Welcome to meeting number six of the House of Commons Standing Committee on Government Operations and Estimates.
The committee is meeting today from 6:34 to 8:34 to hear from the Minister of Public Services and Procurement, and the officials, on the main estimates for 2020-21.
The committee will meet next Wednesday, on November 18, from 3:30 to 5:30 and will hear witnesses as part of its study on the Nuctech security equipment contract. Officials from Public Services and Procurement Canada, Global Affairs Canada and the Communications Security Establishment will appear on that day.
Pursuant to the motion adopted by the House on Wednesday, September 23, the committee may continue to sit in a hybrid format. This means that members can participate either in person in the committee room or by video conference, via Zoom.
To ensure an orderly meeting, I would like to outline a few rules as follows.
Interpretation in this video conference will work very much like in a regular committee meeting. You have a choice at the bottom of your screen to select the floor, English or French. Before speaking, please wait until I recognize you by name. When you are ready to speak, you can click on the microphone icon to activate your mike. When you are not speaking, your mike should be on mute. To raise a point of order during the meeting, committee members should ensure that their microphone is unmuted and say “point of order” to get the Chair's attention.
In order to ensure social distancing in the committee room, if you need to speak privately to the clerk or analysts during this meeting, please email them through the committee email address.
You should all have received the speaking notes that were distributed 20 minutes ago, including the speaking notes from the minister.
I will now invite the Minister of Public Services and Procurement to make her opening statement.
Minister, go ahead.
Thank you so much, Mr. Chair.
It's a real pleasure and honour to be here with all of you this evening, which is my fourth appearance before this committee this year.
Before we start, I would like to take a moment to acknowledge that we are on the unceded territory of the Algonquin nation.
With me today are Bill Matthews, Deputy Minister of Public Services and Procurement Canada, James Stott, Assistant Deputy Minister, as well as other departmental officials.
Today, I am pleased to appear before you to discuss our requests for funding in the main estimates and supplementary estimates for 2020-2021.
In our main estimates, PSPC is requesting $4 billion. Just over $3 billion of that amount will be spent on property and infrastructure, including the parliamentary precinct. Of that, $316 million is for payments in accounting; $170 million for government-wide support programs including the Translation Bureau—merci beaucoup; $206 million for the purchase of goods and services; $4 million for the procurement ombudsman; and $281 million for internal services.
Mr. Chair, I will also address our supplementary estimates (B) in which we are asking for an additional $720 million, with the bulk of those funds supporting Canada's important response to COVID-19. For the last several months, PSPC has been working non-stop to procure vital PPE and other medical supplies for front-line health care workers. More than two billion individual pieces of equipment have been procured. More than half of that has been delivered. We are increasingly turning to competitive processes wherever feasible. Equipping health care providers remains our priority, but the needs for PPE are also significant especially as we approach and are involved in this second wave.
This is why the department launched the essential services contingency reserve. This emergency backstop allows organizations to apply for temporary, urgent access to PPE and other supplies on a cost recovery basis. Today, we are requesting $500 million in our supplementary estimates (B) to support this important initiative.
Additionally, our government has delivered to the provinces and territories more than four million rapid test kits in the last few weeks. This is from the total of 38 million rapid tests that we have procured to date.
We also continue to aggressively pursue vaccine candidates. Canada now has agreements with seven of the world's leading vaccine developers and has the most diverse portfolio of vaccine candidates in the world. We know that logistics associated with vaccine distribution can be complex, which is why we are not waiting to act. We are moving quickly on this. We have begun to put contracts in place for end-to-end logistics solutions.
Another priority is pay.
Mr. Chair, while our COVID-19 response is my number one priority, there is a lot of other important work taking place at PSPC.
On public service pay, I am pleased to say that we have made significant progress in stabilizing the Phoenix pay system and eliminating the backlog of transactions. As of October 18, the backlog of transactions with financial implications has decreased by 71% since the peak of January 2018.
Mr. Chair, I will now turn to another major file where work is continuing even through the pandemic, which is our portfolio of crown-owned real property.
Building on the successful completion of the West Block and the Senate of Canada buildings, PSPC will continue to advance important work on the Centre Block and the West Memorial building, which will allow it to accommodate the Supreme Court of Canada during that building's renovations.
I will note that through the supplementary estimates (B), we are requesting $285 million to support operations, repairs and maintenance across all of our buildings. Some of these funds will be used to increase cleaning services to keep employees safe throughout and after the COVID-19 pandemic.
I will now turn to the file on revitalizing science infrastructure.
