THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Wednesday, November 20, 2024
The Standing Senate Committee on National Finance met with videoconference this day at 6:46 p.m. [ET] to study matters relating to federal estimates generally and other financial matters, and to examine the practice of including non-financial matters in bills implementing provisions of budgets and economic statements.
Senator Claude Carignan (Chair) in the chair.
[Translation]
The Chair: Good evening. Before we begin, I would like to ask all senators and other in-person participants to consult the cards on the table for guidelines to prevent audio feedback incidents. Please make sure to keep your earpiece away from all microphones at all times. When you are not using your earpiece, place it face down, on the sticker placed on the table for this purpose.
Thank you all for your cooperation.
I wish to welcome all of the senators as well as the viewers across the country who are watching us on sencanada.ca. My name is Claude Carignan, senator from Quebec, and chair of the Senate Committee on National Finance.
Now, I would like to ask my colleagues to introduce themselves starting from my left please.
Senator Forest: Welcome. Éric Forest from the Quebec Gulf senatorial division.
Senator Loffreda: Welcome. Tony Loffreda from Montreal, Quebec.
[English]
Senator MacAdam: Jane MacAdam, Prince Edward Island.
Senator Ross: Krista Ross, New Brunswick.
[Translation]
Senator Smith: Larry Smith from Montreal, Quebec.
The Chair: For the first part of our meeting today, we will hear from officials from Public Services and Procurement Canada to provide further insights into federal procurement practices and address the concerns raised in the Auditor General’s report 5 relating to Professional Service Contracts.
We are pleased to welcome Dominic Laporte, Assistant Deputy Minister, Procurement Branch, and Lysane Bolduc, Director General, Professional Services Transformative Solutions Sector, Public Services and Procurement Canada. Welcome.
We will now hear opening remarks from Mr. Laporte for five to seven minutes. Afterwards, we will have questions for you.
Dominic Laporte, Assistant Deputy Minister, Procurement Branch, Public Services and Procurement Canada: Thank you, Mr. Chair and members of the committee. Let me begin by acknowledging that we are gathered on the unceded territory of the Algonquin Anishinaabeg peoples.
Joining me today is Lysane Bolduc, Director General of the Professional Services Transformative Solutions Sector, or PSTSS.
I’d like to thank the committee for inviting us today to speak to the findings of the reports tabled by the procurement ombud and the Auditor General of Canada related to professional services contracts.
[English]
Public Services and Procurement Canada, or PSPC, is responsible for managing procurements and establishing contracts on behalf of departments and agencies. These, collectively, are worth $27 billion each year.
During the pandemic, PSPC played a key role in keeping the work of the Government of Canada going as well as providing key support to provinces and territories. We are particularly proud of our role with regard to the urgent procurement of critical supplies and life-saving vaccines.
In the case of ArriveCAN, both the Auditor General and the Procurement Ombud have identified areas where we need to strengthen our oversight, notably related to documentation and to our procurement processes regarding IT consultants.
We accept these recommendations in full and have already implemented a series of concrete measures to strengthen our processes.
Late last year, PSPC took the unprecedented step of suspending all departments’ and agencies’ delegated authorities to procure professional services until they formally agreed to a new set of more rigorous terms and conditions and were able to demonstrate adherence to PSPC. To date, 99 departments and agencies, including the Canada Border Services Agency, have signed on to these agreements that require them to include provisions in their solicitations which will result in increased transparency from suppliers on their pricing and their use of subcontractors.
We are also taking action to strengthen existing control and oversight for professional services contracting, especially with regard to task authorization. We now ensure that task authorization includes clear tasks and deliverables and identifies the specific project or initiative on which a resource will be working.
We have reviewed our evaluation requirements to more effectively validate that suppliers have the necessary qualifications and proven work experience.
We know that to demonstrate sound use of public funds, our processes and decisions need to be clearly documented. Transparency is our primary concern.
[Translation]
As such, we have taken action to ensure more robust procurement files and documentation. We are requiring that client departments obtain copies of résumés and evaluation grids that demonstrate that resources meet qualification and experience requirements. We are also requiring copies of invoices accompanied by time sheets, as well as confirmation that proof of security clearances has been received from clients before any work is undertaken.
[English]
We have also implemented new documentation requirements to enhance the tracking of work progress and delivery timelines and a new mandatory checklist which now needs to be completed for all professional services procurement files.
