ETHI Committee Meeting
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Standing Committee on Access to Information, Privacy and Ethics
Tuesday, February 7, 2023
[Recorded by Electronic Apparatus]
Welcome to meeting number 56 of the House of Commons Standing Committee on Access to Information, Privacy and Ethics.
Today's meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022, and therefore members can attend in person in the room and remotely using the Zoom application. Should any technical challenges arise, please advise me. Please note that we may need to suspend for a few minutes as we need to ensure that all members are able to participate fully.
Pursuant to Standing Order 108(3)(h) and the motion adopted by the committee on Tuesday, January 31, 2023, the committee commenced its study of the subject matter of the report of the Conflict of Interest and Ethics Commissioner entitled “Ng Report”.
I would now like to welcome our witnesses.
With us from the Department of Foreign Affairs, Trade and Development is Mr. Rob Stewart, who is deputy minister of international trade. As well, we have Mr. Daniel Pilon, director general of procurement and asset management.
Mr. Stewart, you have five minutes, sir. The floor is yours.
Good afternoon, members of the committee. Thank you for inviting me to appear before you today.
As the chair said, my name is Rob Stewart and I am joined by my colleague Daniel Pilon.
Today, I will give you an overview of Global Affairs Canada's overall role in the awarding of contracts and of how we make payments for services once they have been provided. I will also provide a high-level overview of the process the department followed in awarding and paying for the Pomp & Circumstance contract requested by the minister's office in April 2020.
Like all departments, Global Affairs Canada and the ministers' offices of the department have the authority to award contracts up to a certain value, as outlined in the government contracting regulations and the Treasury Board contracting policy, now known as the Treasury Board directive on procurement.
When officials in the department or exempt staff from a minister's office have delegated financial authority and make a decision to obtain goods and services from the private sector, they send a request for a contract to the departmental procurement staff. The request includes a description of the work to be performed, and depending on the dollar value, a supplier may already be identified.
Depending on the nature and value of the request, the procurement office may then undertake several different contracting steps to award the contract. These might involve a sole-source contract or a more formal competitive bidding process. These decision points and the contracting processes and procedures that departmental staff follow are outlined in the policies I have mentioned.
Once the contract is awarded, the minister's official or exempt staff member who requested the contract is responsible for monitoring the supplier's performance to ensure that goods and services are provided in accordance with the contract and to the requester's satisfaction.
Upon receipt of an invoice, the delegated person certifies that the services have been received and approves payment of the invoice. This invoice is then forwarded to finance staff, who process the invoice and issue payment to the supplier.
In the particular instance of the contract with Pomp & Circumstance, the initial request for media training services was sent to procurement staff by the chief of staff to Minister Ng. The chief of staff was the minister's office staffer with the appropriate delegated authority to make such a request.
As the proposed amount of the contract was $16,950, the procurement staff determined that the value was under the sole-source threshold of $40,000. The procurement staff therefore proceeded to award the contract following sole-source procedures.
Once the contract was drafted and signed, the minister's office then worked with the company to obtain the required services. Once the services were delivered, an invoice for those services was received, verified, and approved by the minister's office and sent to Department of Finance staff for processing. Payment was then made in full to the vendor.
I will now gladly answer your questions.
For the first round of questioning, the six-minute round, we're going to go to Mr. Barrett.
You have six minutes.
Mr. Stewart and Mr. Pilon, thank you for joining us today.
How many communication staff do you have in your department, Mr. Stewart?
Do these staff provide services like digital products and things that, perhaps, the minister would present in meetings? Do they provide digital products that would be posted on social media?
minister is working? Would they deal with media here in Ottawa and prepare the minister for interactions with the media?
minister before she scrums or before she does a press conference.
minister, and the primary responsibility rests with the minister's staff.
minister in those cases.
minister operates with in her communications apparatus?
Do those staff, to your understanding, perform other functions, other than preparing the minister for media interactions?
Are they competent to execute their job functions?
I would take the opportunity to point out that the Department of Global Affairs serves three ministers, so it has a fairly extensive communications department that covers a lot of ground in terms of issues, products and services.
