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THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE

EVIDENCE


OTTAWA, Thursday, June 18, 2020

The Standing Senate Committee on National Finance met by videoconference this day at 10 a.m. [ET] to study the Supplementary Estimates (A) for the fiscal year ending March 31, 2021.

Senator Percy Mockler (Chair) in the chair.

[English]

The Chair: Honourable senators, we will now begin with the official portion of our meeting. My name is Percy Mockler, senator from New Brunswick and chair of the committee.

I would like to introduce the members of the committee who are participating in this meeting: Senator Forest, deputy chair, Senator Richards, steering committee member, Senator Boehm, Senator Dagenais, Senator Deacon (Ontario), Senator Duncan, Senator Galvez, Senator Harder, Senator Klyne, Senator Loffreda, Senator Marshall and Senator Smith. Also joining us are two other senators: Senator Lankin and Senator Pate. I welcome them to the committee.

[Translation]

I’d like to welcome all the Canadians tuning in across the country. Today, our committee is beginning its study of the Supplementary Estimates (A) for the fiscal year ending March 31, 2021. This study was sent to the committee by order of reference by the Senate of Canada.

[English]

For our first panel, honourable senators, we welcome officials from Innovation, Science and Economic Development Canada: the Assistant Deputy Minister and Chief Financial Officer, Corporate Management Sector, Douglas McConnachie. He is accompanied by Associate Assistant Deputy Minister, Strategic and Innovation Policy Sector, Mark Schaan.

[Translation]

From the Public Health Agency of Canada, we have with us Chief Financial Officer Carlo Beaudoin, accompanied by Kimberly Elmslie, Vice-President, Infectious Diseases Prevention and Control Branch, Vice-President Eric Dagenais and Dr. Guillaume Poliquin, Acting Scientific Director General.

[English]

We also have Sally Thornton, Vice-President, Health Security and Infrastructure Branch.

Honourable senators, as witnesses for the Department of Indigenous Services Canada we welcome the Chief Finances, Results and Delivery Officer, Philippe Thompson. He is accompanied by the Senior Assistant Deputy Minister, First Nations and Inuit Health Branch, Valerie Gideon.

Welcome to all of you and thank you for accepting our invitation.

Douglas McConnachie, Assistant Deputy Minister and Chief Financial Officer, Corporate Management Sector, Innovation, Science and Economic Development Canada: Mr. Chair, honourable senators and officials, we are pleased to be here with you today to provide an overview of the authorities that ISED is requesting through the 2020-21 Supplementary Estimates (A).

ISED continues to play an instrumental role in the government’s response to mitigating COVID-19 in Canada. Over the past several months ISED has worked closely with partner departments to support the tracking and testing of COVID-19 within Canada, the development of vaccines and therapies, and the enhancing of Canadian capacity for vaccine-related research, clinical trials and further investments in biomanufacturing.

In this context it is important to note that the authorities being requested through the Supplementary Estimates (A) are strictly related to implementing the government’s commitments toward mitigating COVID-19.

ISED is requesting additional authorities of $628.4 million through these Supplementary Estimates (A). Our request is comprised of four key initiatives that are listed as follows: $192.2 million for the emergency research and innovation response measures, $375.6 million for a national medical research strategy, $49.4 million for FedNor under the support to small- and medium-sized businesses, and $11.2 million for Futurpreneur Canada.

I will now provide a brief overview of each initiative. The emergency research and innovation response measures were announced on March 23 with $275 million identified for coronavirus research and medical countermeasures. ISED is seeking $192.2 million of this total for priority projects under the Strategic Innovation Fund new COVID-19 stream to deliver direct support to Canadian companies for large-scale projects. The funding will be used to pursue large-scale and later-stage research programs aimed at producing vaccines, antivirals and other therapies as well as personal protective equipment.

The national medical research strategy was announced on April 23 with over $1 billion identified for better understanding COVID-19 and developing the infrastructure needed to fight the virus here in Canada.

The majority of the $375.6 million requested by ISED is once again identified for the Strategic Innovation Fund, but this time the goal will be to support COVID-19 vaccine and therapy clinical trials led by the private sector as well as Canadian biomanufacturing opportunities.

The remaining funding is being sought for the Canadian COVID-19 Genomics Network led by Genome Canada to coordinate COVID-19 viral and host genome sequencing efforts across Canada. This research will help track the virus, its different strains and how it makes people sick in different ways, thereby providing valuable information to public health authorities and decision makers as they put in place measures to control the pandemic.

The $49.4 million requested for FedNor is part of the $962 million Regional Relief and Recovery Fund, or RRRF, which was created to support small- and medium-sized business and communities that may not have access to other support measures.

The funding requested for FedNor is in two streams: $23.9 million for small- and medium-sized businesses through the Regional Economic Growth Through Innovation Program, and $25.5 million to support businesses and communities affected by the pandemic through the Community Futures Canada development corporations.

Finally, the $11.2 million in top-up funding for Futurpreneur will enable the program to provide its existing clients with crucial financial support while also helping thousands of young entrepreneurs launch successful new businesses that will grow the Canadian economy in the years to come.

The mainstream businesses that receive support through the program are the heart and soul of communities of all sizes across the country. They employ thousands and provide essential hubs for residents to connect and engage with each other. These businesses are the backbone of the Canadian economy and their success will be key to Canada’s inclusive economic recovery in the coming months.

In closing I would like to reaffirm the department’s commitment to the stewardship of public resources during these unprecedented times. The delivery of these important initiatives will be supported by a strong internal control framework and robust practices for monitoring and reporting on COVID‑19‑related expenditures to ensure the expected results are achieved for Canadians.

I thank the committee for giving us an opportunity to discuss these requests today. My colleague and I will be pleased to answer any questions you may have.

Carlo Beaudoin, Chief Financial Officer, Public Health Agency of Canada: Mr. Chair and honourable senators, we thank you for inviting us today to present the Public Health Agency of Canada Supplementary Estimates (A) for 2020-21.

Accompanying me today are four colleagues: Kimberly Elmslie, Vice-President, Infectious Disease Prevention and Control Branch; Dr. Guillaume Poliquin, Acting Scientific Director General of the National Microbiology Laboratory in Winnipeg; Sally Thornton, Vice President of Health Security Infrastructure Branch; and Eric Dagenais, an ADM brought in to assist the Health Security Infrastructure Branch during the COVID-19 response.

We are pleased to have the opportunity to discuss our resourcing plans with you.

PHAC’s 2020-21 Supplementary Estimates (A) will capture the 2021 departmental budget changes since the Main Estimates which have arisen from cabinet decisions. In these Supplementary Estimates (A) the Public Health Agency of Canada is seeking an increase of over $2.3 billion to our funding levels. These Supplementary Estimates (A) increase PHAC’s voted authorities by $42.25 million and our statutory spending forecast by $2.26 billion. The increase in voted spending authorities of $42 million is required mainly to establish capacity for domestic production of personal protective equipment, or PPE.

The increase in the statutory spending authorities is mainly due to spending under the Public Health Events of National Concern Payments Act that was enacted in response to COVID-19. This funding is needed primarily to fund the bulk purchases of personal protective equipment as well as medical equipment and supplies to meet the urgent needs of federal partners including provinces and territories. This bulk procurement is in support of large-scale efforts to combat COVID-19.

The requested increase of $2.3 billion to Public Health Agency of Canada reference levels is based on the following: an increase of $42.3 million which includes $37.2 million to establish capacity for domestic production of PPE and $5.1 million for the national medical research strategy to support the second phase of Canada’s medical countermeasures response to COVID-19.

Our statutory appropriations of $2.26 billion break down as follows: $1.8 billion for payments to acquire protective personal gear, medical equipment and supplies necessary to support Canada’s response to COVID-19; $200 million for payments to support the Immunity Task Force serology testing of large numbers of people needed to provide the agency with the critical data required to understand the scale of infection and to inform research studies; $177.1 million for payments to support Canada’s initial response to COVID-19 for communications, laboratory capacity, personal protective equipment and quarantine sites; $74.7 million for payments to support Canada’s enhanced response to COVID-19 to continue to sustain operations, help maintain safe and healthy isolation sites for incoming travellers as well as increase our laboratory testing capacity during the early months of the pandemic; and $7.5 million for payments to the Kids Help Phone which provides support and counselling services to children and youth.

As the COVID-19 situation evolves and society and the economy begin to reopen the agency’s focus will continue to ensure appropriate measures remain in place to contain the virus and minimize community transmission to ensure our institutions and health systems have the capacity to continue to respond effectively.

The Public Health Agency of Canada is working closely with provinces and territories as well as with international partners to ensure a consistent evidence-based approach to addressing this crisis. We are communicating with Canadians, conducting testing and national disease surveillance, and providing guidance on public health measures.

Our National Microbiology Laboratory is helping to confirm new cases of COVID-19 and conduct research to advance our understanding of the virus. We are working closely with federal partners including Public Services and Procurement Canada to purchase PPE testing and other supplies needed to support our public health infrastructure.

Thank you for this opportunity to speak about our work. My colleagues and I will be pleased to answer questions from members of this Senate committee.

The Chair: Thank you.

[Translation]

Philippe Thompson, Chief Finances, Results and Delivery Officer, Indigenous Services Canada: Mr. Chair, honourable senators, thank you for inviting me to talk about the 2020-21 supplementary estimates for Indigenous Services Canada. Before I begin, I would like to acknowledge that the Parliament of Canada is located on the traditional unceded territory of the Algonquin people.

Indigenous Services Canada plays an important role by working collaboratively with its partners to improve access to high-quality services for First Nations, Inuit and Métis. The department’s objective is to support and empower Indigenous peoples to independently deliver services and address the socio‑economic conditions in their communities. During the pandemic, the department’s role is more crucial than ever because it needs to ensure that it is properly identifying and responding to communities’ needs.

[English]

With me is Valerie Gideon, Senior Assistant Deputy Minister, First Nations and Inuit Health Branch.

I would like to provide an update on the COVID-19 pandemic and the ongoing efforts that the department has taken to confront this issue. I recognize the positive work done across the country. Our employees have shown their resilience and commitment. They continue to work tirelessly to ensure that services are maintained both remotely and on site.

The results speak for themselves. We are all working to offer a high level of service to our partners. Communities are still receiving critical resources for regular operations in addition to the new services offered to assist communities and organizations with the pandemic.

Indigenous Services Canada is aware of 263 confirmed cases of COVID-19 in First Nation communities. Of these 213 individuals are considered to have recovered. In terms of Inuit in Nunavik and Nunatsiavut there were 16 cases as well as 16 cases in the Territories. They have all recovered.

