids and removing the stigma around those substances was not the solution; it was actually the cause of a massive new problem. We have an opioid crisis today primarily because of the overpromotion and the lies that were told around OxyContin and that were subsequently maintained and promoted by Purdue and, I should say, frankly with the support of McKinsey, for as long as the charade could possibly be continued.
Let's fast-forward to today. One of the things we need to note about many of the current conversations and debates around the NDP-Liberal policy is the way that some of the arguments being made by people who support the expansion of the supply of dangerous drugs—funded by the taxpayer—actually mirror the original arguments made by the Sacklers through Purdue. Back in the 1990s and early 2000s, people said that if we took away the stigma around these substances and made them more widely available so that people could get them in response to their perceived need, we would solve the problem. The result was just a massive increase in supply and more people accessing these drugs, setting them up on a ladder to pursue more and more dangerous substances.
Today, we have people making similar arguments. They're saying we have this problem of addiction, and the solution is to reduce the stigma around substances and dramatically increase the available supply. In fairness, the intent is that they only be supplied to those with existing addiction challenges, but that's not the effect of the policy.
You can kind of see how the original failure is, nonetheless, being repeated, with the new program that is being pursued by the government today.
It's troubling for me that Dilaudid, the go-to, so-called safe supply product, is also a Purdue product. Not only are we seeing a repeat of the same kind of history and very similar arguments being made to justify overpromoting drugs and making them more available, but we're seeing the same company at the centre of it. We're seeing how Purdue Pharma is again making Dilaudid. This provides a significant benefit to their bottom line.
After all that happened with Purdue and OxyContin, the lies that were told and the disregard that was shown for human lives, why are decision-makers going back to the same people who substantially caused the opioid crisis in the first place, saying, “Now you can make this new product, which we're going to buy from you,” and thinking that's the solution?
The same justifications are being used. If we increase the supply of the drug, we're going to solve the problem, apparently. The same arguments are being used. The same company is being brought in to supply the products.
Are we really supposed to believe that this big pharma company, Purdue, after being compelled to pay billions of dollars in settlements in the United States...? We're behind on that in Canada, by the way. We Conservatives have been pushing that those responsible for the opioid crisis be required to pay the full compensation, and that all of that money be used to support treatment and recovery. We've been pushing for accountability for these companies in Canada.
However, in the midst of all that has happened, all that we know and all that has been spent, now this government is going back to Purdue to purchase Dilaudid. That should be troubling. It's troubling for me, and I think it's troubling for many Canadians as well, who are wondering about these purchases, potential conflicts of interest, what's happened in terms of lobbying and what kinds of astroturf organizations have been set up to advance the interests of these companies.
That brings us to the motion today and recognizing that the company that caused the opioid crisis, Purdue, is now producing Dilaudid, which is being purchased through government programs and provided to people. Supposedly, Purdue is the solution to the problem Purdue caused. We need, at a minimum, to see what is in these contracts to understand what was committed to, what was agreed to.
One of my biggest concerns in the context of these contracts is understanding what, if any, indemnification structures exist within them. We know that the last time Purdue was responsible for supplying dangerous drugs en masse to the public, they were significantly sued, and they had to pay billions and billions of dollars to compensate the victims. It may well be that efforts have been made to prevent that from happening in the future through some kind of indemnification structure. If these contracts include indemnification agreements that protect the companies that are producing these dangerous drugs from being accountable for their effects, I think the public would probably want to know that.
Mr. Chair, I'll just wrap up here in a moment, but I'll make a few summative comments. We all know and hear from, in many cases, our constituencies but also, in many cases, our own families about the devastation associated with the opioid crisis. This opioid crisis started because Purdue Pharma told lies, manipulated information and aggressively marketed a new semi-synthetic opioid product, minimizing its risks. A lot of people took it. A lot of people developed substance-use disorders as a result of that dangerous misinformation.
Then there was a period of increasing awareness around the problems of this, but now we've gone back into this period where some leaders—especially the policy leaders of this NDP-Liberal government—are pushing the idea that increasing the supply of dangerous drugs is the solution. Once again, they're claiming that more supply, that a more widely available supply of drugs, is fine and is the solution instead of the continuation of the problem. Also, the company that caused the opioid crisis in the first place is at the centre of supplying the supposed solution in Dilaudid. Once again, you have, in this new wave of corporate-driven drug overpromotion, the same company, Purdue Pharma, with a new, differently branded opioid product. This government is falling for it all over again.
I should say as well, Mr. Chair, that the motion does not specifically reference Purdue. It references Dilaudid, obviously, which is a Purdue product, but the motion also says “or any generic form of hydromorphone for use in any safe supply program, together with any [relevant] documents”.
I'll add briefly that I think we need to look, as well, at other cases, at other companies that are trying to get into this. I want to share one example of this. Some of you may have heard of a company called Fair Price Pharma. Fair Price Pharma is, I understand, run as part of a partnership involving Dr. Perry Kendall, a former B.C. public health officer. Dr. Kendall is involved in this company that is seeking to sell injectable heroin. He has been quoted as saying that heroin should be more available. For instance, he said in one interview:
I think it is inexcusable that it is not more widely offered in Canada. I can think of no other evidence-based, effective treatment for a life-threatening condition that is withheld from individuals who could benefit from it.
It is inexcusable and unethical.
He is saying that not making heroin more available is “inexcusable and unethical”.
Fair Price Pharma is led by someone who has been very involved in the public conversation around so-called safe supply programs. He continues to be very involved in public conversations around these so-called safe supply programs, but he is also leading a company that is trying to sell a product that is a very dangerous drug, which is ostensibly being marketed as, “Let's give away more dangerous drugs as a supposed solution to the problem.”
I was able to find—in public disclosures, by the way—that there have been extensive meetings between Fair Price Pharma and the federal government. These included two separate meetings with the former minister of mental health and addictions, Carolyn Bennett, and these meetings were to discuss regulatory pathways regarding diacetylmorphine, which is heroin.
Beyond the history of Purdue Pharma and the relationships, we know about the history of that company in promoting dangerous opioids. We can see as well this very Canadian example of a former public health officer who had a particular perspective and approach that he advocated when it came to drug policy. Now that he's out of that role, he is co-leading a company that is selling dangerous drugs and he clearly has regular access to the government as part of that effort.
We shouldn't pretend that in spite of all the harm that's being done by these dangerous NDP-Liberal drug policies there aren't some people who benefit. Those are the people who are making and selling these products. They're their shareholders. They're the high-priced lobbyists for these companies, who meet with government ministers. I would like this committee and parliamentary committees in general to do more work to try to uncover some of the relationships that have existed between these bad, dangerous, harmful policies and some of the corporate actors who have benefited from them.
There have been various people in the media who have done great work digging into this and finding out various parts of it, but it's work that is, obviously, constrained by public disclosures. If some of these corporate actors were creating and funding astroturfing organizations that pushed a message that served their corporate interests, of course, there would be almost no way of tracking that, short of making document production requests.
This committee has unique powers to do that, and these motions are important for getting to the bottom of how these dangerous, harmful policies that serve narrow corporate interests but hurt communities are actually being formulated and coming about.
I hope we will be able to order the production of these contracts. I did warn you in advance that I would have a few things to say on this subject, but I will wrap up my comments there.
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