Minister Ng are also professional and competent in the execution of their duties?
Do you know of other examples of the contractor that's referenced in the “Ng Report”, Pomp & Circumstance? Do you know of them providing services to other government departments or ministers?
What would the process look like if there was awareness by a deputy minister that their minister...? I'll pose this as a hypothetical, because my understanding is that you were not Minister Ng's DM at the time she procured the services of Pomp & Circumstance. Is that correct?
Is there a process that is established, or would that be a conversation that the DM has with the minister? What would that look like?
In the unusual event some circumstance arose, as a deputy minister, my job would be to serve the minister to the best of my ability.
minister. Your answer seemed to demonstrate high competency and a suite of abilities that would satisfy the requirements the minister has.
Next we have Ms. Khalid.
You have six minutes, Ms. Khalid.
Thank you to the witnesses for being here today.
Maybe I will pick up from where Mr. Barrett left off with respect to the context in 2020. What was it like in Global Affairs at the height of the pandemic as the government was rolling out more and more initiatives? What was it like within your department as you were servicing three ministers within the department? Also, how important is it for Canadians to have known about all of these services that were being provided to potentially millions of Canadians who lost their jobs?
What was it like? Can you help us understand?
I would make a couple of points. At the beginning of the pandemic, the atmosphere was quite chaotic. Decisions were being made very quickly. The government recognized that important measures needed to be taken to protect Canadians and to support them, and it was making those decisions on an almost daily basis. Here, I'm referring to things like border policy and economic supports for Canadian individuals and Canadian businesses.
I think that would have been true for the Department of Global Affairs, which at the time was dealing with an airlift of people who were living in Wuhan to begin with, but otherwise Canadians who were living around the world. It was a massive and very convulsive effort for the department to undertake at the time, in addition to communicating generally about COVID policy and the risks of travel.
Many departments were working collaboratively to deal with the situation and to come up with advice and implement new policy, so at the time it was quite inordinately busy, I would say, and very difficult for anyone to have a bird's-eye view of all the things that were going on.
Do officials also receive media communications training in your department?
What was the increase in media inquiries that were coming into the department during the pandemic? I realize you were not there, so perhaps Monsieur Pilon can comment.
We talked about the volume and the increase in work and in communications products being handed out. What is that work like now? What does the communications capacity look like right now within Global Affairs?
While Mr. Green goes out and gets them donuts—
Some hon. members: Oh, oh!
The Chair: —we're just going to suspend the meeting until we fix this problem, because we have to make sure that the health and—
Mr. Matthew Green: Now that the door is closed, they're signalling that it's okay.
The Chair: We have to wait for the clerk. She was looking to see what the problem was.
A voice: I was getting flashbacks too.
Mr. Matthew Green: Pierre got them coffee. It's all good.
The Chair: Ms. Khalid, I did stop your time. You have roughly 40 seconds to go.
Mr. Villemure, go ahead for six minutes.
I thank today's witnesses. My questions will be a bit more technical.
What criteria are used to designate a company as a sole-source supplier?
On the other hand, if a manager submits to us a request to award a contract that specifies the name of a service provider, there are no regulations preventing the contract from being awarded to that provider and the value of the contract does not exceed $40,000, we are inclined to grant the manager's request and award the contract to that provider, particularly if the manager has already determined that the provider is capable of providing the required services.
minister's office—I think it was her chief of staff.
Do you think the people who have to decide whether a sole-source supplier meets the three criteria have sufficient training?
When this group receives a request from a client, which could be anyone in the department, a contracting officer works with that client to select suppliers and determine the contract award strategy.
So there are people in charge of checking if there is a conflict of interest.
Mr. Stewart, I have several short questions for you.
What is an interest?
What is an interest? What is a conflict? What is a conflict of interest?
In your administrative unit, would these three questions be spontaneously answered, with regard to the act?
I would like to point out that the regulations governing the awarding of contracts within the public service make no mention of the concept of conflict of interest. That concept falls under a different statute, the Conflict of Interest Act, which applies to people like me, who are Governor in Council appointees.