[Translation]

The department is still working in close collaboration with communities to get a sense of current health infrastructure needs. We are continuing to support testing, triage and isolation measures in case of a COVID-19 outbreak. We are also taking steps to deploy additional health professionals in communities affected by COVID-19. We understand that every community’s needs are unique. Community engagement is crucial to understanding and responding to those needs.

We will continue to work in close collaboration with communities and partners to coordinate resources and keep people and communities safe.

[English]

That is why the ISC 2020-21 Supplementary Estimates (A) reflect a net increase of $1.7 billion, which will bring the total authorities for 2020-21 to approximately $14.5 billion. The $1.7 billion is primarily composed of $22.9 million in vote 1 operating expenditures, $730.5 million in vote 10 grants and contributions, and $950.5 million in statutory funding. The $950.5 million of statutory funding is mostly related to the COVID-19 response measures, while the voted appropriations reflect new funding to support key programs such as $468.2 million for Child and Family Services and $232 million for continuing the implementation of Jordan’s Principle.

I will now briefly describe the major items included in Supplementary Estimates (A). The largest item of new funding requested by these estimates is one of particular importance: $468.2 million to support the ongoing delivery of the First Nations Child and Family Services program.

More specifically, this funding is needed to further support the implementation of Canadian Human Rights Tribunal rulings received prior to September 2019 to cover anticipated maintenance costs incurred by service providers, to address operating costs for new agencies and to address pressures related to provincial agreements.

[Translation]

The second big new envelope in the supplementary estimates that affects Indigenous Services Canada’s voted appropriations is $232 million for Jordan’s Principle measures. This funding will enable us to keep meeting a broad range of health, social services and education needs. The department will also ensure that all First Nations children living in Canada can access the goods, services and support they need when they need it. Since 2016, the department has approved over 594,000 requests for goods, services and support measures.

With this additional funding, the department is doing everything in its power to support the full implementation of Jordan’s Principle.

This supplementary estimate also includes funding for key initiatives, such as $24 million for Band Support Funding, $20 million to enhance the five Métis Capital Corporations’ ability to finance Métis-owned small- and medium-sized businesses, $5 million for the National Aboriginal Youth Suicide Prevention Strategy, and, finally, $4.2 million to act on the final report of the National Inquiry into Missing and Murdered Indigenous Women and Girls.

With respect to planned statutory funding related to measures in response to the COVID-19 pandemic, the budget includes $305 million in distinction-based funding for the Indigenous Community Support Fund.

Of that, $215 million is allocated to First Nations, $45 million to Inuit and $30 million to Métis. It also includes funding based on $15 million worth of proposals for urban and off-reserve Indigenous organizations and communities.

[English]

These estimates also contain more than $280 million to support the Indigenous Services Canada health response in First Nation and Inuit communities.

[Translation]

The Chair: Mr. Thompson, I’ll ask you to pause briefly, and then we’ll go right to questions.

[English]

Mr. Thompson: Mr. Chair, the supplementary estimates will enable us to continue to take concrete steps to address the needs of Indigenous people.

I look forward to discussing any aspects of these estimates with you and welcome your questions regarding my presentation. Thank you very much.

[Translation]

The Chair: Thank you very much, Mr. Thompson.

[English]

I thank the witnesses for their statements.

We will now proceed to questions. I remind senators that we will have a maximum of five minutes each. Therefore, please ask your questions directly and to the witnesses, please respond concisely. The clerk will make a hand signal to show when the time is over.

Senator Marshall: Thank you to all the witnesses for being here today.

I have two questions for Mr. Thompson from Indigenous Services Canada. Both relate to the major item you referenced in your opening remarks, the $468 million.

I look back at last year’s estimates and supplementary estimates. If I am comparing apples to apples, it seems like the request for funding is following the same track. In Main Estimates you are looking for $1.1 billion and then in supplementary estimates you are looking for half a billion dollars.

Why don’t you just ask for all the funding up front in Main Estimates as opposed to waiting until you are partway through the year? That would be my first question, and that is probably the simpler of the two.

Second, I have always been interested in your departmental results reports. I usually look back to see your performance indicators. This program is almost $2 billion a year. I think I am looking at the right category.

There is a section in your departmental results report from last year titled, “Indigenous children and families receive child and family wellness services” that lists the performance indicators.

I don’t have a problem with the performance indicators. We have talked about them in committee before. For example, one of the performance indicators is the percentage of First Nations children on reserve in care, and you are trying to decrease those numbers.

The problem I have is with the targets. The target for that performance indicator will not be determined until March 2021, and then you haven’t even indicated what the date to achieve the target will be. We are looking at two or three years down the road before we find out if the $2 billion a year that you are spending is hitting the mark.

Could you answer those two questions, please?

Mr. Thompson: Thank you very much, senator. Your first question is a very good one.

With regard to funding, the funding we are receiving is based on the demand from agencies to pay actuals. On a yearly basis the department has to provide a forecast of the expenditures we are anticipating.

We have a base budget of $1.2 billion. Based on the expenditures and the requests we are expecting to receive we are requesting additional funding this year to make sure we are able to answer the demand.

For instance, in the $468 million that we have received in addition money was put in place to make sure we were answering the Canadian Human Rights Tribunal rulings. We also had maintenance costs that needed to be covered and pressures related to provincial agreements that were evolving on a yearly basis. As well, we are reimbursing for the capital and operating costs of new agencies.

It is a situation that is in constant evolution and we have to adapt as a department. It is one of those programs that we call demand-driven programs in the organization we have to monitor on a yearly basis what the demand will be. We are reimbursing those costs and that is why you see that fluctuation.

Although you can see the constant trend it is still a program that is difficult to predict multi-year. We have a good solid base to be able to respond to the demand and be agile. We are requesting the funding that we need.

Your second question is a very good one as well. The department had its departmental results framework approved as a new department last year. We had to review our outcomes, statements and performance indicators. This is something we are doing in co-development with First Nations.

We want to make sure that the measures are relevant. The program is currently in discussion with First Nations communities to make sure we have the appropriate measures and targets that are achievable because we are not delivering the service directly. This service is provided by agencies and it is important that we work very closely with them to make sure the measures we are putting forward are the right ones and are achievable.

You should see changes in the next report in terms of more precision in the measures and when we will be achieving our targets.

Senator Marshall: Isn’t there a concern that you are spending $2 billion a year and you don’t have your performance indicators to tell you whether you are on the right track?

Mr. Thompson: As the Chief Results and Delivery Officer I can tell you that it is extremely important to me to make sure we are achieving our targets and that the program is effective and efficient. It is absolutely critical for us to continue the important work with communities to ensure that we are able to measure the performance of the program.

[Translation]

Senator Forest: Let me start by apologizing for my technical difficulties.

I’m very concerned about the marine procurement policy. My questions are for the Department of National Defence. According to the estimates, you have an additional $586 million to fund in part the construction of two Protecteur-class ships, the HMCS Protecteur and the HMCS Preserver, which was started in 2008. These two ships will eventually replace the old Protecteur-class auxiliary oiler and replenishment vessels. Seaspan is responsible for the contract. We know that the marine procurement policy has designated Seaspan and Nova Scotia’s Irving shipyard as official suppliers.

What is the total budget for this project, including the design and construction of these two ships? The original delivery dates were 2022-23, but that’s been pushed back to 2023-24. Do you think the project will be delivered by the new deadline? How is the pandemic impacting Seaspan’s ability to deliver the project on time without going over budget?

[English]

Senator Harder: Defence is our next panel. I have great questions for later.

[Translation]

The Chair: Senator Forest, those questions are for representatives of the Department of National Defence.

[English]

Senator Smith: They are the next panel, chair. They are not in this group.

[Translation]

The Chair: Senator Forest, do you have another question?

Senator Forest: Sorry, I’ll ask my question later.

[English]

Senator Harder: Thank you to our witnesses. I want to thank, through the witnesses, the officials who are so diligently working on the COVID.

These are extraordinary supplementary estimates both in their size and in the innovation the programs described here represent.

My questions are for ISED with respect to the COVID-related vaccines, therapies and equipment that will be partially funded through these supplementary estimates.

I would like to get a sense of to what extent the department is redirecting existing funds to this new priority, supplemented, of course, by the supplementary estimates we are discussing today.

What are the mechanisms you intend to use to deliver this support to the private sector and research institutions? Are you contemplating equity partnership agreements, grants, et cetera? To what extent are you confident that we will develop a Canadian capacity to deliver the manufactured innovations, be they vaccines or other therapies?

Are we giving consideration to joining the call for reserving at least 10% of what we manufacture to contribute to international development for less-developed countries to support their capacity to have vaccines at least for their front-line medical providers?

My final question is for the ISED assistant deputy minister in response to the comments made with respect to ensuring appropriate oversight of these funds. I know the department reasonably well and I know it has a very good track record in terms of oversight of funding, but I wonder if you could tell us whether you are using some of the tools that were developed 10 years ago.

I am thinking of the innovation and research fund and how right from the start, the department incorporated the audit function in the delivery of programs, to the extent that the Auditor General, in reviewing it, commended the department on this innovation. It would be helpful for us to know that degree of upfront integrity is being put in place.

Mr. McConnachie: The department of ISED has received numerous calls from industry since the COVID crisis began. As you are all very well aware, one of our key functions is to mobilize industrial capacity.

As it pertains to the monies being requested through these supplementary estimates, all of the funding is over and above our existing baseline. We are not repurposing, for the most part, any significant reference levels toward the COVID response.

The two main pieces listed in the Supplementary Estimates (A) are principally related to what is colloquially referred to as a medical countermeasures plan. Both of those pieces have specific objectives that will be delivered through the Strategic Innovation Fund. The SIF, as it is known, is a broadly based instrument that we use to work with industries across Canada to build capacity and to target investments in specific areas of the economy.

For the first phase of the medical countermeasures plan, which is referred to in the estimates as funding for emergency research and innovation response measures, there are three pieces I would like to signal that will be important to our response.

One agreement is with AbCellera, a Canadian-based company, to develop antibody-based drugs to treat and prevent COVID-19; a second with Medicago to work on plant-based vaccines; and a third with VIDO-InterVac, a Saskatchewan-based manufacturing facility. This was to help the stand-up additional capacity required for human vaccine production.

Similar investments are proposed in the second phase of the medical countermeasures. In the interest of time, and with the number of subquestions that were asked, I can come back to that if it is interesting.

In terms of working with international partners both on the research front and on the manufacturing and capacity side, ISED and the government at large have numerous multilateral relationships that we will continue to leverage in the COVID response. However, I would signal that the funding ISED is drawing is principally to be directed at Canadian manufacturers and research organizations.

