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Results: 1 - 15 of 408
Matti Siemiatycki
View Matti Siemiatycki Profile
Matti Siemiatycki
2015-05-28 16:32
I would recommend design-build type contracts. They are really in many ways par for the course in a lot of infrastructure projects, so we're already bundling that. Cost overruns are a major issue on megaprojects and getting a handle on that is really important.
I would say that bundling design, build, and finance for that initial construction period is quite a sensible bundle. When you have the operation and maintenance in the bundle, and the long-term finance, private finance is much more expensive because the risk profile goes down significantly after the construction period is over. Do you need that finance in there over the whole period? I would suggest that in Canada, we've generally been more sensible in paying out what are known as milestone or substantial completion payments to try to remove some of that financing at periods earlier on so that the government is not paying the much higher borrowing cost over the entire life of the project.
View Ed Komarnicki Profile
CPC (SK)
It would be fair to say, from what you're telling us, that there is a cost to management, there's a cost to finance, and anyone undertaking that project has to build that in. Presumably you'd want to calculate that somehow, or have someone crunch the numbers to say if that is advisable or not in this case. It depends, I suppose, on the capacity the municipality or city has to be able to manage long term.
Matti Siemiatycki
View Matti Siemiatycki Profile
Matti Siemiatycki
2015-05-28 16:33
I think the part that's problematic is that we don't have detailed studies of what the alternative is.
I did a study in 2012 that tried to look into this value-for-money idea. We looked for detailed studies of risks on past projects. This is basically about risk and the cost of transferring versus managing risk. We looked for the detailed studies that were the basis for the assumption that public-private partnerships control them. Those studies have not been done, and the Auditor General just confirmed that in his 2014 report.
It's like buying an insurance policy that you don't know the cost of. You don't know what your real upside risk is if those eventualities occur.
Matti Siemiatycki
View Matti Siemiatycki Profile
Matti Siemiatycki
2015-05-28 16:35
What I was getting at with my final point in my comments was that data is key. These projects put out a digital exhaust, a data exhaust. There is tons of information, and I think we could be using it to analyze performance and best practices. I think the federal government could play a much more information coordinating role beyond just P3s.
The idea of PPP Canada seems to suggest that P3s are the only innovative construction method. There are many others that bundle. There's alliance contracting. There's construction management at risk. There are all sorts of other mechanisms. I'd like to see their mandate broaden to be “Infrastructure Procurement Canada”, “Infrastructure Delivery Canada”, and then they could serve the role of collecting and compiling data across the whole country, so that we can be learning lessons not just about P3s, which are innovative and have the potential to deliver value under certain conditions, but across all types of infrastructure.
The final point I'd raise is that P3s are only for a small fraction of projects. What about all the other procurements that fall either below this size or don't meet the criteria. We still need to be delivering those projects effectively too, and I think the federal government could play an important coordinating, information gathering, and knowledge centre role in encouraging that.
Matti Siemiatycki
View Matti Siemiatycki Profile
Matti Siemiatycki
2015-05-28 16:47
It's the ultimate if. It's the big question. There's been a view that government doesn't do a very good job on this, and I think we could all point to projects on which they haven't done well. What we don't know is how we do not just on the sort of high-profile projects that have had huge failures but over the whole portfolio of infrastructure. Off the top of our heads, we could all pick the projects that have had terrible cost overruns, but how do they do on the whole portfolio, and could government actually manage that better if they became more skilled contract managers themselves, and I guess, could the federal government play a role in doing that? The cost of transferring risk is very high. It's not that there's no value; it's just that it's really expensive to do that. Could we come up in-house with ways of managing those risks better to try to save some of that additional cost?
Matti Siemiatycki
View Matti Siemiatycki Profile
Matti Siemiatycki
2015-05-28 16:57
I would first ask, who's evaluating the successful applications, and on what basis? I think when organizations are specifically focused on P3s, their lens is to look for projects that suit the P3 model. That can also encourage those who are doing the applications to try to tailor their projects to P3s. I think the group that's evaluating has to be independent from having a mandate to promote P3s.