We have created the Contract Quality Assurance and Records Compliance Office to ensure that procurement policies and processes are followed and business decisions are properly documented. So far, this new office has launched tools for peer‑to-peer, supervisor and director reviews and has completed three review cycles since April, representing more than 450 individual files.
We’re also improving training and assistance for contracting authorities with both PSPC and client departments.
In April, we launched a new sector headed by Ms. Bolduc to ensure better oversight, consistency and control over the procurement of all categories of professional services.
[Translation]
In closing, I know that there have been many concerns raised in the media and in parliamentary committees regarding federal procurement and the integrity of the system.
We share those concerns and together with our procurement officers who work diligently every day, we remain committed to working to continue to improve and safeguard the integrity of the government’s procurement system. Thank you. We are ready to take your questions.
The Chair: Thank you, Mr. Laporte and Ms. Bolduc. We will now begin the round of questions with Senator Forest.
Senator Forest: My questions are aimed at trying to understand what happened, since many concerns have been raised.
One of the major problems the Auditor General identified was that in around 95% of cases, the departments failed to justify using non-competitive contracts. How is it possible to be unaware of a rule that seems to me basic for awarding a sole-source contract?
Mr. Laporte: Thank you for the question. I think that refers to the Auditor General’s conclusions in the McKinsey case.
One of the issues raised was that the federal standing offers were non-competitive. That led to Public Services and Procurement Canada reviewing its approach. Since we were dealing with McKinsey and other suppliers that held intellectual property rights to their methodology, we had a non-competitive standing offer by which the departments used qualified resources.
Of course, one of the conclusions the Auditor General and the ombud reached was that every time a task authorization was issued, the task verification itself should have been justified.
We took measures and abolished non-competitive procurement tools. I would say that the practice, in place since 1995, didn’t favour just one supplier. It was open to six different suppliers with non-competitive tenders. That practice had to end, and we put a stop to it.
First, when there is justification, competitive contracts have been the standard since then. Second, we ensure that the contracts are properly documented.
Senator Forest: In the case of non-competitive contracts, was an estimate submitted or was there a standing offer and you just became aware of the cost at the end?
Mr. Laporte: For the professional services contracts we called “benchmarking services”, each supplier documented its catalogue of services. It contained prices and consultation services. From the start, it was like looking at a catalogue.
However, each time a client department used one of the procurement tools, which was really the exception, there was no justification for why we needed to use a non-competitive process for each task authorization.
Senator Forest: One of the problems faced by many organizations is that once they’ve started using a software suite, they have no choice but to keep the same IT service provider.
At the federal government level, I imagine that IT investments must be huge. Are there measures in place to prevent PSPC from getting stuck with the same IT solution till death do us part?
Mr. Laporte: That’s a very good question. I will turn to Ms. Bolduc to fill in anything I miss.
First of all, we start with the principle that competition is the standard. I think people have become more aware, which prevents us from being stuck with a specific brand because we’ve invested a lot in that software suite.
We do provide procurement solutions, but we are not a client. Each department has its own needs. In addition, I think that when we call for competitive bids and define a department’s needs, not based on one particular company’s solution but generically, we can avoid solutions where we are held hostage for years because we’ve invested a lot in that solution.
I’ll turn to Ms. Bolduc to fill in anything I missed.
Lysane Bolduc, Director General, Professional Services Transformative Solutions Sector, Public Services and Procurement Canada: I would like to add that for complex IT solutions, the procurement processes for new contracts are planned years in advance. Contracts contain provisions that dictate that the company that already has the contract needs to provide for a transition period with the company that wins the contract. That is provided for in the contracts.
When we change technologies, it clearly adds an extra layer of complexity, and there are contractual mechanisms for making the transition.
The Chair: I would like to ask a question to clarify something. You said that in the case of McKinsey, PSCP used the process for companies that held intellectual property rights. I may have misunderstood, but what was McKinsey’s specific intellectual property? It is a consultancy firm. It doesn’t hold software licences.
Mr. Laporte: Let me be more specific.
McKinsey provided research tools to all of its clients, whether private or governmental, based on data it gathered on companies and governments all over the world.
For example, a health minister is looking to create a new program and compare it to its counterparts. Clients fill out questionnaires and give information. McKinsey provides benchmarking services.
That was McKinsey’s proprietary methodology, but there were other professional service companies involved.
Ms. Bolduc: As Mr. Laporte explained, the data was gathered by these companies over years.
