THE STANDING COMMITTEE ON INTERNAL ECONOMY, BUDGETS AND ADMINISTRATION
OTTAWA, Thursday, June 20, 2019
The Standing Committee on Internal Economy, Budgets and Administration met this day at 8 a.m., in public and in camera, pursuant to rule 12-7(1), for the consideration of financial and administrative matters.
Senator Sabi Marwah (Chair) in the chair.
The Chair: Good morning, everyone. Welcome to the Standing Committee on Internal Economy, Budgets and Administration. My name Senator Sabi Marwah, and I have the privilege of chairing this meeting.
For the benefit of everyone on the webcast or on the phone, I would like the senators to introduce themselves.
Senator Munson: Jim Munson, Ontario, deputy chair.
Senator Dalphond: Pierre J. Dalphond from Quebec.
Senator Dawson: Dennis Dawson from Quebec.
Senator Forest: Éric Forest from the Gulf region of Quebec.
Senator Moncion: Lucie Moncion from Ontario.
Senator Verner: Josée Verner from Quebec.
Senator Saint-Germain: Raymonde Saint-Germain from Quebec.
Senator Tannas: Scott Tannas, Alberta.
Senator Plett: Don Plett, Manitoba.
Senator Tkachuk: David Tkachuk, Saskatchewan.
Senator Batters: Denise Batters, Saskatchewan, deputy chair; and the victors of the Ottawa/Riders game tonight.
The Chair: Honourable senators, a copy of the public minutes from June 13 is in your package. Are there any questions or changes? Can I have a motion to adopt the minutes?
It is moved by Senator Saint-Germain to adopt the minutes. Agreed?
Hon. Senators: Agreed.
The Chair: Carried.
Honourable senators, the next item — and I spoke to Senator Tannas about this — is we thought a better way to handle this is to recommend the item be deferred to another meeting.
Number 3 is an update on the quarterly governance framework for the anticipated LTVP projects. I invite Caroline Morency, Acting Director General, Property and Services Directorate, to the witness table. It is my understanding that Senator Tannas will make a presentation and Caroline will be available to answer any questions, if required, from senators.
Senator Tannas: Colleagues, as you will recall, in April we approved the use of a governance framework to help plan for and schedule decisions that will be required for the Long Term Vision and Plan projects. At that time, we approved a schedule for the spring which we have been following for the last several months.
Today, I am seeking your endorsement to continue to use this very helpful tool to ensure that we have a plan in place to provide the necessary direction and approval for the Long Term Vision and Plan projects.
I think this document is useful for all CIBA members as well as for the subcommittee as a rolling schedule of all of the items we are considering immediately or will be considering in subsequent quarters.
I would like to draw your attention now to the proposed schedule for summer 2019. As you will note, there are additional items on the list for the summer that were not on the list in April. They include some carry-over from the spring and information about PSPC Base Building initiatives.
By the way, on this, and I think we’ll speak more about it as time goes on, we had a fascinating presentation from PSPC on earthquake protection using unique processes that have been used in other parts of the world but not widely used in Canada. That’s part of the Base Building initiative.
We also had some preliminary discussions linked to broader items that will be presented later in the year, some post-occupancy items for the Senate of Canada Building, and three change requests related to LTVP projects.
We continue to use the PSPC schedules as the baseline for our governance framework, recognizing that as the projects evolve, this can result in changes to our schedule and the timing of our input and direction.
I’m happy to answer questions. Once we are done, I will ask for your approval to continue to use this revised framework to guide both CIBA and the subcommittee’s work plan over the summer and fall.
Senator Tkachuk: I have a question, Senator Tannas. There was an earthquake a number of years ago. After that, we found that people didn’t know quite what to do when it was happening. There were all these fixtures on the ceiling and stuff over the top of our heads.
We had a demonstration after that and we haven’t done one since. I’m wondering why security hasn’t done that. This is a new building. It would be important to have a plan as to what will happen if there is an earthquake or a fire or a terrorist.