In terms of other models, there are a variety of different approaches to delivering infrastructure. As I mentioned, construction management at risk is one that's gaining in popularity. That's more of an alliance type of contracting that starts early on in the process. That would be one. There are alliance types of contracting. There is design-build, which doesn't technically fall under private-public partnership but encourages the private sector to collaborate earlier on in terms of construction and design. That comes together much earlier on.
The key is to pick the right model for the right project. Then I think it's to have a group to evaluate these projects that's independent of one approach, whether it be traditional or public-private partnerships, to make both the studies and the adjudication on which one we should go with.
Philip Jennings
View Philip Jennings Profile
Philip Jennings
2015-05-28 11:41
Sure. It's actually a pretty long list of recommendations that were made in the Emerson report and we have an equally long list of responses from the government. I'll focus on some key ones.
I'll start with what was announced in the most recent budget, which is really a commitment to work with the Aerospace Industries Association of Canada and other industry stakeholders and provincial stakeholders to develop a national aerospace supplier development initiative, which is essentially tailored off a successful model called MACH, which is with Aéro Montréal.
The government has committed seed funding that would begin next fiscal year and the balance of the funding toward that initiative would come from industry. It's meant to develop a world-class supply chain in Canada. The funds are geared toward small and medium-sized enterprises, where we're trying, for one thing, to bring up their performance. A lot of the funding that's provided is really about trying to make sure that people can rate and understand their performance and they can take action on where they feel they're underperforming, as well as a rating system so that the larger companies can rest assured that when they're dealing with a certain supplier they have a certain rating in terms of the quality of their work, so they're more likely to take part in a supply chain that's either local or global.
Another key commitment that was made in previous budgets, which the deputy has spoken of to some extent, is the $30 million that was provided to the Consortium for Aerospace Research and Innovation in Canada. Again, that was modelled off a successful model in Quebec called CRIAQ. Emerson essentially said that the future of aerospace and for us to be competitive is based in innovation. That's really about trying to marry the research institutions, the academics, and the industry players in terms of making sure they can develop the R and D necessary for the future platforms in aerospace and space. That was launched already in terms of the consortium.
Another key deliverable was a recommitment to SADI, a five-year recommitment for $1 billion. There have been a number of very successful projects launched through that. I think since its inception 37 projects have been supported under SADI.
Another one announced in the same budget was $110 million for a tech demonstration program, which is, as I mentioned, under the automotive supplier innovation program and is trying to get at moving from basic research to commercialization. It's really about the government sharing in the risk in terms of making sure that companies make those investments that will be necessary for the future.
I should mention that Emerson also made recommendations that applied to other departments taking action. Two of them were in the procurement field in terms of defence procurement. For both of those, actions have been taken in terms of the defence procurement strategy. One of the key recommendations was that when companies bid for procurement contracts in Canada they should be offering an industrial package of investments that they plan to make in Canada and that will now be part of the bid selection process. That has now been implemented.
Another key one was with Transport Canada in terms of certification. Canada is viewed as a world leader in terms of how well we do our certification of aircraft. Emerson recommended that we continue to focus on that area to remain world class. Transport Canada is now consulting with industry on that.
View Diane Finley Profile
CPC (ON)
Thank you very much, Mr. Chair.
I am pleased to be here today to talk about my two departments' main estimates and reports on plans and priorities for the 2015-16 fiscal year. With me from Public Works and Government Services Canada are the deputy minister, George Da Pont, and the chief financial officer, Alex Lakroni.
From Shared Services Canada I'm joined by the president, Liseanne Forand, and Elizabeth Tromp, the acting senior ADM, corporate services, and chief financial officer.
Both PWGSC and SSC provide essential services to other departments and support our government commitment to creating jobs, growth and economic prosperity.
For the 2015-16 main estimates, Public Works' net spending is expected to increase by $30.6 million over the previous year. This is primarily due to the transfer of responsibilities to Public Works from the former Enterprise Cape Breton Corporation, as well as to the rehabilitation of the Parliament Buildings, including interim accommodation for the Senate.