I could help answer the question about the costs of bids from companies. There is a unit in the department that verifies that the price we get is comparable to a market price. That could be for a sole-source contract, overages in a sole-source contract or when we get a single-source tender, for example, from a private company. There are people who make sure that the costs submitted to the government are competitive and meet market standards.
[English]
Senator Smith: I have a question for which I will give an introduction.
The Procurement Ombud review of PSPC in 2023 raised many concerns, including issues with unclear or incomplete mandatory criteria and solicitation documents. For example, there were cases where unclear language was used which led to reduced competition.
Can you talk about the steps that PSPC is undertaking to ensure that evaluation criteria are clearly defined and consistent procurement practices are also transparent?
Mr. Laporte: That is a very good question.
We also agree with the concerns raised by the Office of the Procurement Ombud.
In terms of the responsibilities of PSPC, the client usually defines their technical requirements. Our goal, and this is one of the lessons we have learned throughout the audit of the Procurement Ombud and the Office of the Auditor General, is the need for PSPC to do a better job when it comes to challenging the client.
Often, the client has no requirements and is facing a tight deadline. Basically, from now on, we have been more in the role of saying to the client, “You are looking for that particular requirement.” We ask them, for example, “Is there a way to structure your procurement or technical specification so it is more generic?” This is one of the things we are doubling down on, and we are providing additional training to our staff. Even this week, we had training taking place to ensure that staff will perform this challenge function.
In terms of the evaluation criteria, we want to ensure that when it comes to professional services, we are not only looking at the resources and who it is going to be assigned to a specific contract. We are going to be spending much more time and energy looking at corporate structure of the bidder and their past experience, as opposed to relying perhaps too heavily on the specific CV of one resource, which was one of the findings of the Office of the Procurement Ombud in some of his audit. This is something we are improving.
Also, we must ensure that when a task authorization is issued, there are clear task intervals on that. From an accountability standpoint, it is very clear what we need to deliver on.
Senator Smith: If I understand correctly, what you are saying is you are spending some time reinforcing with your employees the importance of asking proper questions of people making bids, so that the bid information between yourselves and potential supporters or people who want those contracts will be clearer. Is that correct?
Mr. Laporte: With respect to the procurement strategy, we would make sure, for example, that if a client were to have too restrictive a requirement, we would perform that challenge function. Also, say that a client of ours wishes to go sole source and non-competitive; there is an obligation to ensure the client is challenged on that.
Also, one of the findings as well was some documentation was missing. We want to insist on ensuring the procurement strategy is fully on file. I spoke in my opening statement about the need to basically double down on quality assurance as well. This is something we are doing: not only challenging but ensuring that, in terms of evaluation criteria, why we chose one method over another is properly documented.
Senator Smith: The Office of the Procurement Ombud review of PSPC in 2023 raised concerns about delays in bid evaluations, as well as missing information related to awarded contracts. This was especially true in high-risk procurement areas, such as defence equipment and infrastructure with high dollar value.
Can you talk about how PSPC is working to address these delays to ensure timely but also complete disclosure of results for high-risk, high-value contracts? What steps are being taken to mitigate this risk? Are there accountability mechanisms in place for failing to address this issue?
Mr. Laporte: May I ask you to repeat the first part of the question?
Senator Smith: The auditor’s report suggested there were delays in terms of ensuring timely and complete disclosure of results for high-risk or high-value contracts; in other words, it goes back to the question I suggested before, which regards the relationship between your group and third-party contractors. There seemed to be a void. Something was missing that caused confusion.
If contracts were awarded and not all of the information was given to you at PSPC, then there could be some leakage and problems in terms of perception as to the fairness of what happened.
I am trying to get to the whole relationship, and the clarity of that relationship, between yourselves and third parties; if third parties get these contracts and there’s a sense there is a gap in the questions and information, then you will see people say that was a biased deal and it was not fair. Then you can get yourselves into potential trouble.
Mr. Laporte: Yes. I will let Ms. Bolduc answer this question. We have been working with the Treasury Board of Canada, or TBS, in terms of greater awareness for our clients, and also all of the business owners who are also procuring part of the procurement process in terms of defining the budget, their requirement and ensuring, for example, if they have a specific need — as I was mentioning before — that it is basically addressed, ensuring it cannot be done internally with internal resources. This is the first step, and TBS has issued new guidance on that.
We also have an oversight committee for those high-risk, high-value procurements. Within PSPC, within our group, those procurements will be subject to a risk-based assessment, reviewed by a committee of DGs who will play a challenge function but also look at the process, ensuring areas of weakness are covered and that we do go back to the client. This is happening in our department.