The policy that applies to public servants has principles that we must uphold, such as fairness and integrity.
During the review process that officials must follow before approving a contract, it is—
Basically, a conflict of interest is the sum of these things, which are undefined.
It would be difficult to distinguish between a conflict of interest and a confusion of interests.
We are talking about theory, and not about a specific case.
Thank you, I have no further questions.
Mr. Green, you have six minutes.
From that perspective, I'll start with you, Mr. Stewart. In your role in senior leadership, how do you view your responsibility for supporting ministers to prevent them from entering into conflicts of interest? Is that something that is within your role as a senior adviser to ministers?
Mr. Pilon, under the purview of procurement, we've heard, I think, some basic introductions into how your work works. Is it part of your responsibility to help, to assist, those who are procuring to avoid conflicts of interest?
Ms. Ng's participation in the decision to award the April 2020 contract to Pomp & Circumstance is clear”. I think it's clear, based on the findings of this report. We both agree that Minister Ng basically initiated this contract.
While there are departmental officials involved in the execution of these contracts, the material decisions to pick the supplier in a sole-source contract, to determine the contract price and value, and to tell the department to write up the contract and at the end to approve payment all rest with, in this case, the minister's office.
Are both of you aware of the Conflict of Interest Act and its obligations?
Were you aware of a potential for conflict? Were there any red flags raised within either of your departments?
minister's office and executed by the procurement office in the department.
In the briefing in preparation for this meeting, was there anything in that book of yours that would have documented anybody within your departments who would have raised a red flag?
Is that a deficiency in the act or in the people who are within your departments and going through this process?
However, that is not a question we asked then or—
minister and her office.
My last question is about the second contract for Pomp & Circumstance. Given that the first one was awarded in March, was there any hesitancy whatsoever in awarding that second contract on the sole-source procurement of it?
I'll wait until my next round. I see I'm at six minutes.
That concludes our first round of questioning. We're going to go to our second round.
I forgot earlier to welcome Ms. Lantsman to the committee. Ms. Lantsman, welcome.
You have five minutes. The floor is yours.
Thank you, Deputy Minister Stewart and Mr. Pilon, for joining us.
I'm going to pick up right where Mr. Green left off, but first I want to know something from you, Mr. Stewart. I know you weren't there at the time as deputy minister; that's been well noted. In your time and your career throughout the public service—we know you've been at other departments—has it been unusual to have a sole-source contract of this nature for communications that was initiated by the minister and carried out by the department? How many, would you say, have you seen throughout your career?
No, I was not privy to the operations of the minister's office and indeed to communications in a more specific sense.
Is it unusual to see a sole-source contract for communications help in a department with more than a hundred communications staffers and with an exempt staff of potentially four or five, initiated by the minister and carried out by the department? Is that unusual?
There was a very brief mention made that there was an examination being undertaken by the Ethics Commissioner, but only a mention.
That person then certifies that the services were rendered, and we proceed from there—
I'm asking whether there are points around the services rendered. Were any materials shared? Was there actually a service given, given that the minister asked for this contract as a sole source, which is unusual in your view, and then it was confirmed by the chief of staff to the minister, who is an exempt staffer?
I just want to make sure that we have that straight.
What I can say is that the scope of work as outlined referred to media sessions for ministerial staff.
In that scope of work, there was an outline of certain things—and I'm going by memory. There was a description of the services outlining what exactly would be delivered. This is what was confirmed by the chief of staff afterwards.
Do we, as the Government of Canada, do anything else at a departmental level to check whether services were actually rendered for the amount of money that was paid to this sole-source contractor that was asked for by the minister?
Mr. Fergus, you have five minutes.
Mr. Stewart and Mr. Pilon, I would like to thank you, as well, and acknowledge your long-standing work in serving Canadians.
Mr. Pilon, I have several questions for you.
You say you have a long history of working in procurement and services in the federal government. How many years have you been doing that?
You mentioned that you have worked in a number of government departments or agencies—I assume more than two or three.