We have had two of those. We had the terrorist demonstration and an earthquake demonstration, but that was a long time ago.
I think it should be put in the future plans for when we return.
Senator Tannas: Thank you. We’ll take that on board and speak with Julie Lacroix and Caroline Morency and see what we can coordinate. I think it’s a great idea. Thank you.
Senator Batters: I have a couple of questions about a few of the issues listed in here for “Summer 2019.”
One of them is “Senate of Canada Building: Washroom — back of Chamber.” I’m hopeful of what that is. That is additional washrooms, as was mentioned previously at this meeting, that are needed in closer proximity to the chamber than we have now. I’m wondering about that.
The other one is listed as: “Speaker — For Approval: Chamber, Antechamber and Galleries — Size, layout, furniture and heritage (July).”
Can you explain those?
Senator Tannas: Your wishes are going to come true on the washroom side of things. As part of steering, that will come to you for approval. It’s a retrofit part of the PSPC recalibration of the building. That work is anticipated to be costed, approved and completed while we are away.
With respect to the chamber, antechamber and galleries, these are items where consultation and plans are needed with respect to the Centre Block and the return there. The Speaker is in charge of those areas specifically. There will be consultations and potentially decisions that get made around the new chamber, the new antechamber and how that all works. It’s not that new. It’s not like we’re changing it.
Senator Batters: This July already?
Senator Tannas: It’s an unusual process and one that doesn’t intuitively go like building a house. It seems like there are incredibly detailed decisions being made while there are still very general things that haven’t been decided. But it is what it is. We’re following a process that’s being led by PSPC, and they’re staging the answers that they’re looking for in a timetable that is not ours. It is their timetable.
Senator Batters: With the chamber and for the building that we’ll be returning to in many years to come, I assume there will be processes in place to get our input about what we would like to see.
Senator Tannas: This is one of the interesting areas. We’ve worked hard to make sure there is a delineation between what the Speaker is in charge of and what all senators are in charge of. There are areas very clearly where the Speaker is the one and only final word. He or she can get their own counsel. It may include senators, historians or whatever. Through the mandate that was developed, there is the Speaker’s world and our world, and we’re trying to make sure there isn’t much overlap.
I’m sure the Speaker would welcome input from any senators and consultation to provide information on what the plan is with respect to the chamber, the antechamber and galleries.
I can tell you that the Centre Block, particularly all of the items on the second floor, which is where the chambers and the beautiful historic meeting rooms are — it has been expressed to us by the people doing the building that they’ve got the message that people are expecting that when you walk in there 10 or 15 years from now, or whenever it is, that you won’t notice a difference.
Senator Batters: That’s personally what I would like, and I might actually be there.
Senator Tannas: Exactly. Send us a postcard.
Senator Batters: Absolutely.
The Chair: If there are no other questions, it is moved by the Honourable Senator Tannas that the updated government framework be adopted. Is it agreed, senators?
Hon. Senators: Agreed.
The Chair: Carried.
The next item is the twenty-eighth report from the Subcommittee on Committee Budgets.
Senator Verner: Honourable senators, it is my honour to present the twenty-eighth report of the Subcommittee on Committee Budgets, which includes a recommendation for a committee budget. I remind you that committees have a budget of $1,882,000 for travel activities in 2019-2020. So far, $793,082 has been released for four completed travel activities and other general committee expenses.
Earlier this week, we met with the chair of the Standing Senate Committee on Agriculture and Forestry, who presented a $16,090 budget request for the release of a report on the value-added food sector. That budget request would cover the expenses of three senators and two employees of the Communications Directorate for a press conference held in Charlottetown, Prince Edward Island, when the report is published.