Mr. Chair, at a time where we are all looking to the expertise of our public health officials to guide us through the pandemic, the work of the government's science departments and agencies is especially important to our daily lives.
As part of PSPC's work on the government's Laboratories Canada strategy is our long-term plan to revitalize Canada's science infrastructure.
We have asked for $101 million in our budget for expenses in this regard.
Mr. Chair, I have outlined some of the important work being led by our department, which has performed admirably during this pandemic. The portfolio is broad and diverse. The department's work is vital to support this government and all Canadians in many different ways, but especially during the COVID-19 pandemic.
I am so looking forward to speaking with you this evening and working with parliamentarians, our client departments, Canadian suppliers and the employees at PSPC to continue to respond to COVID-19 and provide other essential services to government and Canadians.
I would now be pleased to take your questions. Thank you.
Thank you for joining us today, Madam Minister.
I want to remind you that we are here to talk about the main estimates. We will see you again soon on supplementary estimates (B).
Minister, Davie shipyard is important to Quebec. However, it is still in the prequalification stage and we are awaiting final qualification for inclusion in the national shipbuilding strategy.
Will we have the answer before the end of 2020, yes or no?
I really appreciate the chance to have a conversation about this, because I have no idea who Frank Baylis is. I've never met him. I've never seen him. I couldn't pick him out of a crowd.
The point you are making is well taken. This process of choosing the ventilator companies, which would stand up domestic production at a time when Canada had no domestic production and there was global demand for ventilators, was initiated by ISED under its made-in-Canada initiative.
After an independent process of experts reviewed proposals and chose five suppliers, those suppliers were told to...our department at PSPC, and they continued to go forward with the contracts in this regard. Our government's priority was to build up domestic capacity, and that is exactly what we have done in this area to stand Canada in good stead, to have supply chains for ventilators, in response to urgent needs of the provinces and the territories.
I'll ask my deputy minister if he has anything to add.
First, I want to thank the minister for coming to our committee for the fourth time, and to thank the officials for joining her today.
I'd like to start with something that is certainly top of mind for folks right across the country. It's something I'm hearing about constantly, with the really good news that has come out recently about the Pfizer vaccine.
Minister, related to your comments earlier, I understand that you and your department have been working really hard to make sure that Canadians have access to a vaccine when it is ready. I was hoping you could give us an update on how this process is going.
This topic is of extreme importance to Canadians, and we are seeing every day the news, like we heard today from Moderna, coming out.
Let me just provide the context for our vaccine procurements for you and the committee. We have bilateral agreements with seven of the world's leading vaccine candidates, and access to another six vaccine candidates through the international COVAX facility.
This procurement process, which was occupying our attention very much over the summer months, guarantees Canada a minimum of 194 million doses, with options for up to 414 million doses. The agreements cover different types of vaccines: mRNA, protein subunit and viral vector technologies, in particular. The strategy was that we needed to make sure that Canadians had access to a diverse range of candidates, because at this stage we don't know which vaccine is going to cross the finish line—or vaccines, for that matter. We don't know which vaccine is going to get Health Canada approval, and so we need to make sure that Canadians have access to a diverse portfolio, and that's exactly what we did.
We're also working with manufacturing facilities here in Canada. We've invested $126 million in the Royalmount facility to ensure domestic biomanufacturing of vaccines. We've also invested in a Canadian supplier, Medicago, out of Quebec, to make sure we have a Canadian or made-in-Canada solution here as well.
This is a broad-based approach to vaccine procurement. It is ongoing, especially with the logistics now, but that gives you a snapshot of what we are working on at the current time.
It is a very good question, and I think it's a question on Canadians' minds right now.
I've already spoken about the importance of the regulatory approval process, and I want to to set out the stages that we are working on in the logistics process. After regulatory approval, we need to also think about biomanufacturing and fill-and-finish capacity here in Canada, because some vaccines may arrive in vat format that will require filling and finishing to occur here in Canada. Once that occurs—and we're hoping that we will have a Canadian facility here to do that to some extent in the Royalmount facility in Quebec that I mentioned—there's the distribution process.
As for your attention to the need for storage or refrigeration at -75°C for the Pfizer vaccine, that is part of the distribution process. We have put in place contracts for deep freeze and refrigeration to enable us to meet the needs of the vaccines made by Pfizer and Moderna. For example, we will have the ability to store 33.5 million doses at a time in the freezers for ultra-frozen and frozen vaccine storage that we just put in place last week.