I am going to ask Ms. Bolduc to answer.
Ms. Bolduc: I am simply going to build on Mr. Laporte’s answer.
The largest procurements for the largest projects are actually often delivered by PSPC. Within our own department, we have clients who deliver those particular projects.
As Mr. Laporte said, there are several levels of governance, including new levels of oversight that were established for all the contracts within the departments, including the large infrastructure contracts.
To build on what was said, to support clients, other government departments as well as our own internal clients, we have also issued a number of templates that help our clients define their requirements and prepare their bids, which was one of the issues found by the Auditor General and the Procurement Ombud. Thank you.
Senator Ross: Thank you to our witnesses for being here this evening.
I was looking to the annual report of the Procurement Ombud. It talked about the complexity and challenge for businesses or organizations to bid in the procurement process.
What are you doing to simplify things or make it easier for companies that perhaps have not had those opportunities in the past to participate in the procurement process?
Mr. Laporte: In terms of the complexity of procurement, this is very clear to me. It is not easy to navigate, especially when we get into task-based informatics professional services, or TBIPS, and specialized procurement. These are not necessarily easy instruments.
We need to do a better job in terms of streamlining the procurement process.
What we have is Procurement Assistance Canada. This is a dedicated team that reports to me, and their role is to demystify procurement, talk to small- and medium-sized enterprises, or SMEs, go to their communities and attend business fairs. We’re also doing a lot of work with Indigenous businesses to encourage young entrepreneurs to join us and provide the coaching they need in terms of becoming a supplier — not necessarily to bid but how to become a supplier of the Government of Canada and how to increase your chance of winning bids. All those things are key, and there are a number of sessions taking place across Canada, from coast to coast to coast. I think there are usually 200 to 300 per year, so a lot of support is provided to SMEs on that front.
Senator Ross: Would you give me a sense of how many first‑time suppliers would enter into the system in a given time frame?
Mr. Laporte: That is a very good question. I don’t have the data in terms of the numbers of first-time suppliers. When we think about PSPC, we procure $27 billion of various goods and services, so many new businesses are joining every year. The Government of Canada is also a sophisticated purchaser. We want to work with small businesses and accompany them on their journey. They may start with smaller contracts. We have many small supplies contracts where maybe a new business would be a better fit. Then, as they grow and acquire more maturity in terms of contracting and bidding, then they can become a supplier under another stream — for example, the procurement vehicle.
Senator Ross: Do you do most of the procurement centrally, or is it done in the various regions around the country?
Mr. Laporte: We have more than 1,000 employees working on procurement, and they are in various regions. Some of the procurement — for example, when we’re talking about real property, marine procurement — tends to be done in the region, where we’re closer to the client. For example, in the Pacific, we will have a ton of projects where there is an original footprint associated with that procurement. In Ottawa, we tend to do procurements that are more national in terms of scope.
Senator Ross: In your departmental plan, it says that the Atlantic region is working on piloting a procurement initiative to support emerging and established Indigenous artists in Atlantic Canada. Can you give me a bit more detail on how that program is going and how much procurement is actually taking place?
Mr. Laporte: I’m afraid on that specific program, I’m sorry, I don’t have the information. I know that we are working with Indigenous businesses. This is key, and we want 5% of the total value of contracts provided to go to Indigenous suppliers.
I can maybe turn to Ms. Bolduc if there is anything she wants to add or if she knows this program.
Ms. Bolduc: I don’t actually know this particular program. Perhaps I may add to what Mr. Laporte has already shared in terms of making it a bit easier on suppliers to bid.
On professional services specifically, the opportunity to submit a bid on the methods of supply that are offered by PSPC — there are seven of them — is quarterly. Essentially, we receive bids all the time, and we publish new winners that are on our methods of supply on a quarterly basis.
Very recently, the department, in order to encourage suppliers when they do well with the Government of Canada, has launched a new vendor performance management system.
Senator Ross: What does that look like?
Ms. Bolduc: Essentially, good performers have an opportunity during the next evaluation round to be awarded a few points for doing better.
Senator Pate: My question is in line with what Senator Ross just asked. I’m curious as to what kind of proactive processes or new measures you have in place to ensure that Canada’s commitments on key issues, such as reconciliation, human rights and promoting sustainability, via the Sustainable Development Goals, the TRC and the MMIWG Calls to Action and Calls for Justice respectively, are realized — and in a way that doesn’t result in perceived conflicts of interest.