According to the information provided, the subcommittee recommends that the $16,090 be released. Taking into account today’s recommendation, a total of $809,172 will have been authorized so far for committee activities, which leaves $1,072,828 for the remainder of the fiscal year. As in past years, the subcommittee notes that committees’ actual expenditures generally account for about 40 per cent of the total requested budget. So we expect that a significant amount will have to be returned to the main estimates reserved for committee travel well before the end of the fiscal year. Unless the senators have questions, I recommend that we adopt the report.
The Chair: Any questions for Senator Verner? If not, it was moved by the Honourable Senator Verner that the twenty-eighth report of the Subcommittee on Committee Budgets be adopted. Is it agreed, honourable senators?
Hon. Senators: Agreed.
The Chair: Carried.
The next item is on dependent care witness expenses. I invite Blair Armitage, Principal Clerk, Committees to the witness table.
Blair, why don’t you begin with your opening remarks and we can then open it up for questions.
Blair Armitage, Principal Clerk, Committees Directorate, Senate of Canada: I believe the request before you is relatively straightforward. A year ago, we asked your permission to try a pilot project to extend to witnesses the ability to claim dependent care expenses. It was prompted by a request from our Joint Committee on the Library of Parliament where the House of Commons had already adopted this policy. Because we weren’t in step with them, we needed approval to pay a dependent care expense claim there, and we decided at that time to propose a pilot project to extend that to all committees. You asked me to do that and monitor the uptake on those claims.
We had two claims totalling $163. Last year I think we spent $450,000 on witness expenses, so I don’t think it’s a huge risk to our financial situation. That was out of over 2,215 witnesses that you heard before your committees last year.
The Chair: Are there any questions for Blair?
Senator Batters: Is the amount of $75 per day a House of Commons’ maximum amount?
Mr. Armitage: That’s what we based it on, senator.
Senator Batters: I’ve heard from people in the disability community who have indicated there could be a higher amount than that if it’s people with special needs.
Mr. Armitage: Senator, if we come across a situation where that becomes a problem, we would be happy to come to the steering committee for permission to increase it, and we could extend those rates through that process.
Senator Batters: Okay. Thank you.
The Chair: If there are no questions, can I have a mover for a motion stating that the pilot project be concluded and the practice of covering dependent care for witnesses be confirmed?
Senator Tkachuk: So moved.
The Chair: Moved by Senator Tkachuk.
All agreed, senators?
Hon. Senators: Agreed.
The Chair: Carried.
The next item is an amendment to the procurement policy. I invite Pierre Lanctôt, Chief Financial Officer, and Martine Bergeron, Manager of Procurement, to the witness table.
Pierre Lanctôt, Chief Financial Officer, Finance and Procurement Directorate, Senate of Canada: Good morning, honourable senators. As we said a few weeks ago, the Finance and Procurement Directorate is currently reviewing the Senate Procurement Policy in order to bring it up to date. This review is part of our broader initiative to update all of the Senate of Canada’s administrative policies. However, following discussions over the past few weeks on the approval of sole source contracts, we propose that the policy on these types of transactions be clarified now, so as to eliminate any potential ambiguity in terms of interpreting a few sections of the policy.
There are currently inconsistencies between some sections of the current policy, and the policy and the Senate Administrative Rules, commonly called the SARs.
Two sections of the policy, 2.18.3 and 3.1, require CIBA to approve sole-source procurement for the administration when the amount is greater than $35,000 for services and $25,000 for goods. These amounts are stated in section 2.13.1.
Two sections of the policy, 2.17.1 and 3.2, allow the Clerk of the Senate to approve sole-source procurement for the administration when the amount is lower than $100,000.
The Senate Administrative Rules require CIBA to approve sole-source procurement for the administration when the amount is greater than $35,000 for services and $25,000 for goods. This is in Chapter 3:03 in the Schedule, Financial Rule.