The final point regarding internal controls and the use of the audit function is well taken. Any time we are creating new programming of great significance like this one, we look closely at the internal control frameworks which tend to be risk based. The need for speed and efficiency does not trump policy or the need for oversight. In fact it calls us to question whether or not our controls are strong enough.

In all cases with the SIF program we have put in enhanced monitoring mechanisms to ensure we are monitoring our deal flow, our authorities and our expenditures. There are additional reporting mechanisms via the Treasury Board Secretariat that are monitoring these expenditures on a monthly basis.

The Chair: If you want to add to that, Mr. McConnachie, you can certainly do so in writing.

Mr. McConnachie: Certainly.

Senator Smith: I have a question for Innovation, Science and Economic Development Canada.

Part of your department’s national medical research strategy includes testing and tracking COVID-19 cases. It has become evident that without a vaccine we have to learn how to manage the virus effectively moving forward. We know that countries such as South Korea, Taiwan and Singapore have had success using contact-tracing mobile applications.

I have a simple question. Has your department studied the tradeoffs of contact tracking apps? Is any funding being allocated to this area?

Mr. McConnachie: Mr. Chair, if you please, I will refer the question to my colleague Mark Schaan who has been intimately involved in this project.

Mark Schaan, Associate Assistant Deputy Minister, Strategic and Innovation Policy Sector, Innovation, Science and Economic Development Canada: Thank you, senator, for the question. The department has been working closely with our counterparts in the departments of health and Health Canada to ensure all possible innovations are being brought to bear in our approach to COVID.

This includes the use of digital applications which come in a great number of varieties. We have been actively looking toward understanding these various technologies and working with the provinces and territories to ensure that we are working collectively and collaboratively on an approach.

With respect to your question on the tradeoffs between them, I would note again the diversity of possibilities of these applications: everything from exposure notification through to contact tracing.

There is an important distinction to be made between the two. Exposure notification is alerting someone to when they have come in close contact with someone who has in fact been tested positive and who has a confirmed test within their application. Contact tracing is something that provides potential information to someone who is seeking to trace out with whom those individuals have been in contact.

The models vary enormously from some requiring the transmission of private and personal information to others requiring no data to be shared except for a Bluetooth handshake between mobile applications.

We continue to work with the provinces and territories on a collective and collaborative approach, and we will have more to say on this as we continue that effort.

Senator Smith: Have you had any chance to assess where you are in terms of percentage of success or accomplishment? Is it 10, 20 or 30%? I know it would vary among different situations, but can you give us some background?

Mr. Schaan: As of now there is no federal national application in situ. A number of provinces and territories have gone the route of exposure notification or supports to contact tracing in a digital application format.

Right now, I wouldn’t be able to provide a number as to where we are because we don’t yet have one. However, as we move forward with an approach we will seek to ensure we both allow for the consent of Canadians toward the application while maximizing the uptake of such an application because critical mass is absolutely fundamental to its efficacy.

Senator Smith: Do we have a relationship with the leader in this field or fields so that we can deal with the lead country in advance and make real progress that is definable?

Mr. Schaan: We have been working closely in the international sphere and have had the benefit of a number of countries coming before us to pursue activities in this particular space, such as jurisdictions including Singapore, the United Kingdom, Australia and others. We have had active conversations with many of them to understand their own trajectories with the use of digital applications.

Our own efforts are very much predicated on building on lessons learned while also being extraordinarily sensitive to the unique contours of the Canadian geography.

[Translation]

Senator Dagenais: My question is for Mr. McConnachie. I’d like to go back to the supplementary estimate for Innovation, Science and Economic Development Canada, which is $628 million. Do you have a plan and established criteria for the disbursement of that money, or is this just something the government is throwing out there, a kind of “open bar” for those who claim they can invent products that will help end the COVID-19 crisis? How can you follow up to make sure those millions of dollars are being used properly so that, a year or two from now, we don’t end up with an Auditor General report finding that the money was not spent as carefully as we should expect? Do you have the staff to do that?

[English]

Mr. McConnachie: Thank you very much for the question. As I mentioned in my previous remarks, all funding that is being administered through the two phases of medical countermeasures is being administered through a new stream of the Strategic Innovation Fund.

In this context we are leveraging existing terms and conditions already approved by the Treasury Board Secretariat and effectively adding in a stream targeted to achieve the results desired in this capacity.

In terms of the manner in which these programs are negotiated there is significant negotiation between Innovation, Science and Economic Development Canada and the recipients to develop a detailed term sheet that is very specific in what is required from a results perspective for the government as well as what the financial commitments are.

This includes detailed milestones from a financial perspective and all the evidence we have to ensure that value for money is created.

[Translation]

Senator Dagenais: Can you tell us how much money will be spent per region? If you can’t do that today, will you be able to provide that information later? It is important to get a regional breakdown of who will be getting the money. As you know, I’m a senator from Quebec.

[English]

Mr. McConnachie: Absolutely. That information can be provided, perhaps only partially for the moment. In the case of some of these agreements not all are negotiated yet. Some are in process so we may not have those final figures, but we can certainly provide the geographic breakdown for all the funds that have been announced and committed as of now.

We would be pleased to do that.

The Chair: Perhaps you could make sure that you do that through the clerk of the committee, please.

Mr. McConnachie: Certainly.

Senator Galvez: Thank you to the witness panel. I want to ask a question of Mr. McConnachie and then one of Mr. Beaudoin.

To follow up on the question of my colleague Senator Dagenais, efficiency and transparency are key in the exercise of fighting COVID-19. You have all talked about vaccines, testing, treatments, PPE, lab capacity and building Canadian capacity. These are related issues.

I have been informed, for example, that there are 35 projects on vaccines. The timing and the low cost of vaccines are of importance because once the vaccines and treatments are available they have to be at a reasonable price so that they are available to everybody in the population.

Are we diffusing the efforts because the amount of vaccine projects is too much? I follow what is going on in research. I know that there is less than a half-dozen very important labs in Canada and that researchers are all fighting for this capacity. Why are we diluting the effort instead of concentrating on what things can be developed faster?

On the one hand, it is true that we need building capacity, but on the other hand, we have to protect intellectual property. We have to keep this for future problems, pandemics or other viruses that may happen.

To Mr. Beaudoin, the supply chain on the PPE has been revealed to have a serious weakness because we are dependent on overseas manufacturers. We cannot continue in this way because it takes time.

Yesterday we learned in the Senate that some of these masks, for example, are produced in China by labour that is considered almost slavery. What are we doing in these areas?

Mr. McConnachie: I will respond to the first part. The funding that ISED is requesting through Supplementary Estimates (A) is focusing on a variety of different areas across the spectrum of research, manufacturing and pre- and post‑clinical trials.

In that regard the effort is not being highly diffused. We are focusing efforts on the limited research capacity available in Canada. I am not a scientist, so I will defer to you, Madam Senator, in terms of who the leading organizations are.

Certainly in our plan we are trying to ensure that there is an ability not only to develop and research vaccines and therapies, but that there are appropriate clinical and pre-clinical testing and the ability to create and scale up manufacturing opportunities.

Mr. Beaudoin: In terms of the questions on the supply chain and our dependence on overseas manufacturers, the reality is that every country right now is heavily dependent on overseas manufacturers. You have seen in these estimates that one of the items we are requesting is $37 million to build capacity to produce masks specifically in Canada through an ISED program.

I will refer the question to my colleague Eric Dagenais who is currently managing the procurement of PPE for the Public Health Agency. Perhaps he can shed a bit more light on this issue.

Eric Dagenais, Vice-President, Public Health Agency of Canada: Thank you for the question, senator. You are absolutely right that at the beginning of this crisis Canada was not producing much of the PPE we required.

ISED launched a call to action for Canadian industry to retool. I can report that in the last three months a number of Canadian companies have agreed to produce PPE. Canadian companies have now retooled and are producing medical gowns, face shields, N95s, surgical masks, hand sanitizers and ventilators.

We are absolutely moving in the direction of having a domestic capacity for PPE so that it is available in times of pandemics.

Senator M. Deacon: Welcome and thank you to your teams that have been instrumental in providing daily parliamentary briefings. That certainly goes by noticed and is helpful for parliamentarians.

I have three questions. I will go as quickly as I can. Two of them follow up a bit on Senator Galvez’s comments.

First, coming back to the national medical research strategy and the $435 million attached to it, it is important for vaccines, tracing, tracking and sequencing, but we know that Canada is not the only country to undertake this work.

I am wondering today how we are working with other countries to ensure that we are getting the best bang for our buck, that the $400 million is being spent effectively, and that there is no or limited duplication on our part when it comes to other international efforts to combat the virus. That is my first question.

Mr. McConnachie: The focus of the investments in the second phase of medical countermeasures is very much about building Canadian domestic capacity. This is not to suggest that we are not leveraging international relationships. ISED’s mandate or role in this regard is to mobilize our capacity and to ensure on the research, manufacturing and delivery sides that we are able to produce for the current and future needs of Canadians.

Senator M. Deacon: My second question concerns $30 million in payments to support women’s shelters and sexual assault centres pursuant to the public health events of the National Concern Payments Act.

As we know and as we went through this round of lockdown, it became very clear that families being kept in close quarters for extended periods of time led to an increased instance of domestic abuse. I am wondering how we are preparing for a possible second wave and subsequent lockdown that might follow.

We have the benefit of learning and foresight here, and I am wondering what we are doing at the federal level to prepare for another possible spike in domestic abuse cases. Is this $30 million part of the plan?

Mr. Beaudoin: I am not seeing the $30 million you are referring to in my estimate, or was it a previous estimate?

Senator M. Deacon: It is in here, $30 million to support women’s shelters and sexual assault centres pursuant to the public health events of the National Concern Payments Act.

Perhaps that is something that might be better responded to in writing.

Mr. Beaudoin: Yes, I think we will have to respond in writing because I don’t see it in here. I am wondering if it is us or Health Canada.

Senator M. Deacon: When we look at the PPE conversation that Senator Galvez started with, let’s look at the local production of PPE materials. We are seeing that a lot of companies were looking and are continuing to look to produce PPE, but they were being pretty stymied and roadblocked by red tape at the licensing level.

I am wondering: Is there a backlog of applications in this regard? Are they being expedited so that we can be moving to increase our capacity? Is this $37 million a part of our preparations for the second wave of possible infections, or will more requests likely be coming as we approach the fall?

Mr. Beaudoin: The only $37 million I have is for the production of masks in Canada. There was an announcement of a 10-year contract for Medicom to produce 24 million N95 masks per year. That was done through the ISED innovation program.

Senator Klyne: Welcome and thanks to our panel of guests. My question is for Indigenous Services Canada, or ISC. I am going to say upfront that you will probably want to reply in writing. I accept that for the committee.