For Shared Services Canada, the 2015-16 main estimates represent a total of $1.444 billion and show a net decrease of $127.8 million compared to the previous year. This is due mainly to savings achieved across various key transformation initiatives and a $63.4 million reduction in funding for partners' projects and initiatives.
Over the next year, PWGSC is looking forward to reaching several milestones.
Last week my colleague Tilly O'Neill-Gordon, member of Parliament for Miramichi, officially kicked off the construction of the new public service pay centre, showing just how far we've come on the transformation of pay administration initiative. The construction of this building will create an estimated 200 jobs in addition to the 550 employees currently working in the interim pay centre. In fact, by the end of the year, over 140,000 pay accounts will be administered at this new centre.
By consolidating pay services into a single building, we will generate approximately $70 million in savings each year starting in 2016-17. Obviously that's good news for taxpayers, and it's good news for the people of Miramichi.
Another great Public Works initiative with which you might be familiar is the build in Canada innovation program, or as we fondly refer to it, BCIP. Through this program our government is kick-starting Canadian businesses by helping them get their innovative products and services from the lab to the marketplace.
One of the biggest hurdles that companies face with new products is making that first sale. As you all know, it can be tough to get someone to take a chance on an untested product or service.
I've heard the story from business owners a hundred times that when Canadian companies try to sell their products internationally, the first question they're asked is if the Canadian government is one of their customers. Let me tell you, it is a pretty tough sell when the answer to that question is no. It's through this program the federal government acts as a first buyer of new technology. I'd like to stress that this is not a subsidy or a grant. Companies and their innovation are matched with government departments that could use their innovation to fulfill a business need.
But, the government departments are not just customers. After test-driving the innovation, they provide real-world evaluation and feedback to suppliers who can then make refinements. We hear all the time that companies find this feedback very useful.
Having made a sale to the Government of Canada, businesses can demonstrate the value of their products and services to potential customers in Canada and indeed right around the world. With 100 contracts issued since 2010, this program is a great boost to innovative Canadian companies.
We're also looking forward to making further progress under our national shipbuilding procurement strategy. Over the next month, Vancouver Shipyards will begin construction on the Canadian Coast Guard offshore fisheries science vessel. Irving Shipbuilding in Halifax will cut steel on the Arctic offshore patrol ship for National Defence.
The two shipyards are employing hundreds of highly skilled workers, while some 256 companies across Canada have already been engaged in contracts valued at $900 million. This is all thanks to our national shipbuilding procurement strategy, which is helping rebuild a strong Canadian shipbuilding industry and a marine industry that will create an estimated 15,000 jobs over the next 30 years.
This long-term approach to building ships will ensure strong jobs and economic growth, stability for the industry, and vital equipment for our men and women in the Royal Canadian Navy and in the Canadian Coast Guard. We are also looking forward to making further progress on our government's new defence procurement strategy.
This strategy marks the most significant shift in the federal government's purchasing of military equipment in 30 years.
It aims to achieve three important objectives: deliver the right equipment to the Canadian Armed Forces in a timely manner; leverage these purchases to create jobs and growth; and streamline our procurement processes. While we've made progress on the implementation of this strategy, I am looking forward to taking further steps to its implementation. Value propositions are beginning to be applied to procurements and will continue to be applied on a systematic basis going forward.
If I may, I would now like to turn to Shared Services Canada. SSC continues to modernize and consolidate our government's IT infrastructure.
Our data centre consolidation will also continue over the course of the fiscal year, as aging data centres are closed and replaced by a small number of modern, secure and highly efficient ones.
Fewer data centres will eliminate duplication, will standardize processes, and perhaps most importantly, will tighten security. We have established three enterprise data centres already and closed 57 data centres over the past two years. Savings of $14.5 million have been achieved already through consolidation and renegotiation of data centre contracts under economic action plan 2012.