We propose the amendment of sections 2.17.1 and 3.2 of the policy to harmonize them with sections 2.18.3 and 3.1 of the policy, as well as with the Senate Administrative Rules. Section 2.17.1 will read as follows:
When it is estimated that the value of the acquisition will exceed the thresholds outlined in 2.13, some or all the provisions of this policy governing competitive sourcing process may be waived as authorized by this policy or by the Clerk of the Senate or the Committee where the end user so requests in writing and attests that the procurement....
Here, we are adding an “and” to replace the “or” that was previously in the section. So we are confirming that the committee must indeed approve acquisitions with a sole source provider.
Subsection 3.2(b) has also been harmonized and will read as follows:
The Clerk of the Senate is responsible for:
(b) in the case of Senate Administration, reviewing requests for exceptions to the competitive process up to $100,000 and submitting such requests to the Committee or Steering Committee for review and decision....
We removed the “or” that used to be in the section and replaced it with an “and” to clarify that the Standing Committee on Internal Economy, Budgets and Administration must also review those types of transactions.
In conclusion, the administration recommends that the Senate Procurement Policy be amended as presented.
We will be pleased to respond to your questions and receive your comments.
Senator Tkachuk: I have two questions. Why $35,000 and $25,000? Why don’t we have just a flat number for services and products? Why do we have two numbers? It’s a little confusing.
The second question is: If the contract for the product or the service is multi-year, so say $10,000 or a $15,000 a year over a period of three years, then is that a $10,000 contract or that a $30,000 contract?
Mr. Lanctôt: Thank you for the questions.
On the first one, you’re right, having different numbers for services and goods adds complexity to the policy. We’re not touching those at this point. As I mentioned, we’re reviewing the policy overall. When we update the full policy, we will take that kind of view into consideration and see if we should have a single amount that makes sense from a procurement perspective as well as an administration perspective. That’s a fair point and we’ll address that in the full review of the policy.
As for the value of the contract, basically, if we have a contract for $10,000 and another contract for $10,000 that is for the same services from the same supplier, we consider that as one contract and we would not issue two different contracts. We would amend the previous contract if it is the same services with the same supplier. It’s really cumulative for the same supplier and the same services or goods that we’re purchasing.
Senator Tkachuk: The question is, if it’s multi-year for the same service, is that considered a contract that you have to go to steering for, or is that a decision you can make on your own? A contract may be for $15,000 over a period of two or three years. Do you have to then seek approval, or is that considered a $15,000 contract?
Mr. Lanctôt: No, it’s cumulative. Even if it’s over a three-year period, if the same contract — if we have a contract and the first year is $10,000, the second year is $10,000 and the third year is $20,000, then we’re exceeding the $35,000 and the $35,000 rule applies — again, if it’s the same services.
We sometimes have contracts with the same supplier for totally different services or goods. At that point they are considered different contracts. But if it’s an accumulation of the same request, then we cumulate the amount regardless of the number of years.
Senator Tkachuk: Thank you.
The Chair: I think I can provide some clarification. The way I would read it is there is a commitment made for three consecutive years, then it’s a three-year contract. But if it is uncertain where there is dependency, then it becomes an individual contract.
Senator Batters: I’m glad to see this. I personally didn’t find that it needed clarification, but if anyone thought that it did, it is good to have that.
I also appreciate that you added in section 3.1, which clearly sets out that the Internal Economy Committee has the very important role and responsibility of making sure that above those thresholds, it must approve those types of exceptions to the competitive sourcing process, approve those sole-source contracts.
Thanks for also adding in the Senate Administrative Rules, which makes clear that this is the responsibility of the full Internal Economy Committee for those particular types of contracts. There’s no question of an “and” or an “or” in that particular Senate administrative rule. It is set out clearly. If that clears up any confusion, I’m happy it does that.
Senator Forest: I think this clearly specifies that the rule is the responsibility of the committee, but also of managers at a specified level. However, I will make the following recommendation. Seven criteria define a sole source supplier. Given what we have seen in the past and the fact that people are not always well informed, when there is a sole source supplier, it would be relevant for you to indicate in the file what criterion was behind the decision to opt for a sole source supplier. That would clarify the spirit of the decision, would specify how it meets the seven criteria and would give us information for future use if some people were more suspicious and wondered why a decision was made. It would be a matter of justifying it in the file.