In addition to the distribution of vaccines, we are also working on supporting the provinces and territories in the administration of the vaccines. In that regard, we have procured 90 million syringes, 100 million needles, Sharps containers, 90 million alcohol swabs, 75 million bandages and gauze strips. This is very much a collaborative approach with the provinces and territories. We are placing orders based on indications and orders that are coming from the Public Health Agency of Canada. It is not just PSPC deciding what should be ordered. Based on the vaccine task force and the Public Health Agency of Canada, we are putting in place the logistics and the distribution systems.
Thank you very much, Mr. Chair.
Thank you for being here, Ms. Anand.
As part of the national shipbuilding strategy, Irving Shipbuilding delivered the first of six new Arctic and offshore patrol ships to the Royal Canadian Navy on July 31, 2020. The total cost of the project is $4.3 billion.
The ship HMCS Harry DeWolf had an unexplained breakdown.
As part of the national shipbuilding strategy, do procurement agreements, and in particular the contracts with Irving, include terms and conditions to ensure that any performance issues are resolved quickly at the shipyard's, not the government's, expense?
Thank you for the question.
As minister, I take the contracts, every single contract, very seriously, including issues relating to the costs that Canadian taxpayers are bearing under this strategy.
By the same token, I believe that the NSS does offer significant benefits to the broader Canadian economy, so these are the things that we are balancing at the current time.
We are making sure that our investments in the AOPS for the Coast Guard are allowing the delivery of important services for Canadians and creating good middle-class jobs.
Thank you very much, Mr. Chair. Through you, let it be said that this honourable minister does not shy away from committee, and so I appreciate her repeated appearances before us. These are very important topics.
In her the opening remarks, the minister touted the government's seven contracts for COVID vaccinations. I would suggest to you, and all of committee in fact, that the vaccinations are the crux of our getting out of what could potentially be a third and fourth wave of COVID really crippling the economy. However, I'm still unclear about the difference between true purchase contracts—money down, paid up—and purchase options.
Can the honourable minister please explain why, on September 25, in the 's announcement of the new agreements, the language is always in terms of supplies “up to”, except for Pfizer, which actually talks about supplying a minimum dosage?
Out of these, how many of them are actually cash contracts in the agreements?
Thank you so much for the shout-out, MP Green. I appreciate it. I've been at committee four times in my first year of being a member of Parliament. It's amazing.
I used to teach contract law, so it gives me great pleasure to be able to discuss this particular topic with you.
In particular, we should note that under our agreements with each supplier, we purchased a base number of doses. From Moderna, for example, we purchased 20-million doses. We also built flexibility into our contracts to enable us, once we have approval from Health Canada or we see that a vaccine is extremely successful with a particular demographic group, to go back to that company and say, “Look, we have options in this contract, and we want to exercise them now.” Then they would sell us additional doses of the vaccine.
That's what “up to” means. The “up to” means that we have the ability to exercise additional options if we choose to do so.
In the interest of Canadians, regardless of how we ask the questions, we have to consider that we are talking about billions of dollars being spent and that this raises very important questions. We have a right to ask them and we are not going to let the Liberals answer whatever they want, however they want.
Now, Madam Minister, I would like to ask you another question.
When your Deputy Minister, Mr. Matthews, came before the committee on July 23, he said this: “When we were in sole source, we were looking at some key criteria: established supply chains, ability to deliver quickly at volume, and already in the business.”
The largest medical supply contract in Canadian history was given to Proline Advantage for medical gowns. I want to know whether or not this company is well established in the medical field.
The company did have a history of importing medical goods into Canada. They had a valid licence at the time the contract was awarded, and had one for a number of years. As part of the procurement process, they did provide sample gowns that were inspected by the Public Health Agency of Canada and met requirements.
I should point out, Mr. Chair, that these were level 3 gowns, which are the highest certification of gown available. It's one of the toughest ones to get your hands on, especially back in March, so we were quite grateful that they were able to deliver on that contract.
I'd like to welcome the minister and the department to our committee for the fourth time. Thank you for being readily accessible.
Minister, in your opening remarks you talked about a number of different programs and also mentioned that your department covers a lot of programs. You highlighted some of them, which was good to hear.
I'd specifically like to ask you about the PSPC's departmental sustainable development strategy 2022-23. PSPC was planning to power federal buildings with 100% clean electricity that would be available by 2022.
Minister, can you give us an update on where we are with finalizing the strategy, and how you're going to power the federal buildings with a 100% clean strategy?
That is discussed in my mandate letter from the , and is a priority for me as minister to do my part to green government and reduce our carbon footprint. I discuss that with our department frequently.