Mr. Laporte: I’m proud to say that this year, for the first time, we published our report under the Fighting Against Forced Labour and Child Labour in Supply Chains Act. The first report on forced labour addresses ensuring no goods or services that come from forced labour make their way up the chain of what the government is buying. That was issued this year.
We want to promote awareness in terms of the department and also in looking at the specific goods — for example, textiles — that could be more subject to forced labour. We are taking some major steps on that front.
In terms of greening procurement, when I started doing procurement, it was fairly straightforward. You used to look at two or three trade agreements, whether or not you were in compliance and the regulations. Procurement has become a social and policy tool that allows us to get a lot of things done. In terms of greening, for example, you can think of a construction project we’re going to be greening by buying greening cement, so those are mandatory requirements that will make their way into our tender documents.
In terms of Indigenous reconciliation, I was talking about the 5% commitment. So the overall value we have in terms of contracts, we want 5% of the total goes to Indigenous businesses. There is more to do on that front in order to achieve this 5%, but I would say, for example, making sure that the procurement has a participation plan, meaning that if the Government of Canada is spending money for a territory, we want to make sure that jobs are being created within that community. Those are a few examples that we’re doing.
Also, there is a lot of engagement with suppliers’ diversity and how we bring, for example, minority- or woman-owned businesses to bid on government contracts. Progress has been made on that front.
[Translation]
Senator Loffreda: Welcome to the Standing Senate Committee on National Finance. One of the priorities is cost control, as I think you’ll agree. How does your department manage cost overruns in major procurement projects? Are new protection measures implemented? What measures are taken to improve efficiency, transparency and equity in the federal procurement process, in particular in the areas deemed problematic in the Auditor General’s report? I’m not trying to imply anything. What measures have you put in place?
Mr. Laporte: Thank you for the question. One way of controlling costs that we’ve seen a lot of over the past few years and that was raised by the government procurement ombud is the way the Government of Canada can obtain professional services. Contractors will be hired to provide services related to what’s called the task-based approach. The aim is to steer our clients towards a solution and ensure that the service provider takes a certain amount of risk and doesn’t just provide resources paid by the hour or the day to the Government of Canada. Targeting a solution rather than adding staff makes a difference and cuts costs.
When it comes to the various projects, cost control is important. At PSPC, when we look at our projects, we look at the contracting process. Clients are responsible for their costs. Anything that can be done to reduce costs are measures to be implemented. Ms. Bolduc was talking about a supplier performance management system that will also enable us to take into account a supplier’s ability to deliver what it has to deliver on time and within budget.
So, eventually, each supplier will have its report card. We’ll start with professional services, and we launched the exercise this week. For many of our new contracts, the supplier will get a score based on different components, such as its historical ability to deliver projects on time, but also its ability to meet the initial budget.
When we get to that supplier, we will then issue a second call for tenders, with an evaluation that will take these parameters and its performance history into account. My aim is to start incorporating this exercise into our infrastructure projects as early as January. This is a procedural change, and a lot of communication needs to take place with our professional service providers and real estate providers. It’s a step in the right direction towards reducing and controlling costs, and ensuring that the supplier benefits from reducing the costs it charges the government.
Ms. Bolduc: We heard from the Auditor General and the Procurement Ombud that it’s necessary to clearly define the scope of what’s being bought from the outset. This is true for major infrastructure projects, but also for all types of projects, including IT projects. When expectations and scope are well defined from the outset, it’s easier to assess the quality of projects when they’re delivered, to determine value for money and to know whether the best possible value has been obtained for Canadians. It was clear from the auditors that the scope of each contract must be well defined when a call for tenders is issued.
Senator Loffreda: Excellent. Thank you.
The Chair: My question is along those lines, Ms. Bolduc. When we were talking about scoring on time, schedule and budget, there’s also quality control that should be part of the points system; that goes without saying. It’s not enough to stay on budget and on schedule; if you’ve delivered something that’s completely deficient or suboptimal, you have to score accordingly.
Mr. Laporte: Thank you for the question. Of course, this will be part of our follow-up on supplier performance. I mentioned budget and delivering the projects on time, but there’s also the quality of services received, client satisfaction, and meeting the contract requirements. I take it for granted that basic contract requirements and contractual provisions are met.
Many changes have been made since November 2023 to ensure greater transparency about the costs we are billed. With subcontractors, we have to make sure we have access to the resources we need to know who will be working on a contract. We ask for this information, as well as information on profit margins. This gives a better idea of what is being paid to subcontractors and adds a great deal of transparency. This transparency will also enable us to better control costs and see with the client where savings can be made.