The COVID-19 crisis has demonstrated that when it comes to pandemics Indigenous communities face unparalleled vulnerabilities that stem largely from social and economic issues, not the least of which include efficient community infrastructure centred on health and education, educational attainment, critical housing shortages and boil-water advisories.

The COVID-19 response for Indigenous communities has been very positive, but it also demonstrates the need to address social and economic issues predating the COVID-19 crisis which, if left without a substantial response during the pandemic, would have only worsened and likely come under some level of inquiry. We shouldn’t need a crisis to solve a crisis.

In your statement to this committee you began to provide an outline of where these estimates of spending are aimed. Many of the programs and services you mentioned like First Nations Child and Family Services and addressing Jordan’s Principle are representative of symptoms and not necessarily eradicating the problem. Ergo the status quo may prevail.

Could you tell this committee where these estimates of spending are aimed at addressing the most important areas of unresolved social and economic issues and if there have been any discussions within the department about ensuring that these measures complement solutions in the medium and long term toward addressing the unresolved economic and social issues?

Mr. Thompson: Thank you very much for your question, senator.

In response to COVID-19 we have tried to allow for maximum flexibility for First Nation communities to answer because we see that we have better results in communities when they are determining the intervention they need to do themselves.

Through the supplementary estimates we have received to address COVID-19 we have tried to look at our program terms and conditions and to make amendments so that we give the maximum flexibility to communities.

If it had to do with infrastructure, if it had to do with the procurement of goods that they needed, if it had to do with education, if it had to do with family violence prevention and so on, we were trying to provide them with maximum flexibility.

That being said, the department still continued to invest a lot in infrastructure. The authorities in our Main Estimates for infrastructures have continued to try to address the situations you are referring to.

I have to acknowledge that this year, because of COVID, brought a particular challenge to the organization because some of the communities have been closed down. It may have been way more difficult to ship the material needed to make infrastructure investments.

We will be assessing the situation at the end of this crisis, but you are correct that we are concerned about the progress. Hopefully we have been able to continue to make progress in these key elements, but I have to admit that it had an impact.

I don’t know if my colleague Ms. Gideon wants to enrich the answer that I just provided because she was in the forefront of the response as Senior Assistant Deputy Minister for First Nations and Inuit Health Branch. Valerie, is there anything you would like to add?

Valerie Gideon, Senior Assistant Deputy Minister, First Nations and Inuit Health Branch: I had experience managing the H1N1 crisis for the Ontario region of the First Nations Inuit Health Branch that was part of Health Canada at that time.

I would say that we were much more ready this time in terms of having the capacity, both internally and externally, to support communities in activating and implementing their pandemic plans.

However, your point remains that it demonstrates there continue to be inequities in access to health services, for instance, as well as the determinants of health. I think our minister has spoken very strongly and very eloquently with respect to the fact that we still have a lot of progress to make.

I would say, though, that we have invested a lot in our partnerships with First Nations, Inuit and Métis. That has actually enabled us to be able to move much more quickly in this response.

Therefore, I believe we can sustain that momentum in moving forward toward our continued progress in addressing inequities and improving outcomes.

Senator Klyne: I am satisfied with that. I will probably follow up in another way.

Senator Boehm: I thank our witnesses and their respective departments and agencies for all of the wonderful work they are doing during this unprecedented and critical time.

My question follows on a few that were put by my colleagues but perhaps with a little bit of a twist. Shinzo Abe, the Prime Minister of Japan, recently declared his intention to create a COVID-19 vaccine patent pool where the patents for vaccines when they are developed should be put under joint management of the international community to provide a framework for distribution particularly in those countries that are hardest hit, that are poorest or where we haven’t yet seen the full impact.

At the same time the German government has bought a stake in a company in Germany that is developing a vaccine to prevent the takeover of that company by, shall we just say, a foreign entity.

In this current environment there is always the danger of beggar-thy-neighbour type policies emerging where some country could say, “It is me first and don’t worry about the rest of them.”

Perhaps this could be a question for Mr. Beaudoin, but also perhaps for ISED. Are there ongoing consultations with other partners about looking at something that would be in the common good for the planet? That is my first point.

Also, as we are involved in developing a vaccine, how are the plans for distribution coming along? I am assuming that there would be great consultation with the provinces and the territories as well as with other entities. Are particular groups being identified as being more vulnerable? What about seniors? What about Indigenous peoples as well?

Is all of that being taken into consideration in this planning phase?

Mr. Beaudoin: Perhaps I could respond from the Public Health Agency perspective. As you know, our infectious disease prevention and control branch is heavily involved in vaccines in our lab in Winnipeg.

The senior DG of the lab is here today. Perhaps Ms. Elmslie could give us a bit of light on the work we are doing with vaccines and international partners on that front.

Kimberly Elmslie, Vice-President, Infectious Disease Prevention and Control Branch, Public Health Agency of Canada: Thank you very much, Mr. Chair, and thank you very much, senator, for the question.

As Mr. Beaudoin indicated, we are working very closely with the international community. When it comes to vaccine research and policy discussions about how we operate internationally in the patent space, there are opportunities for sharing not only data but also the important considerations around intellectual property and its protections.

Our work with the WHO as well as our work through the global health security committees with which we are involved bring us into those policy discussions. I can assure you that we are well activated and involved in those.

I would ask my colleague at ISED if he would like to add anything to the patent question before I go on to the important question you raised, senator, with respect to vaccine delivery. I will turn to him in case there is anything he would like to add.

Mr. McConnachie: I will be very brief in the interests of time. Obviously ISED is very interested in protecting Canadian intellectual property. One of the principal vehicles we have to do so is through the Investment Canada Act. There have been no changes to the act recently, although enhanced scrutiny is being provided on any files that have come our way through that.

In addition, the security and intelligence community via CSC and CSIS continue to play an important role in supporting us and the rest of government in terms of protecting intellectual property as well as preventing government threats from cybersecurity.

Ms. Elmslie: I will now return to the question of vaccine delivery. Very importantly the Public Health Agency of Canada plays a fundamental leadership role in working with the provinces and territories when it comes to vaccine delivery. Our work is already under way in planning for this. We have in place a long-standing advisory committee of experts, the National Advisory Committee on Immunization that provides scientific analysis and advice on the deployment of vaccine throughout the country based on regulations, obviously.

This summer, their work will lead to some interim guidance with respect to possible priority populations. They will continue to work with us as we roll out plans for vaccination to ensure that all of the issues around vulnerable populations and priority populations are well dealt with.

Senator Duncan: Thank you very much, to the witnesses, for their presentations.

I have two questions, both for Indigenous Services Canada, and I would like to ask to have the response to my first question in writing, please.

The $468.2 million in vote 10(a) is directed to the safety and well-being of First Nations children and families living on reserve. What is the amount budgeted either through land claim agreements or, as our witness Mr. Thompson mentioned, provincial and territorial agreements or other fiscal arrangements for First Nations children and families living off reserve?

I am particularly interested in a detailed written response outlining an estimate. I understand for privacy concerns that it may not be broken down by province and territory. Could we perhaps have an aggregate amount of the number of children and families being assisted through this program?

In light of the Missing and Murdered Indigenous Women and Girls inquiry, I am interested in its recommendation that there be a basic income established for families. What is the estimated amount of assistance provided through the program per family? Perhaps I could have that response in writing.

My second question has to do with horizontal items. Indigenous Services is contributing $4 million as part of funding to respond to the National Inquiry into Missing and Murdered Indigenous Women and Girls. The funds are described as operating expenditures and contributions to fund the operational costs of new shelters.

The escalation of family violence mentioned by my colleague Senator Deacon has been mentioned repeatedly. In light of the criticism about the lack of response by the government to this report, the escalation of family violence and COVID-19, how quickly are these funds flowing to communities?

For example, I note that CMHC in this horizontal funding estimate has monies for the creation of building new shelters on reserves. The time for building shelters is long past. This money is desperately needed in communities.

Could the official please advise how quickly this money is flowing?

Mr. Thompson: With regard to the first element of the question, the department will be providing an answer in writing for sure. With regard to the second question, you are correct to say that this is a horizontal initiative.

The supplementary estimates are providing $4.2 million in new funding to address the need for violence prevention, funding and shelters for the Indigenous community and to support Indigenous-led prevention initiatives for community awareness including Indigenous men and boys.

The funding is now available for the department and we are working closely with the communities. We will be integrating that funding into contribution agreements. We are expecting the funding to be available very quickly.

I can also provide additional details to the committee in writing on this point.

The Chair: Mr. Thompson, what would be your time frame, please?

Mr. Thompson: Very quickly. We will be reaching out to the appropriate program and we will be following up in a most expedited way.

The Chair: Perhaps you could send it to the clerk, please.

Senator Loffreda: Thank you to our panellists for being here. It is a pleasure, as always, to conclude this very interesting session.

My question is for the Public Health Agency of Canada and/or Innovation, Science and Economic Development Canada.

Regarding the amounts and funding requested, could you elaborate on the considerations and/or progress you have made in helping our health communities in the digital transformation of health care and all critical technology and aspects surrounding this area? This is now a must in the times in which we are living, as we all know.

In some North American hospitals close to 50% of visits are now virtual. Some CEOs are saying that the horse has left the barn in this area. Was it considered, and can we do more?

I have another question. According to the Canadian Institute for Health Information over $250 billion is the amount that Canada spends annually on health care. Some studies indicate that less than 2% goes to research and innovation.

Are you satisfied with the amounts that have been allocated to your budgets? Do you feel we should be spending more in this area given the times we are living in? What role do you plan on playing in improving this, if so?

Mr. Beaudoin: I think both of your questions are probably better directed to Health Canada than they are to us. There is no funding in this ask for digital health care. This is an issue that is led by Health Canada.

We are not involved in the amount of spending in health care. We are involved in research in terms of our own labs, but we are not involved in the broader research spending on health care in the country. That is more a Health Canada-led issue.

Mr. McConnachie: The funding we are requesting in Supplementary Estimates (A) is very purpose driven, but to the question posed by the honourable senator health care, informatics, connecting Canadians and making improvements on the digital front are all very key investments that our department supports.

I would flag that the Innovation Superclusters Initiative is precisely designed to address clustering around some of these areas and to promote development of our economy.

In addition, the work being done by our strategic telecommunications sector to increase broadband infrastructure throughout Canada is a pivotal enabler of many of the services that would be required for hospitals and other areas of the medical sector to enable digital delivery of services.

[Translation]

Senator Forest: My question relates specifically to Innovation, Science and Economic Development Canada. In regards to the funding for the national medical research strategy, Quebec has an extraordinary ecosystem when it comes to research. Specifically, I’m talking about genomics, artificial intelligence, biomedical research and research in marine biotechnologies. Will any of the funding you’re requesting today be given to Quebec organizations, so that they may contribute to the very important research being done on COVID-19?