As you said in response to one of my colleagues, you've seen sole-source contracts that come from a minister's office. Does your current department, Global Affairs Canada, award sole-source contracts, as well?
I can't give you the exact proportion of sole-source contracts right now, but we can provide that information later.
I'm trying to figure out if we're talking about only a few dozen such contracts.
Mr. Stewart, thank you again. I congratulate you on your long career in the public service, as well, and welcome you to the Department of Foreign Affairs, Trade and Development. I worked there over 25 years ago.
During the process of awarding this particular contract, did you see anything that you had not seen before in other departments during your long career? Were there any unusual problems?
However, one thing I have observed that I think needs to be mentioned is that public servants who are involved in awarding contracts, and public servants in general, are required to undergo training on the application of the Financial Administration Act, particularly the famous sections 32 and 34. Section 32 prohibits the awarding of a contract without the necessary funds. Section 34 is designed to ensure that the contract has been fulfilled as intended. All public servants are required to take that training. However, staff in ministers' offices are not.
Mr. Villemure, you now have the floor for two and a half minutes.
Mr. Pilon, I'd like to give you a little bit of advice: when there is a conflict of interest, even if the person leaves the room, their influence remains; you have to be careful about that kind of thing.
Mr. Stewart, as I understand it, there was no red flag, and no such process was put in place. Do you believe that putting such a process in place would be a good thing?
Being subject to the provisions of the Conflict of Interest Act yourself, do you believe that those who are subject to it are sufficiently well informed?
In the case of a minister, for example, shouldn't there be an additional step? The commissioner talked about a conflict of interest filter. In a way, that would ensure that these people are well protected.
My colleague talked about a number of elements and, over the years, we've often talked about WE Charity. Without getting into the topic of the appointment, do you measure the impact of your actions on the public's trust in government processes and government?
So it's not part of your role. But one can imagine that it still impacts public trust.
Do you think the act should be amended to make ministers' office staff subject to it?
I have no further questions, Mr. Chair.
Mr. Green, you have two and a half minutes.
Monsieur Pilon, you're aware, I'm sure, that when MPs make a purchase, when we are paying vendors and submit invoices on the financial portal, a pop-up comes up to make sure it's in accordance with the procurement. Are you aware of that?
I will put on the record that I think it's a tremendous waste of your time to have to be here to defend something that you really had nothing to do with. The context matters, but I'd much rather have you doing the work that you're doing in your ministries.
From your perspective, do you think there could be a benefit to having, within the checks and balances of ministerial procurement, pop-ups or attestations that would go on the record in advance and ensure that what they're doing is in accordance with the Conflict of Interest Act?
I want to allow you the opportunity, Mr. Stewart. You answered, and I appreciate that. I imagine you're a guy with a lot of ideas. I would love to give you the opportunity right now to share any recommendations you might have that could be for our consideration on ways in which we might be able to improve upon the compliance mechanisms for the Conflict of Interest Act.
It also makes sense to me for people who have delegated authority in ministers' offices to get the training on sections 32 and 34 sign-offs that they need, because those sign-offs are the ones that embed public sector values and ethics and respect for contracting principles of fairness and integrity.
Thank you very much, Mr. Chair.
Mr. Dalton, you have five minutes.
Mr. Stewart, when did you become the deputy minister for international trade?
Last year, you were testifying about the implementation of the Emergencies Act, and you said that the Minister of Public Safety was misunderstood when he said in his comments that the police asked for the implementation of the Emergencies Act. That's something they deny.
The Ethics Commissioner says that Minister Ng has violated the ethics code. Do you think the Ethics Commissioner has misunderstood what the minister has done?
Minister Ng was in violation of the Conflict of Interest Act.
There have been many less serious situations when ministers have stepped down. One that comes to mind when the Conservatives were in power was when one of our ministers had a $16—or maybe it was $18—orange juice. It was just about public perception and propriety.
Just from the nature of your comments so far, it doesn't seem that you have any thoughts about whether or not the minister should resign.