We are developing a strategy to power federal buildings with 100% clean electricity where available by 2022. We're still in development of this plan, but we are already retrofitting buildings, converting our fleet of vehicles to electric and hybrid vehicles and charging stations and, as you mentioned, converting our electrical system to clean energy to reduce the government's GHG emissions.
In addition, I want to mention the energy savings acquisition program. Through this GHG emissions program, we've already cut by approximately 30% since 2005. We aim for a total reduction of 63% in the national capital region with completion of the energy services modernization in 2025.
It is a priority for us. We are working on it. It is complicated, complex and multipronged, but we are working very hard on this strategy.
Thank you, Minister, and welcome back.
I want to get to the topic of PPE and forced labour. We asked you and your department in one of our previous meetings about how we can be sure that we're not buying PPE and other items made with forced labour.
The New York Times has reported that the number of companies in the Uighur territory making PPE has gone from five to 50. They have reported that PPE made with forced labour is being shipped to North America.
We asked your department, and the comment that came back back was that you have a two-step process. One, the companies self-attest that they're not using forced labour. The second one is that you ask them to certify that their first-tier suppliers comply, and also that they haven't faced criminal charges in that country.
The Liberal government's recent appointment to the UN, Bob Rae, called China out on its treatment of Uighurs as genocidal. In light of that, are you comfortable with your department's answer regarding the word of a genocidal country that they're not using forced labour to make PPE to sell to Canada? Do you find that acceptable?
I want to begin by saying that our government is committed to the Truth and Reconciliation Commission. It is committed to a renewed relationship with indigenous peoples, and I feel honoured that as the minister of PSPC I can play a role in establishing a relationship with indigenous suppliers.
We are developing initiatives to increase opportunities for indigenous businesses to succeed and grow. For example, through the pandemic, we awarded 26 contracts, worth over $73 million, to 21 companies. Those are indigenous-run businesses.
We've also run competitions specifically for indigenous businesses because we realize that it's very important for indigenous businesses to have access to federal contracting opportunities.
I am committed to increasing opportunities for indigenous businesses. I have, on my own team, hired a person who is responsible for indigenous policy and procurement. It is a priority for me, and I will continue to work on it.
I would also like to say, though, that it's not just indigenous businesses that I am concerned about. I am concerned about black-owned and managed businesses. I have reached out and held round tables with members of the black business community so that we can ensure that members of diverse communities across this country have access to procurement opportunities from the federal government.
I would also like to mention—and specifically because I know that MP Green has concerns about disaggregated data—that I, too, have those concerns. We have put in place an e-procurement system to enable us to glean data relating to indigenous and diverse suppliers. Data that we haven't heretofore been able to collect will now be able to be collected through the e-procurement system that we are piloting and that we hope to be using across government in terms of federal contracts.
Thank you for the question. It's been very important to me, and it will continue to be important to me as minister and as a visible minority minister at that.
Thank you, Mr. Kusmierczyk, for actually getting your questions and the answers done in the exact time of five minutes. I appreciate that.
Minister, thank you very much for attending today and answering the questions. I have tried to focus on the length of the question such that the answer would be similar in length, and I appreciate your attempts to do that.
I am going to take the chairman's prerogative very quickly, though, with a very quick question to you.
Has the NESS been fully restocked at this point in time?
That's a very interesting question.
I will say that the NESS is very important to this country. We need to make sure, especially in the pandemic, that we have PPE available. This eighty-twenty split that the has negotiated with the provinces ensures that 20% of all PPE procurements are retained in the national emergency stockpile.
In addition to the stockpile, we did create the essential services contingency reserve, so if it ever is the case that the NESS isn't fully stocked, we have a backstop of PPE available.
In terms of the actual availability of PPE in the NESS itself on this particular day, I apologize that I don't know the answer to that question, but I would be happy to follow up with my colleague and get back to this committee.
Thank you very much, Mr. Chair.
I'll speak slowly so that the interpretation can be done properly.
I understand my colleague Mr. Paul-Hus has reservations about the Proline Advantage contract.
I want to congratulate a company in my area, Tulmar Safety Systems. They had no experience in the production of medical gowns, but they have nevertheless entered into a contract with Public Services and Procurement Canada and the Hawkesbury General Hospital. I know that the doctors and nurses are very satisfied with these gowns, even though this company had never produced them before. Several small- and medium-sized companies have taken on the task of producing equipment for Canadians that wasn't available a few months ago.
My question is for Mr. Matthews.
I often ask questions about Phoenix. How are things going there?
I have had the pleasure of representing a number of public servants in the region. I think things are going well now because I don't get as many calls to my office about Phoenix anymore.