[English]

Mr. McConnachie: Thank you once again for the question. As I previously mentioned, I do not have a geographic distribution of the funds we are requesting through this supplementary estimates exercise.

However, I would be pleased to respond to both questions that have been posed in that regard in a written follow-up to the clerk, if that pleases the chair.

The Chair: Before we conclude I would ask senators to each ask a question, please, and this would take care of the time allotted for our first panel.

Senator Marshall: I have one question for Indigenous Services Canada. There is one item under the COVID-19 program and one under vote that seem to be similar. Could you make the distinction?

Some $4 million is budgeted for contributions to improve the safety and security of Indigenous women, children and families, and then $10 million is also budgeted for payments to the Family Violence Prevention Program pursuant to the Public Health Events of National Concern Payments Act. They seem to be similar. What is the distinction between the two programs?

Mr. Thompson: The first element, the $4.2 million, is in relation to the final report of the National Inquiry into Missing and Murdered Indigenous Women and Girls; $1 million for the Métis organization in 2020-21; $3 million for the Moose Hide Campaign Development Society in 2020-21 to support the implementation of its five-year strategic plan; and $200,000 for operational funding. That is the $4.2 million.

The $10 million related to the Family Violence Prevention Program provides operational funding to 46 emergency shelters on reserve and in Yukon. That is the composition of the $10 million.

Senator Harder: My follow-up question, then, is with respect to FedNor. I would be interested if ISED could give us a better insight into how that funding is designed to deal with COVID issues in rural communities in Ontario.

Mr. McConnachie: I will refer that to my colleague Mark Schaan.

Mr. Schaan: The additional funds provided to FedNor were through the Regional Relief and Recovery Fund of which there were two components. One was for the network of community development organizations and the rest was directed directly at FedNor.

They are designed to be RRF to provide additional liquidity supports to others who may not have been able to access some of the liquidity supports provided through other channels including the BDC or the Canada Emergency Business Account.

The $25.5 million to the Community Futures Network provides micro loans to important community entities and organizations in northern Ontario. Then the $24 million to FedNor is to provide supports to small- and medium-sized businesses for emergency liquidity support with similar characteristics to those of the Canada Emergency Business Account.

It is very much generated on additional supports to allow those thriving businesses to get through the COVID crisis. A distinct intake was put in place for exactly those firms.

Senator Harder: Do those funds have similar oversight as other programs such as the BDC program?

Mr. Schaan: As my colleague noted, we have imposed quite significant overall operational controls on all of these funds, including supports for internal audit and continued monitoring of the funds. They have a very strong oversight mechanism to ensure they are well utilized.

The Chair: This concludes our first panel, honourable senators.

As we have noted, there is no doubt that we have a common denominator. It is about transparency, accountability, predictability and reliability for Canadians.

To the witnesses, thank you very much for your professionalism.

[Translation]

First of all, from the Department of National Defence and the Canadian Armed Forces, we welcome Major-General Hercule Gosselin, Chief of Program. With him are Cheri Crosby, Assistant Deputy Minister (Finance) and Chief Financial Officer; Troy Crosby, Assistant Deputy Minister (Materiel); and Rob Chambers, Assistant Deputy Minister (Infrastructure and Environment).

[English]

We also welcome from the Canadian Air Transport Security Authority, Michael Saunders, President and Chief Executive Officer. He is accompanied by Nancy Fitchett, Vice-President Corporate Affairs and Chief Financial Officer and Neil Parry, Vice-President, Service Delivery.

[Translation]

Also, from Public Services and Procurement Canada, we welcome Marty Muldoon, Chief Financial Officer, Finance and Administration Branch; Lorenzo Ieraci, Director General, Office of Small and Medium Enterprises and Stakeholder Engagement; and Gini Bethell, Assistant Deputy Minister, HR-to-Pay Program Office.

[English]

Welcome to all of you and thank you for accepting our invitation.

[Translation]

Cheri Crosby, Assistant Deputy Minister (Finance) and Chief Financial Officer, Department of National Defence and the Canadian Armed Forces: I want to thank the chair and all honourable senators for inviting us to present, on behalf of the Department of National Defence, the details of the Supplementary Estimates (A) for the fiscal year ending March 31, 2021. My colleagues and I look forward to discussing this important information before the committee.

[English]

I am Cheri Crosby, Assistant Deputy Minister (Finance) and Chief Financial Officer at Defence. Today I am joined by my colleagues, Troy Crosby, Assistant Deputy Minister (Materiel) and Major-General Hercule Gosselin, Chief of Program. I have prepared a brief statement, after which we are at your disposal to answer questions.

The Department of National Defence and the Canadian Armed Forces are requesting $743.8 million through the supplementary estimates. These estimates are aligned with the projected spending on defence. They take account of the COVID restrictions, and they will provide the required funds to continue the effective implementation of Strong, Secure, Engaged.

Funding for capital equipment will help ensure the procurement of Canada’s Joint Support Ship or JSS project, make sure it continues on track, and enable the availability of hangars when new jets arrive.

Funding for operations provides the resources Defence needs to ensure that Canada continues to do its part on important missions around the world, some of which have remained unchanged through the pandemic.

Turning to the Supplementary Estimates (A), these estimates represent an increase of 3.25% in DND’s current allocation. As a result DND’s budget will increase from $23.3 billion to $24.1 billion. This net change reflects increases in both vote 1 and vote 5 capital.

The changes and additions are summarized as follows: an increase in vote 5 of $585.7 million for the Joint Support Ship project. These funds will be used to continue building the first ship, to procure complex items like engines, to make sure that they are ready for the appropriate stage in the construction schedule, and to finalize the ship design to meet the Royal Canadian Navy’s ship design specifications and environmental codes.

[Translation]

The department is requesting an increase of $17 million. This amount will be reserved for infrastructure requirements under vote 5 for the Future Fighter Capability Project. These funds will be used to fully design the high-priority facilities to be located at Canadian Forces Bases Bagotville and Cold Lake, as well as for studies, surveys and [Technical difficulties] to develop the design [Technical difficulties] and other appropriate aviation shelters and continue the design work for the functions of [Technical difficulties], immediate response sectors from Cold Lake, forward operating locations, deployed operating bases and other locations in Canada.

[English]

An increase in vote 5 of $5.3 million is required to complete the construction of the multinational headquarters building in Latvia that was begun in August 2019 as part of Operation REASSURANCE.

Finally, an increase in vote 1 of $136.2 million is required to support Canada’s contribution to three international missions, specifically $106.1 million for NATO assurance and deterrence measures in Central and Eastern Europe under Operation REASSURANCE.

The mission includes operational and tactical level demonstrations, manœuvres and enhanced interoperable activities with allies and partners. The $4.7 million is for support operations in Africa under Operation PRESENCE where the Canadian Armed Forces supports the United Nations Multidimensional Integrated Stabilization Mission.

Finally, $25.4 million is for CAF military training and capacity-building support in Ukraine under Operation UNIFIER. There are two requests from the Government of Ukraine where the Canadian Armed Forces, with support from Global Affairs Canada, are providing military training and capacity-building assistance.

[Translation]

The provisions reflect a determined and comprehensive effort to direct and allocate defence dollars responsibly and appropriately across a broad spectrum of related activities in support of defined corporate priorities during the fiscal year.

[English]

The Department of National Defence and the Canadian Armed Forces continue to deliver our essential national mandate while embracing fiscal responsibility and effective stewardship of resources.

In closing, my colleagues and I would be very happy to answer any questions you may have at this time.

Michael Saunders, President and Chief Executive Officer, Canadian Air Transport Security Authority: My name is Michael Saunders, President and Chief Executive Officer of the Canadian Air Transport Security Authority, also known as CATSA.

I am pleased to be here today with my colleague, Nancy Fitchett, Vice-President of Corporate Affairs and Chief Financial Officer, as well as Neil Parry, Vice-President, Service Delivery, to answer any questions you may have about our Supplementary Estimates (A).

[Translation]

As you know, CATSA is an agent Crown corporation fully funded by parliamentary appropriations and accountable to Parliament through the Minister of Transport. CATSA’s mandate is to protect the public by securing critical elements of the air transportation system as assigned by the Government of Canada.

[English]

In this context, CATSA’s mandate outlines its four core responsibilities within the realm of aviation security: pre-board screening, also known as PBS, the screening of passengers and their belongings prior to their entry into the secure area of the air terminal building; hold baggage screening, or HBS, the screening of passengers’ checked or hold baggage for prohibited items prior to it being loaded onto an aircraft; non-passenger screening, or NPS, the random screening of non-passengers accessing restricted areas at the highest risk airports; and the Restricted Area Identity Card, or RAIC, the program which uses iris and fingerprint biometric identifiers to allow non-passengers access to restricted areas of airports.

As we strive to deliver to Canadians, and more broadly the travelling public, our four core responsibilities, it is important to note that the COVID-19 pandemic has had an acute impact on the aviation industry in this country and indeed around the world. I can say that prior to disruption we were on track for another year of strong passenger growth and that we were exceeding our wait-time service level targets once again.

However, it was an extraordinary end to fiscal year 2019-20 with non-essential travel suspended and the country and the economy in various states of lockdown. Throughout this pandemic we have maintained uninterrupted security screening service levels while ensuring that every traveller can safely and efficiently enter the secure areas in our airports.

[Translation]

CATSA also works closely with partners and stakeholders in national and international civil aviation organizations to ensure we are in the best possible position to collectively address the ongoing challenges related to the pandemic.

[English]

An example of this is the recent Government of Canada decision to have CATSA take on the new function of temperature screening at PBS and NPS screening checkpoints.

By the end of July 2020 temperature screening will become mandatory for all those entering a security screening checkpoint at Canada’s four largest airports, being Vancouver, Calgary, Toronto Pearson and Montreal International. The requirement will be expanded to an additional 11 airports, the next 11 biggest airports, by September.

To conclude, Ms. Fitchett, Mr. Parry and I would be happy to answer any questions you may have that fall within our purview.

Marty Muldoon, Chief Financial Officer, Finance and Administration Branch, Public Services and Procurement Canada: Mr. Chair and committee members, thank you for the opportunity to appear before this Senate committee to discuss the 2020-21 Supplementary Estimates (A) for Public Services and Procurement Canada.

As the government’s central purchasing agent, Public Services and Procurement Canada, or PSPC, has been working relentlessly to support Canada’s response to the evolving pandemic. PSPC is buying vital supplies on behalf of the government needed in the immediate term as well as preparing for the longer term by ensuring Canada has enough personal protective equipment, or PPE, testing components and more as we move into the new phase of this pandemic. While our procurement efforts have taken centre stage, we also continued to meet the other areas of our mandate.