In the course of executing this part of the plan, SSC has identified over 200 additional existing data centres, the vast majority of which are small rooms within office buildings. While we initially planned for 485 aging facilities to be replaced by no more than seven modern, secure, reliable centres, opportunities that include better-than-expected pricing and the use of cloud computing will allow Shared Services Canada to now consolidate over 700 data centres to no more than four or five by 2020.
SSC is also helping to modernize our telephone system by moving away from conventional, and quite frankly costly, desktop phones to cellular service or voice-over-Internet protocol phones where possible. Believe it or not, this has already generated ongoing savings of approximately $28.8 million a year.
The safety and security of Canadians continues to be one of the government's top priorities. Shared Services Canada is building a secure, centralized communications infrastructure that directly supports Canada's Cyber Security Strategy. SSC works closely with government security partners to protect government systems from cyber threats and intrusions.
As new products are brought forward, Shared Services will work with industry experts to identify best practices and approaches by providing secure, cost effective, and robust IT architecture.
SSC is making it possible to partner departments to achieve their priorities and better deliver services and programs to Canadians. The total amount the government has saved since SSC's creation is now $209 million each year. That's $150 million for the consolidation of existing services and the reduction of overhead, $50 million through email transformation, and $9 million through the consolidated procurement of hardware and software for workplace technology devices.
Mr. Chair, PWGSC and SSC are tasked with very broad and complex responsibilities. While difficulties can and do arise, overall I am pleased with the progress that has been made by both departments over the last fiscal year.
I anticipate another year of steady progress in achieving cost savings, better services, and greater security for the Government of Canada and for the citizens that it serves.
Thank you very much. We now look forward to your questions.
View Diane Finley Profile
CPC (ON)
We've made it very clear that we want to make sure that our men and women in uniform have the equipment they need to do the job that we ask of them, and that's right across the range. We've invested in the defence procurement strategy in the Canada First program significantly in getting that equipment for them. There have been some false starts on the fixed-wing program. We have made a point though, and I've personally been involved in this, in engaging industry so we can develop a better RFP. That was one of the problems in the past.
Our new RFP has been issued. We have every intent of seeing that through and expect that in the fall of 2016 the first contract award will be made.
View Mathieu Ravignat Profile
NDP (QC)
View Mathieu Ravignat Profile
2015-05-26 11:16
Okay.
Regarding the relocation contract that is renewed year after year with Royal LePage and the CIBC, without a call for tenders—we know that the government was to pay $30 million for discriminatory treatment, and that the contract in question was to expire in 2014.
What has Public Works and Government Services Canada done since that decision was handed down? Are there new adjudication practices, for instance with regard to the management of the Integrated Relocation program?
View Diane Finley Profile
CPC (ON)
Yes, something was done. The contract was extended so that we could assess the state of the market and ensure that there are companies who are able to reply to a bid. Departments are also assessing their own policies in this regard.
View Tarik Brahmi Profile
NDP (QC)
View Tarik Brahmi Profile
2015-05-26 11:25
Thank you, Mr. Chair.
Madam Minister, a little over a year ago you announced the creation of the Defence Analytics Institute, involving quite an interesting mixed group of business people and academics.
What is the status today regarding the creation of that institute?
View Diane Finley Profile
CPC (ON)
We set up an interim institute to help determine how the institute would be structured. This work is being done at this time and consultations took place with the government, the industry and all of the companies in the defence industry. In the Economic Action Plan we included $2.5 million to launch the institute. These people are in the process of determining an appropriate structure for it.
View Tarik Brahmi Profile
NDP (QC)
View Tarik Brahmi Profile
2015-05-26 11:27
In other words, no date has been set for the release of a preliminary report. The point is to see whether things need to change within the military procurement process in Canada. I expect that the objective is to improve the process.
View Diane Finley Profile
CPC (ON)
One of the purposes is to determine who is a part of the industry in Canada. We have no directory listing all of the companies in Canada that provide defence equipment and services throughout the world. It is very important that we list the facilities, products and services available. This will allow us to promote them in our embassies throughout the world, for export purposes particularly, but also with people who might like to build equipment here in Canada and are looking for partners. It is very important to know who these potential partners for foreign businesses are.
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