Could you please give us an update on Phoenix?
Vote 5 is capital funding for PSPC. Obviously we maintain the office buildings for the Government of Canada, but there is also infrastructure—bridges, dams and things of that nature, and even Parliament Hill—so you have a lot of money in the capital vote. It is the biggest part of our budget.
When you compare this year's main estimates to last year's, it's not exactly a fair comparison because the year before was a bit of a special year in that they added a special budget implementation vote, so that skews the comparison a little bit.
In fact—and Wojo, please jump in—we're pretty much in line with last year in terms of vote 5 with some adjustments, because we are increasing activity on the West Memorial Building to get ready for the Supreme Court to move in there as its temporary home. We have reduced some funding on the parliamentary precinct because we've completed some major projects there.
Those are the two real highlights I'd stress.
Wojo, is there anything further you want to add?
Yes, but these are two rather important and complex issues.
The move to telework, I think, accelerates our plans. We had been moving to work zones in which unassigned seating was more of the norm, to recognize that people weren't always in the office. I think the COVID experience has convinced us that we're on the right track, but we certainly need to make some adjustments to how we arrange office space in the future to allow for more telework.
On your second question, around ventilation, I would say that for our buildings, we will follow the guidance of public health and safety. If the health advice requires us to change ventilation, we will, but as far as I know, at the moment we comply with all health and safety regulations.
I have a couple of thoughts here, Mr. Chair.
I'm hearing a real echo. Is everyone else getting an echo from me as well? I'm not sure if they can do something technically with that. I'm sorry, but it's driving me crazy.
I think it's better now.
On the vaccine front, I love the member's optimism, but we have to remember that no vaccines have yet been approved for use in European or North American countries. The whole purpose around this diversified portfolio of vaccines was based on an assumption that not all of them would get across the finish line, and that is indeed the experience with vaccines historically.
We got some great news recently from both Pfizer and Moderna, which have things looking very optimistic but they not yet been approved for use.
Canada is a partner in the COVAX Facility, and there are options there to support others. If there are in fact excess doses for Canada, if all seven suppliers were able to get across the line, Canada would have options in terms of what to with those additional quantities.
Thank you very much, Mr. Chair.
Thank you very much, Mr. Matthews, for your appearance today and your responses to a number of interesting questions.
COVID-19 has shone a spotlight on the importance of Canadian ingenuity and engineering when it comes to the production and procurement of PPE, medical equipment and whatnot. At the same time, it's also shone a spotlight on the importance of basic research.
I know that in the departmental plan, you state that, “In partnership with federal science-based departments and agencies, PSPC will advance the government's commitment to strengthen federal science by creating world-class collaborative science facilities.” I know the minister alluded to that in her opening remarks today.
Can we get a sense of the types of science facilities we are talking about and perhaps get some information on the timelines and where we are in that particular process?
Last year's number was $1.278 billion. This year's number is $1.587 billion. The increase is about $309 million overall. In terms of the main categories or the main drivers of that, it's really in what we call “predictable” capital funding. That's very much around our property portfolio. That's where the bulk of that is. This year it's $547 million, which is by far the largest number. That's an increase of about $307 million over last year.
As the deputy indicated, one of the challenges is that the numbers aren't quite an apples to apples comparison, because some of the numbers last year were mixed between vote 1 and vote 5. This year's numbers are more pure in terms of the vote 5 number, so $547 million is a pure number.
I'm not sure, Mr. Chair, if that covers it.
It's a couple of puts and takes. The most obvious ones to mention would be the federal labs initiative as an increase, which we talked about already from the federal laboratories.
On Terrasses de la Chaudière, there was some work there, and on the West Memorial Building, which will be the temporary home of the Supreme Court. These are just some highlights of some of the ones that are causing increases.
It's decreased by a reduction in the long-term vision and plan for the parliamentary precinct because we completed some projects there, the Senate being one of them, and the first phase of the visitor welcome centre. Those are partial offsets to decrease....
That gives you the highlights.
Thank you, Mr. Jowhari. I appreciate that.
Thank you, everybody, for the questions.
I'd like to thank the witnesses for appearing and answering the questions. It was greatly appreciated that you stayed for the extra 15 minutes and were able to answer all of the questions for us.
For all those who indicated they were going to provide us with further information, if you would provide that to the clerk in a timely manner, it would be greatly appreciated.
With that said, I'm going to ask the committee members to stay on briefly. We have a little business to deal with quickly. While the witnesses are signing off, we'll take about five seconds and reconvene here very quickly.