To support our ongoing operations PSPC is requesting $745 million in these estimates. These funds will allow us to continue our work in supporting the government’s fight against COVID-19, as well as our progress in addressing ongoing issues related to the Phoenix pay system.

To start, I would like to address our largest request of $500 million for COVID-19 procurement efforts. These funds will allow us to continue our pursuit of critical PPE and other supplies for a broad range of essential sectors. It is no secret that we are operating in a highly competitive global market.

The entire world is seeking out the same materials, be they masks, tests or gloves, and supply chains are stressed at multiple points. However, we have invested in on-the-ground logistical support and we are now seeing some stability in supply chains. Cargo flights of PPE and other supplies continue to arrive daily. In total, we have received 70 cargo planes carrying a variety of PPE and supplies, and nine boatloads of hand sanitizers have arrived in Vancouver. We also continue to receive approximately half a million N95 respirators every month from 3M in the United States.

At the same time we are tapping into domestic manufacturers that have retooled and ramped up production of PPE and other supplies right here at home. As of today we have put in place 27 contracts with Canadian manufacturers that are making supplies to fight COVID-19 on Canadian soil. They are now delivering supplies such as made-in-Canada face shields, gowns, ventilators, hand sanitizers and more.

As Canada’s economy begins to recover we are also making it faster and easier for other organizations to access PPE. Our new supply hub is an online tool with important resources to help connect buyers and sellers of PPE across the Canadian market as businesses and workplaces cautiously reopen.

At the federal level we are meeting the current need when it comes to procurement of PPE to support the government’s response to the pandemic, but we know that future requirements will only increase. We have structured many of our contracts to apply for a steady supply of deliveries over the coming months and even years. This is why you will see large order numbers compared to the deliveries to date.

As Canada’s economy recovers we need to be prepared for all scenarios including a potential second wave of infections. The funding we are seeking through supplementary estimates will indeed help us meet those needs.

I will now turn to the second part of our request, the $203.5 million for continued efforts to stabilize the Phoenix pay system. Even during crisis the Phoenix pay system remains one of the critical priorities of our government. We have seen significant declines in the backlog of pay issues over past months despite the complexities of working in these challenging times.

Since January 2018 the backlog of transactions has decreased by 64%. During the pandemic alone over April and May we were able to reduce the queue by about 29,000 transactions, all while continuing to administer pay for the close to 300,000 public servants across the country. This is a testament to the dedication of our hard-working compensation employees.

The funds we are seeking through Supplementary Estimates (A) will allow us to sustain employee capacity, increase our processing rate and increase the automation of as many transactions as possible through system enhancements. These funding requests touch on two major priorities and are critical to the work being done on both of these files.

If you will permit me, given this is National Public Service Week I would like to express my sincere thanks to the dedicated public servants who are continuing to deliver the services Canadians need during these challenging and difficult times.

Gini, Lorenzo and I look forward to your questions.

Senator Marshall: My two questions are for Ms. Crosby with the Department of National Defence. I will ask my questions first and then you can answer.

I want to speak about the highest expenditure item noted in Supplementary Estimates (A), the $585 million for the support ships. I think you referenced in your opening remarks that it was for the first ship, but I understand there are two in the package.

Since this is an ongoing project that has been in the works for a while, I am curious as to why it is included in Supplementary Estimates (A). Why didn’t you ask for the amount in Main Estimates? Main Estimates came down about three months ago, so it seems kind of odd that three months later you are in looking for another half a billion dollars for that one project.

My next question is much more general in that this project is part of the Strong, Secure, Engaged policy. Of the $180 billion budgeted for capital projects I think this would be one and I think it is around $3.5 billion. It is a substantial amount of the money for Strong, Secure, Engaged.

As I mentioned to you the last time you were testifying before the committee, the committee has been looking for financial and other information on Strong, Secure, Engaged since actually 2017. In every Finance Committee meeting that Defence has attended I have been asking for the information and I have never received it.

Last year we issued a report on military procurement. We raised the issue again and we still don’t have the information. The Parliamentary Budget Officer testified before us and he indicated that he was looking for similar information. He couldn’t get the information, and I understand he is still working on it.

That is where it was left until last week when I read several articles in different media. The one I am looking at now is the one from The Globe and Mail entitled “Auditors target Defence Department for poor oversight of military-spending plan.” Of course I was interested because it was about the military’s spending plan, and the item in the article about the Strong, Secure, Engaged plan that raised my interest was:

. . . the lack of monitoring meant senior defence officials were not receiving clear and accurate information about the state of the plan.

I went back and actually read the audit report. The report was really concerning. There was another reference to no formal department-wide process to validate Strong, Secure, Engaged initiatives and projects or to provide performance information. I thought that was really unbelievable because this was a $108 billion program. It sounds like you don’t have what I would have thought would be a state-of-the-art project management program system.

You have a major problem in the department. I suspect that is why we couldn’t get the information. I would like to know how you are to resolve the problem. You need something to manage the projects. We are talking about billions and billions of dollars. You need to provide reliable information, not just to your officials within the department but to parliamentarians and Canadians.

Could you respond to that question?

Ms. Crosby: Thank you very much for those many questions. I will see if I can chunk it into understandable pieces and respond. I will also call upon my colleagues for some of it.

Let’s start with the Joint Support Ship project in particular. When we tabled the mains earlier this year in February we asked for $266 million. This next request is supplementary to that.

I will turn in a moment to Mr. Crosby to speak about where we are in the process, but what I can tell you from a financial point of view is that in a very short time between February and now progress has been made in the program. We have been negotiating a contract and have a clear line of sight as to how much it will cost us. Again, Mr. Crosby can unpack that a little bit.

In terms of your bigger question about providing updated information on SSE I would like to remind the committee, as you will remember, that the total capital investment funding in Strong, Secure, Engaged provided Defence over the next 20 years with $553 billion. We are currently entering into year four of that SSE program. That money will support 129 initiatives, comprised of 333 projects.

I am happy to tell you that as of May 2020, 71% of those projects are now in implementation or closeout. That translates into 244 projects, some of which have made tremendous progress, particularly in the last year.

The good thing about moving into implementation and closeout is that not only are we making progress on the program but from a costing point of view we have greater fidelity on how much projects are costing. By the time a project gets to implementation, we actually know what the substantive costing would be as opposed to indicative costing.

Senator Marshall: Could I just interject here? I would like to know where is the information on the projects. We have been waiting three years. It seems like nobody outside the department can get it.

It even looks like now as a result of the audit report that people within the department at a senior level are probably not getting accurate and reliable information. It is left out there that you have a major problem, and I am not getting any reassurance that the problem has been recognized or that the problem has been addressed. We still don’t have the information.

The Chair: On this matter, Ms. Crosby, the time is up. I agree with Senator Marshall on awaiting information. Who today can commit to properly sending the information to the committee through the clerk so that if there are other questions to be asked of you we could follow up?

Senator Marshall: Mr. Chair, could we have the deputy minister of the department appear? It is terrible. We have been asking for three years. Even the Parliamentary Budget Officer can’t get the information. There is a big problem.

The Chair: Thank you, Senator Marshall.

Ms. Crosby, on the last comment from Senator Marshall, can you bring that to the attention of the deputy minister, please?

Ms. Crosby: Yes, Mr. Chair. Could I also add additional information for committee members? The Parliamentary Budget Officer requested an update and DND, Defence, provided a full update to the PBO office on June 12 as asked and on time.

We also look forward to producing our annual update to our investment plan in the fall.

The Chair: Thank you, Ms. Crosby. Could you please undertake an engagement with the chair to send immediately to the clerk the response you gave to the PBO?

Ms. Crosby: Yes, we will look into that.

The Chair: Thank you.

[Translation]

Senator Forest: I think it’s really important that we get that information. We’ve been asking for it for so long now, and for good reason.

I’d like to take this opportunity to recognize the hard work of the entire public service, especially right now, as we are dealing with this pandemic. This week is National Public Service Week. I want public servants to know how much we respect and appreciate them.

My question also relates to national defence. I’m very interested in the marine procurement policy. The estimates include $586 million to partially fund the construction of two Protecteur-class ships, HMCS Protecteur and HMCS Preserver, which began in 2018.

Those two ships will replace two former Protecteur-class auxiliary oiler replenishment ships. The contract went to Seaspan. What is the total budget for that project, including the design and construction of the two ships? The delivery date was originally supposed to be in 2022-23 but has been pushed back to 2023-24. Do you think both those projects can be delivered on time? Lastly, is the pandemic having any impact on Seaspan’s ability to deliver those projects on time, and without going over budget?

This concerns me, because Seaspan was part of a joint submission for the construction of a key icebreaker. So will Seaspan be able to deliver both of those ships?

[English]

Ms. Crosby: I will begin by answering from the financial point of view and then I will turn to Mr. Crosby to talk about the project itself.

The Joint Support Ship budget includes $3.1 billion for the purchase of two ships and then additional design and production engineering work, project management and some contingency for a total of $4.1 billion project authority.

I will turn it over to Mr. Crosby to continue talking about the project.

Troy Crosby, Assistant Deputy Minister (Materiel), Department of National Defence and the Canadian Armed Forces: I will address the question around both the delivery schedule as well as the impact we are experiencing from the pandemic.

At this point we are continuing to focus on delivery of the first vessel in fiscal year 2023-24 — in fact in mid-2023 — with the second vessel to follow two years later in 2025, so during that fiscal year.

Seaspan has done quite a remarkable job of managing the response to the pandemic. There have been impacts in the sense that working around ships in restricted spaces has clearly challenged them, but they have worked extremely hard with their employees to find a way to minimize those impacts and have continued to move forward on production.

We remain optimistic about those dates, although we recognize that the situation remains fluid with the pandemic and we need to be positioned for what may come in the fall and beyond.

They are making great strides in production. You may have seen some media coverage about the assembly of the vessel. The first vessel in particular is quite well advanced. The ship is comprised of 123 blocks and almost half of those are either substantially complete or actually in active production at this point.

[Translation]

Senator Forest: Based on the revised calendar for 2023-24, are you confident that the first ships will be delivered in 2023? Those two ships must be taking up all of Seaspan’s shipyard capacity.

[English]

Mr. Crosby: Mr. Chair, at this point we are seeing great progress on the first ship and we are confident in that 2023 delivery date.

Again, there is some uncertainty given the effects of the pandemic and a lot of work remaining to do, but at this point from what we are seeing we remain confident.

Senator Harder: Before I ask my questions I would like to associate myself with Senator Forest’s best wishes for National Public Service Week to the public servants that are presenting and through them to their teams.

My questions for Public Services and Procurement Canada relate to both components of the supplementary estimate request.