Mr. Lanctôt: Thank you.
Senator Forest: That is what I recommend.
Senator Saint-Germain: Thank you for providing clarifications and for making the decision to tighten the framework. The “or” has been replaced with an “and”.
In conclusion, regarding the Senate Procurement Policy, if there is a doubt, you are asked to consult the Steering Committee of the Standing Committee on Internal Economy, Budgets and Administration and to be especially careful in situations where it could be interpreted or perceived that the contract may have been split to favour the same supplier. In French, the term used is “division de contrat”. That is what must be avoided. There may be situations where you have to do it. However, that must be documented, as Senator Forest was saying, and, most importantly, the Steering Committee of the Standing Committee on Internal Economy, Budgets and Administration must be informed and its consent must be obtained. This point is very important. That way, many problems of comprehension will be avoided.
Mr. Lanctôt: Thank you.
The Chair: Can I have a mover for the following motion? This is a lot of words for replacing one word. Senator Forest moved: That the Senate Procurement Policy be amended in Section 2.17 by replacing “may be waived as authorized by this policy or by the Clerk of the Senate or the Committee” with “may be waived as authorized by this policy and by the Clerk of the Senate and the Committee”; and that the policy be further amended in Section 3.2 by replacing “reviewing requests for exceptions to the competitive process up to $100,000 or submitting such requests to the Committee or Steering Committee for review and decisions” with “reviewing requests for exceptions to the competitive process for up to $100,000 and submitting such requests to the Committee or Steering Committee for review and decision.”
Is it agreed, senators?
Hon. Senators: Agreed.
The Chair: Carried.
The next item is on the procurement process.
Mr. Lanctôt: Honourable senators, in recent months there have been many requests made by the administration to obtain CIBA approval to proceed with contract renewals or procurement processes for the acquisition of goods and services. Some of these requests were made close to the contract end date or after the contract had expired. Senators have asked for information on how contract end dates are managed and how the administration can inform them in advance of upcoming contract renewals and procurement processes. They also mentioned that they would like to be informed of the results of the procurement processes that they have approved.
In general, our contract management system advises the procurement team of any expiring contracts 90 days before they end. The team may, at any time, obtain details on contracts that are expiring in the coming months. In addition, directors and managers follow the degree of exceedances associated with their contract and can prematurely terminate a contract if its total amount has been reached before its expiry date.
The procurement team discusses expiring contracts and their renewals with the directors and managers responsible for various contracts. Together, they determine whether a contract will simply expire, or will have to be modified to increase its value or length, or whether a bidding process will be necessary. That way, a procurement strategy is established and, based on the value of future contracts, the required approvals are obtained. When the approval of the Standing Committee on Internal Economy, Budgets and Administration is necessary, the director or manager responsible for using the good or service works with the procurement team, with the Finance Directorate and with other teams to prepare a briefing note.
Considering the interest expressed by CIBA members to be informed about the upcoming contract renewals and procurement processes, we will begin providing a list of contract renewals and future procurement processes for the upcoming six months on a quarterly basis, starting with the beginning of the next session. Together, this information will be sent with details about the future procurement processes.
On a quarterly basis, we will also provide CIBA with the results of the procurement processes that were previously approved. We will provide details that are not currently available in the proactive disclosure such as reference to the initial CIBA approval contract; the number of submissions received; how the procurement was obtained, public or by invitation; the name of the successful bidder that is already provided in proactive disclosure; the total amount of the contract, which is also disclosed under our proactive disclosure; and the duration of the contract.
I would be pleased to respond to any questions and receive your comments.
The Chair: Are there any questions on the process? If not, can I have a mover for a motion that the proposed approach to inform CIBA members of the results of RFP processes be adopted.