Since the ethics breach by the minister has come to light, Liberal minister Ahmed Hussen used $93,000 in constituency funds—
Mr. Dalton, I would remind you that we are here to deal with the “Ng Report”. Please keep it relevant.
This was a very similar situation, and I think it's very pertinent to what has happened here that $93,000 in constituency funds.... I will remind members that our budget is approximately $400,000, so it's a little less than a quarter of the budget, and I recognize that the Liberals find this a bit touchy—
Again, stay on some relevance here, Mr. Dalton.
This is what we're seeing across the board, and this is our concern. One of the reasons why we pushed for these meetings right here with Minister Ng is that this is not a one-off. This seems to be across the board. It's very concerning.
Right now, we've just unanimously passed a motion on looking into the contracts to McKinsey, for $100 million, so we seem to be in agreement that there are some problems—
Mr. Dalton has the floor. He has the ability to bring this back, I hope, given that we are dealing with the “Ng Report”. I am going to give him some latitude here to bring this back very quickly.
We have multiple points of order. I've stopped your time, Mr. Dalton.
Go ahead, Mr. Green.
I would suggest that the constant interruptions are often perceived as a tactic rather than a bona fide point of order. If members want to create a point of order, I would challenge them to come up with ones that are closer to the Standing Orders.
I will say that we have to stay relevant on the issue. I'm going to ask Mr. Dalton to bring this back around to the issue we're dealing with, and that is the “Ng Report”.
Mr. Fergus, go ahead, please. Is it on the same point?
When we passed our motion to examine the “Ng Report” here at committee with my friend, Mr. Barrett, and we talked about this, the record will show that we made a commitment to focus on this issue alone, and that we wouldn't bring up other issues.
That's the only reason I'm raising this. Mr. Dalton wasn't at that meeting. Welcome to the committee, Mr. Dalton. I hope you'll enjoy your time here.
Mr. Chair, I do appreciate your trying to bring this back to the issue and to the study at hand.
I'm sure Mr. Dalton will bring this back.
Go ahead, sir. You have a minute and a half.
We are the ethics committee. We're talking about contracts and about some serious breaches. I'm speaking about a trend. That's one of the reasons I brought this up. We're talking about this one minister who has spent a very significant amount of his budget on social media. We are seeing the same thing here with the Liberal minister's friends, very close friends, I would add. We have also seen this with McKinsey. We're hearing more about Liberal cabinet ministers and their staff, and how they're awarding contracts to relatives and friends.
Do department officials advise against this?
Thank you, Mr. Chair.
We have one more line of questioning, and that will go to Ms. Hepfner.
You have five minutes. Go ahead, Ms. Hepfner.
Thank you, Mr. Pilon and Mr. Stewart, for being here and for answering our questions today. You have been very fulsome in your answers, so I apologize in advance if some of these questions become a little redundant.
I'll take you back to 2020, when we were in the midst of a pandemic. In particular, the international trade and small business department suddenly had a lot of programs to administer across the country. I think 900,000 businesses took the Canada emergency business loan.
Can you talk about the importance, during that time of a global pandemic, of the department having to suddenly communicate these new programs to businesses? Maybe you could comment on how big that task was. It had these new programs, and it needed to let people know about their existence and how they worked.
The other comment I'd make is that the effort to do that, to come up with ways of supporting Canadians, was the responsibility not of one department but of many. Indeed, some of these programs for business support were done largely through the Department of Finance, with other departments as assistants in that, including the Canada Revenue Agency. So there was a coordination question around communicating to Canadians that would have applied to departmental officials generally, to those who had to speak to the media in particular and to ministers as well.
Those are my questions.
Thank you, Chair.
Thank you to the committee.
Thank you to our witnesses, Mr. Stewart and Mr. Pilon, for being here. On behalf of the committee and on behalf of Canadians, I want to thank you for your work.
We are going to suspend for a bit, and when we return, we're going to return in camera so we can deal with the committee work plan going forward. We're going to have a busy time here discussing this.
The meeting is suspended for a few minutes while we move in camera.
[Proceedings continue in camera]