First, with respect to the PPE procurement, Mr. Muldoon, I wonder if you could give us a little more detail on the procurement that is under way. I am thinking, for example, that you referenced 3M continuing to provide important supplies for Canada.

In light of recent experience with 3M, have you been able to secure protections in place so that those supplies and those contracts will be honoured and not interfered with by the Government of the United States?

Also, could you give us a list of the domestic companies that are presently in your supply chain? I believe you said some 26. It would be interesting to see the distribution of those.

With your present forecasted supply chain from source countries I would be interested in, if not today, if you could provide us with the countries that are the source countries of the supplies we are receiving and the proportion for each country of the supply we are engaged in.

On the other part of your request, the $203.5 million for the I guess infamous Phoenix project, I would like to have your assurance that these would be the last supplementary estimates for this program.

I appreciate the comments you made with respect to how the backlog even in the COVID was reducing. I would like you to forecast and tell us when it will end. Also, could you provide us with what if any investments have been made on the replacement program by this time, and are any of the supplementary estimates devoted to the replacement?

Mr. Muldoon: I will look to my colleagues to augment these answers, but let me take on these very important questions right up front.

Just starting with the first question from the honourable senator on the $500 million being sought, it is probably worth situating the procurement lanes we are talking about. Generally, as the senator would well know from his former days in the public service, in our normal life we are procuring based on a confirmed order from another government department.

I believe you had the Public Health Agency of Canada appearing before you just prior to us. The vast majority of the procurement that we have been doing so far has been on behalf of PHAC. That lane is one track and a tremendous amount of materials, PPE supplies, have been procured through their direct confirming orders.

I would call this $500 million a second lane, if I could. It is really intended to allow for us, without confirming orders, to start to assemble an inventory for the future needs of other vulnerable sectors that are effectively in need of the PPE equipment and not necessarily served by our PHAC organization.

On track one I will turn it over to Lorenzo Ieraci in one moment to give you some sense of how that is working and the 3M protections.

In terms of Canadian suppliers, we have been working with a number of suppliers. I suspect we could prepare a list for you, but an example is Canada Goose and certainly others that have retooled their lines to help us. We will definitely get to you on that.

On the source countries, when I gave those opening remarks what I would say in response is the vast, vast majority of supplies is coming from China. That will continue for some time to come, but there is a very limited global supply of what we are after. It is primarily from China and the United States but we are ramping up Canadian supply. Lorenzo can speak a little more on that.

I also want to address your second question on the $203 million. Unfortunately I think I would be disingenuous if I were to say that this is the last time you would ever see us in a supplementary estimate. I will explain why. I think in each of the four preceding years we have been in the situation of post‑Phoenix go live. We have been receiving a yearly instalment of funding to allow us the augmented operational level to be able to address the implications, we well know and I know the committee has studied.

As we move forward, I am not sure when the end would be in sight. However, what we are doing and what we are very grateful to be seeing now is quite a tremendous stabilization. In fact now, as you heard in those metrics, we are starting to see the decline of the backlog.

The last thing on the replacement is that the Department of PSPC is not actually dealing with the replacement itself. That is being led by the Treasury Board of Canada Secretariat. That would be a question they would be well placed to respond to.

I will stop there and turn it over to Lorenzo.

The Chair: Mr. Muldoon, I will need to ask you because of the time factor if the next question could be answered in writing as soon as possible. We would appreciate that. Thank you for your information on the other programs and other questions.

Senator Smith: My question is for CATSA.

Part of your $312.5 million ask is to support negotiations with respect to transitioning CATSA to an independent not-for-profit entity.

How are negotiations going? When do you foresee them being completed, and how much money has gone into these negotiations to date?

Nancy Fitchett, Vice-President Corporate Affairs and Chief Financial Officer, Canadian Air Transport Security Authority: Thank you for the question. CATSA’s request in Supplementary Estimates (A) is for $309.4 million. The additional amount that you referenced is for Transport Canada.

Transport Canada is leading the negotiations for the potential sale of CATSA to what is known as the Designated Screening Authority. CATSA is not at the table. We play a support function to Transport Canada for these negotiations, so that would be a question that only Transport Canada could respond to.

I can say that within CATSA we were quite busy supporting Transport Canada in our last fiscal year and we spent less than a million dollars on that line of business.

[Translation]

Senator Dagenais: My question is for Ms. Crosby. For the past four years, the current government has been grappling with the notorious, but absolutely necessary, project to replace our CAF fighter jets. You said that you have already received $70 million this year to manage the tendering process, which has also been delayed once again. You are also getting an additional $16 million from the government because of the pandemic. That’s a lot of money. What will that money be used for, as you wait for the tenders to come in? That seems like a bit much to me. I would like some details on that.

Ms. Crosby: Thank you for the question. I’ll let Mr. Crosby answer that.

[English]

Mr. Crosby: The expenditures planned for this year include the ongoing project management expenses, staff salaries and such things, but there is an aspect of delivering the project that will happen outside of the actual competitive selection process for the provider of the aircraft. Specifically I am referring to the construction of infrastructure.

Part of the expenditures planned for this fiscal year will include investments toward infrastructure that need to be established in Cold Lake, Alberta, and Bagotville, Quebec. In that initial investment in infrastructure it doesn’t matter which aircraft comes through the competitive process. Its infrastructure will be required in any case.

In order to shorten the timelines to deliver operational capability to the Royal Canadian Air Force we are moving now to make sure that infrastructure is available when the aircraft arrive.

[Translation]

Senator Dagenais: My next question is for the witnesses from Public Services and Procurement Canada. The government was able to deploy technology and human resources quickly to respond to the demands of the various programs implemented as a result of the COVID-19 pandemic. We know that nearly everything happens electronically and it can happen quickly, even in the Government of Canada. Can you explain why we couldn’t use the same teams to solve the pay problems public servants are having with the Phoenix pay system? This problem has been ongoing for over four years. Were bad choices made on the supplier side to try to fix the Phoenix system problems, or was it simply because it wasn’t considered all that important?

Gini Bethell, Assistant Deputy Minister, HR-to-Pay Program Office, Public Services and Procurement Canada: Honourable senators, indeed, during the pandemic, our technology team continued working from home to be able to achieve the results we’ve seen today. Our role was really focused on pay for our employees. We were very successful during that time. It’s true that, since we work quite a bit with technology, we’re well positioned to work from home all the time. The vast majority of our employees, over 90%, worked from home and were still able to get through the backlog, as well as move forward with the implementation of many technological initiatives to continue to enhance the production system. That was our goal. As our minister announced yesterday evening in the House of Commons, our main priority is clearing the backlog. That has been our objective since mid-March, since the beginning of the pandemic.

[English]

Senator M. Deacon: My first question is being asked on behalf of my colleague Senator Galvez who is having some technical issues.

We all well know that the Province of Quebec requested the presence of the army to assist with long-term care facilities.

What we are looking at now is getting a sense of the cost of that operation and whether the army had specific COVID training. Did any of our operatives have a positive COVID test?

Ms. Crosby: I will start with the financials and then I will turn it over to Major-General Gosselin to tell you more about the actual operations.

In terms of financials, because we are in the middle of delivering our support we are tracking but obviously have not concluded what the overall costs are. I can tell you that we are tracking at this moment somewhere between $600 million and $800 million of COVID expenses in general. That would include the mobilization of 10,000 reservists and so forth.

As the PBO reported recently that cost alone is somewhere between $400 million and $500 million. We are tracking but will not really know the exact costs until this wave is finished. At a future time I will be able and will be happy to report out more specifically on the costs for Quebec and Ontario as they relate to long-term care facilities.

I will turn it over to Major-General Gosselin to talk more about the actual support provided.

Major-General Hercule Gosselin, Chief of Program, Department of National Defence and the Canadian Armed Forces: Honourable senator, thank you very much for your question.

Canadian Armed Forces members had the opportunity to receive some training prior to assisting a number of facilities in Quebec. As a result 50 members in total both in Ontario and Quebec contracted the virus.

I am pleased to report that at this point 44 members are out of isolation. Only six are safely finishing their periods of isolation.

Senator M. Deacon: That is great. I have a question on transport and a question for DND. I appreciate Senator Marshall’s questions and will build on one of them.

I have just been dipping my toes into the whole idea around defence procurement, especially our shipbuilding strategy, in the last year and a half. I have really tried to find connected information. My question today continues with ship procurement, cost overruns and delivery delays.

The first joint support ship was supposed to be delivered by Seaspan in 2019. It has been confirmed today that it is now expected in 2023 with a second ship in 2025.

The Royal Canadian Navy has been without a full-time support ship since 2014. The capability of the RCN is obviously clear and fundamental to our defence and security strategy of defending our own shores here at home and extending our reach abroad and internationally.

How has this delay affected the day-to-day operations of the RCN and how has it affected your long-term planning since, at least for now, we will not be seeing a full complement of these ships until at least 2025?

Ms. Crosby: Thank you to the senator for that question, and I will ask Major-General Gosselin to speak to it.

MGen. Gosselin: Indeed, the joint support ship has the capability required by the Canadian Armed Forces to operate within the total range of operations that the Royal Canadian Navy needs in the security environment which we are in.

As we speak now it has been an appropriate bridging means to allow us to conduct our operations in an effective manner, pending the JSS critical capability being delivered.

Senator M. Deacon: I am looking through my readings and I am wondering if someone could outline the function of the $2.8 million that was requested by Transport Canada for the negotiation of the potential transfer of aviation security screening services to a private not-for-profit entity.

If you could share with me or remind the committee of the impetus behind this change, that would be greatly appreciated.

Mr. Saunders: I will direct the response to our project executive lead on the transition, our CFO Nancy Fitchett.

Ms. Fitchett: I would like to clarify that we are representing CATSA. I believe the $2.8 million you are referring to is a request from Transport Canada and their lead role in negotiations.

I can tell you that CATSA has been the subject of discussions with respect to governance and funding for some time. Last year in Budget 2019 the Government of Canada announced its intention to pass the Security Screening Services Commercialization Act, which received Royal Assent last June. That act allows for the Government of Canada through Transport Canada to sell CATSA’s net assets to a new private not-for-profit corporation referred to as the DSA.

Again, Transport Canada is leading that initiative so any other questions on that matter should be directed to them.

Senator Klyne: Thank you to our panel of witnesses who are here this afternoon.

My question is for Public Services and Procurement Canada. The procurement of personal protective equipment and other services have been duly ramped up during the COVID-19 crisis. Many businesses across Canada, Indigenous and western Canadian businesses alike, retooled or pivoted their manufacturing or fabrication lines to answer the call and qualify as eligible suppliers to the federal government’s critical need to secure PPE.