Moved by Senator Dalphond. Agreed, senators?
Hon. Senators: Agreed.
The Chair: Carried.
Item 8 is the appointment of the external auditor. This item is for information.
Senator Moncion: At the meeting of November 8, 2018, the Standing Committee on Internal Economy, Budgets and Administration approved the recommendation of the Audit Subcommittee to proceed with a competition process to obtain an external audit service for the Senate’s financial statements beginning in the 2019-2020 fiscal year.
Three senators from the Audit Subcommittee of the Standing Committee on Internal Economy, Budgets and Administration met on March 19 and 22, and on April 30, to assess the three bidders who responded to the competition process launched by the Senate Finance and Procurement Directorate to hire an external firm whose mandate would be to carry out an external audit of the Senate. Your subcommittee also discussed the results of the assessment process at its meeting of May 22.
As Chair of the Audit Subcommittee, I would like to inform the members of CIBA that the firm EY has been selected as a result of the competitive process. The contract with EY is for the audit of the Senate financial statements for three fiscal years and is in the amount of $81,000. The first audit year is 2019-20. Please note that fees may be added to this amount in special circumstances, such as a fundamental change in the systems like we have seen this year with the Human Resources Directorate.
KPMG will complete the audit for 2018-19 based on the current contract, and the file will be transitioned to the new auditor in the fall. Accordingly, the contract with KPMG will be terminated when the audit for the fiscal year 2018-19 is completed.
As for the selection process of the firm, a competitive process was launched. In compliance with the Senate rules and procedures, a complete review of the three proposals received was conducted. Among other things, members of your Audit Subcommittee and the administration reviewed and assessed the submission of all bidders using a rigorous and thorough process, and conducted an individual interview with each firm. References were required and verified. Following this process, your Audit Subcommittee concluded that the contract should be awarded to EY.
I am available to answer your questions.
Senator Tannas: I just wondered if the $81,000 is per year or for the three years.
Senator Moncion: For the three years.
The Chair: Any further questions?
Senator Forest: When you analyze submissions in terms of the qualification of the companies participating in the process, are the prices already included?
Senator Moncion: No. When the committee considered the submissions, it started by meeting with companies to see what they could propose to us; it was not the contract, but plans regarding the audit they had to present to us, and the procurement team obtained submission for prices.
Senator Forest: So, those are two envelopes?
Senator Moncion: We are talking about two completely different envelopes, and we have seen the envelopes for prices.
Senator Forest: Thank you. We have the same system in the municipal world.
The Chair: Thank you, Senator Moncion.
Other matters? Is there any other public business, senators?
Senator Batters: I have a brief item.
At our Internal Economy meeting three weeks ago, I asked to receive a copy of the formal record of decision authorizing the Arlington Group sole-source contract required in the procurement rules, and both the Corporate Security Director and the Interim Clerk of the Senate confirmed I would get a copy. I don’t have it yet, so could I find out when I will receive it?
Richard Denis, Interim Clerk of the Senate and Clerk of the Parliaments and Chief Legislative Services Officer, Senate of Canada: Senator, it’s my understanding that attempts were made to meet with you in your office to provide the contract.
Senator Batters: I’ve had zero time since then. They told me I would just be getting an email.
Mr. Denis: It’s available for you to receive anytime you want.
Senator Batters: Okay. Thank you.
The Chair: Before we go in camera, I would like to take this opportunity to thank my colleagues for all your contributions to CIBA. I hope you all have a restful summer with family and friends, and we look forward to seeing you in the fall after the election.
I’d also like to take this opportunity to thank all of our support staff who work tirelessly behind the scenes to make sure that our meetings run smoothly and that we’re well prepared.
In the same vein, I’d like to thank our dedicated management team in the Senate administration who work so hard daily to keep this institution running efficiently.
Thanks again for your support, and I look forward to seeing you in the fall.
With that, we will go in camera.
(The committee continued in camera.)