The Government of Canada recently launched a new personal protective equipment supply hub to help organizations sell and buy PPE during the pandemic. There is also a commitment to increase federal procurement from Indigenous businesses to 5% for contracts over a million dollars.

In the last three months there have been a number of announcements publicizing substantial procurement contracts for the purchase of PPE awarded to predominantly Central Canada‑based suppliers, but I do not recall any similar announcements awarding PPE contracts to Indigenous owned or controlled businesses or businesses from the Western provinces.

Could you please provide this committee with a vendor list of PPE contracts in excess of a million dollars awarded by country other than Canada and by province and territory of Canada and identify which of those vendors are Indigenous owned or controlled businesses? In addition to receiving the list you are welcome to comment now if the chair agrees.

The Chair: If there are comments we would appreciate them, but make sure that we have that list through the clerk as soon as possible. Do you have any comments on this?

Mr. Muldoon: I will turn it over to Mr. Ieraci.

Lorenzo Ieraci, Director General, Office of Small and Medium Enterprises and Stakeholder Engagement: Thank you for this opportunity. Yes, as requested we will provide the list by country, province and territory as well as the Indigenous owned ones.

Over the course of the last three months, as was mentioned in the opening remarks, the Government of Canada through Public Services and Procurement Canada has been procuring aggressively to make sure that we can provide personal protective equipment to those who are most vulnerable, particularly those in hospitals and front-line settings. We have been looking to secure and have placed orders and procured much personal protective equipment. That information is available in terms of the orders that have been placed on our website.

Over the last few weeks and months we have been engaging with Indigenous companies. We want to continue to engage and engage with them more so that we can increase their participation in federal procurement. As was mentioned, initiatives such as the supply hub as well as our outreach and engagement of Indigenous companies are there to be able to increase their participation in federal procurement.

We will provide you with the list as requested.

The Chair: Thank you.

Senator Boehm: Thank you to the witnesses. I salute you during National Public Service Week. I recall in the good old days that this would be the week when deputy ministers would offer breakfast for the people in their department. I guess that is not happening.

I have three questions for Mr. Saunders of CATSA, and I will try to be as succinct as I can. I wanted to ask about the temperature screening approach. There is a lot of knowledge out there that there are issues with it, that temperature screening does not necessarily identify cases of pre-symptomatic or asymptomatic individuals or those who took medication to lower a fever, and that sometimes the results cannot be very accurate.

In fact, back in 2005, Dr. Tam was part of a study following the SARS outbreak when about 2.3 million people were screened at Canadian airports without a single case being detected.

The question is whether you are looking at previous studies and perhaps checking with other countries as to how this is being implemented considering that you are looking at over $300 million for this.

Also travellers coming into Canada from other countries would be subject to temperature screenings. Who pays for that? Is that the carrier or are we providing funds to these other countries? In some cases they might be poor countries that are sun-time tourist destinations. I would be interested in whether the estimates are meant to cover those costs as well.

Finally, with this June 12 announcement it behooves people travelling who have been sick to have a medical certificate, but they could also be rejected at the point of boarding an aircraft. There will be requests for compensation. Who pays for that? How will that be handled? Again, is it the carrier or are you looking at funding within this particular estimate?

Mr. Saunders: To start off, I would like to call your attention to the $300 million plus in the supplementary estimates requests which is not really associated with the temperature screening. That is something we are absorbing within our current budget. We can get into that in a little more detail should you wish, sir.

On the second question, the airlines are assuming the costs of screening individuals coming into Canada. I can refer to our Vice-President, Service Delivery, who has been for the last three to four weeks working exceptionally closely with our regulator, Transport Canada, to come up with a concept of operations, how this would actually work in airports and all of the other details. I think he is very well placed to answer some of the more specific questions around the thermal or temperature screening with your permission, Mr. Chair.

Neil Parry, Vice-President, Service Delivery, Canadian Air Transport Security Authority: With respect to the question around looking internationally and comparing with what others have done as it relates to temperature screening, we have been doing a significant amount of research over the last several weeks as to the types of equipment and technologies used to ensure the technologies we deploy at the airports for temperature screening are the ones that have the most accurate capabilities for doing temperature reading.

In terms of the driver behind the temperature reading and questions around its effectiveness in identifying somebody with COVID-19, it is something I would certainly have to defer to the lead departments like the Public Health Agency of Canada and Transport Canada.

As its role CATSA has been effectively requested to conduct temperature checks. In terms of policy decisions and discussions about the mitigations that are put in place within the wider aviation community, that falls under the purview of Transport Canada.

What I can tell you is that the international community, led by international organizations in aviation such as ICAO, International Civil Aviation Organization, and IATA which represents global air carriers, is looking to deploy consistent approaches at airports internationally.

Certainly thermal or temperature screening is being deployed more and more across the world in a number of countries including the United States, Europe, Asia and other locations. To be consistent with that approach Canada has adopted similar procedures in addition to other measures.

The Chair: If you want to add additional information, Mr. Saunders, subject to the questions you have heard from Senator Boehm, please do not hesitate.

Senator Duncan: I would like to follow up regarding the Canadian Air Transport Security Authority.

I note that the discussion in the supplementary document talked about the screening transfer of CATSA to an independent not-for-profit entity comprised of the Canadian aviation industry. I understand the $2.8 million is dealt with through Transport Canada. I would like to ask CATSA witnesses and the officials if we could have more information from Transport Canada.

While we are awaiting that, is the $309.4 million in operating and capital expenditures an amount that would be estimated for the operation of this independent not-for-profit entity?

My concern and what I would like to hear from CATSA is if there is any contribution from the airline industry and/or the airport operating authorities to the additional costs and so on that have been identified over and above this $309.4 million that you are asking for. Are there contributions from other entities to assist in your meeting the requirements?

Mr. Saunders: Again, it is a policy decision of the Government of Canada to look into the sale of the asset referred to as CATSA. That entity is negotiating or has negotiated to a certain extent with Transport Canada representing the Government of Canada. It has been comprised of representatives from major airlines and airports in Canada.

As the Vice-President Corporate Affairs and CFO of CATSA, Ms. Fitchett indicated that the entity is called the DSA. In terms of the amount of the supplemental funding, its breakdown and if that has linkage to the DSA and the contributions, I would again ask for our VP and CFO to provide more clarity on that.

Ms. Fitchett: To clarify, the $309 million that CATSA is seeking is solely for CATSA as a Crown corporation to continue its operations for this fiscal year. There is no amount in there related to the potential future operation of the new entity after the sale of CATSA should it proceed.

There is an amount within the $309 million of $3.6 million for CATSA to support Transport Canada through the negotiations that may occur this year.

Senator Duncan: In the presentation of the witnesses we just heard the words “may occur.” Is there a chance that these negotiations may be put in abeyance while we cope with COVID-19?

Mr. Saunders: Yes, it is possible. Just to reiterate, CATSA is the asset. We are not at the negotiation table. However, a committee of our board of directors receives regular updates from Transport Canada.

It is our understanding that due to the ongoing pandemic both Transport Canada and a consortium of airports and air carriers that make up the Designated Screening Authority have deferred or at least pushed the decision to negotiate down the field or delayed it to a certain extent.

We are waiting for information from Transport Canada such that the DSA has reached out to them to re-establish negotiations. We are there to support the Government of Canada, i.e. Transport Canada, and as such this is where some of the funding would come from. We have already supplied a great deal of documentation, expertise and presentations to both the DSA through Transport Canada and to Transport Canada.

If in fact the negotiations continue, we are at the service of the Government of Canada. One has to recognize the precarious state of finances of both the airports and the air carriers in the current pandemic. Therefore, we will wait to see what transpires.

Senator Loffreda: I thank our panel for being here. It has been a great session with good questions.

I wanted to outline that Quebec’s chief coroner ordered a public inquiry into COVID deaths at long-term care homes in Quebec. I thank National Defence for being there when needed.

A military report revealed that the province’s homes like those in neighbouring Ontario struggled with severe staffing, PPE shortages and other troubling issues. Is there any update on these issues? Given this ask and all of the comments and suggestions we have had around PPE and the equipment required for COVID-19, are these issues resolved at this point in time?

Mr. Muldoon: I am not sure, Mr. Chair, if that question is directed at PSPC. If it is, I can provide a partial answer.

Senator Loffreda: Yes, it could be directed to yourself for a partial answer and then to National Defence. I would appreciate it if anybody on the panel, or between you, could answer it and reassure Canadians in Quebec and Ontario that these issues are solved so that we can move forward with assurance.

Mr. Muldoon: Thank you very much for the added clarification. The question on what was observed or the outcome of all of that might best be directed to the health authorities responsible, typically the provincial health authorities. At the very least in our Canadian federal structure that would be Health Canada or the Public Health Agency of Canada.

That said, on the supply side of PPE I mentioned that there were two supply lanes. One is normal acquisitions confirming orders. We supply PHAC, National Defence or any government department with the requests they made for PPE. PSPC is here to serve.

In terms of the $500 million for the added capacity for our department to buy additional and basically be ready for broader needs beyond the emergency and direct front-line health-care worker that PHAC takes care of, we are asking you to consider on our behalf that we can go ahead, go faster, further and build up a critical amount of additional supply for future requirements.

Senator Loffreda: That is very reassuring, and I thank you very much for that answer.

The Chair: Are there any comments from Defence?

Ms. Crosby: Obviously we are not currently supplying PPE outside of the CAF, but perhaps I can ask Major-General Gosselin to speak to our own internal supply of PPE or our transition as we support provinces with this pandemic.

MGen. Gosselin: The Canadian Armed Forces are completing their mandate in direct support of the long-term care facilities in Quebec. For our transition to take place certain sets of criteria need to be met. One of them is the capacity for long‑term care facilities to be in a position to conduct their operations, which means that these organizations would have the required equipment to be functional.

At this point we are in position to conduct that transition. We are working closely to support the Canadian Red Cross which will keep supporting these centres so that the help people need is in place.

From the DND perspective, what we observe is that although the situation is a challenge the conditions are set for the transition to take place and for the support for people living in these institutions to be looked at.

Senator Loffreda: This is very comforting. Thank you very much for the answers and for all the help you have given us.

The Chair: This brings us to the end of our second panel. I want to take this opportunity to say to our professional public servants, thank you for sharing information with us. I hope you can send the answers we have asked for in writing to the clerk of the committee as soon as possible.

Honourable senators, I bring to your attention that our next meeting is scheduled for Monday, June 22, at 11 a.m. EST. We will be receiving Minister Qualtrough. Subsequent to her questions and comments, we will look at a draft report of the supplementary estimates to be tabled in the chamber.

To senators and staff, thank you very much. To the public servants again, thank you for your professionalism.

(The committee adjourned.)