[English]
Senator MacAdam: Thank you for being here. When the Auditor General appeared before this committee, she said:
The takeaway from these reports is that when good governance is lacking, the remedy isn’t necessarily new processes or more people or money; it’s about applying the rules that exist and having the right people with the right expertise for the job.
You’ve indicated some steps you’ve taken to improve your processes and your compliance to ensure the rules are applied effectively, but I’d like you to expand on a few of those things.
You mentioned a new office being set up. Was this something established in response to these most recent reports on procurement? You mentioned more rigorous terms and conditions. Are those for departments and agencies in terms of more rigour in their part of the procurement process?
You mentioned an oversight committee. You’ve mentioned expanding quality assurance processes. I’m just wondering, first of all, if you could expand a bit on this new office and any of the things that I brought up. Are there other things too? Some of those things seem pretty basic to me. I’m surprised that these terms and conditions and strengthening controls are new.
Mr. Laporte: Thank you for the question. I will ask Ms. Bolduc to perhaps add more.
We took many steps. I will say that I fully concur with the Auditor General when she mentioned that there are a lot of rules. Adding more rules on top of the existing rules is not always the solution.
We also need to be mindful that procurement is decentralized across the Government of Canada. As a common service provider, PSPC plays a role and has its clients, but a lot of departments will procure under their own authority. They may have their own sets of rules and ways of doing things. What I’m really focusing on is how we work with our clients and what measures PSPC is taking.
First, there was basically a key conclusion that came from the Auditor General, as well as the Procurement Ombud, about the lack of documentary evidence to support key decisions. I have to fully agree: This is basic. We should have complete record-keeping.
So, in April, we created a new role in the organization, Chief, Contract Quality and Records Compliance Office. We want to make sure that checks are happening and also that directors are accountable, look at themselves, file work with their teams and do some verification. So far, more than 500 quality assurance reviews have been done.
We’re not only talking about whether all the information is there, but also whether the proper procurement strategy was followed. Also, new checklists have been put in place, ensuring that we work with the client.
To give you a basic example, when we receive CVs, we make sure the resource can attest and provide evidence to back up references and expertise. Those are new requirements that were not necessarily always followed. We want to make sure that rigorous processes and checklists are in place so that files are complete on that front.
In terms of rigour, Ms. Bolduc was talking about task authorization. What we saw with ArriveCAN were oftentimes very vague and broad task descriptions. It was very difficult to track down to which project they were related. For us, this means working with the client, but since November 2023, we are making sure that clients abide by these rules and a check is being performed.
We are very pleased to have also created a new sector to make sure there is uniformity and consistency when we work with and procure professional services. I will turn to Ms. Bolduc to provide a bit more context on that.
Ms. Bolduc: Thank you, Dominic. I think you mentioned more rules. In fact, the Auditor General said the same thing: This is not necessarily the solution. What Dominic just described is not more rules but more focus on those areas where we need more attention.
You asked about governance. There was previously governance that surrounded major projects as well as major procurements. There is heightened concentration — essentially more eyes at the senior level that oversee the larger files with more material, if you will.
Again, it is helping people as opposed to adding layers by following checklists, for example — for procurement officers to be able to go through the checklist and say they’ve done everything they were supposed to. The rules haven’t changed; it’s just that now they can check that they have done it all.
Senator MacAdam: So there’s more due diligence in the process. You mentioned the oversight committee for larger contracts. Is that new as well?
Mr. Laporte: No, this is a committee that has been in place for many years. It’s playing that challenge function. Also, procurement officers have delegated authority. Usually, they operate within their delegated authority. They are also subject to additional control and mechanisms. What we wanted to do was ensure that for those large projects, there is an opportunity to, say, challenge a procurement strategy that is being used. Especially when you’re dealing with major infrastructure, there are many ways to perform a procurement, to deliver on a major construction project. This is also an opportunity.
For things are going to be more risky — for example, say that a client wants a non-competitive process, and sometimes there are valid reasons that are provided for under the regulation to have a non-competitive process — we have the framework also so that decisions can be challenged and properly documented.
Senator MacAdam: I want to ask about the relationship between the departments and Procurement Canada. The contract requests get initiated from the departments and Crown corporations. You talked about more clarity around expectations. I am thinking if they are not clear in the full scope of the project and not clearly laying out their expectations, it’s not as easy for your folks to ensure things are properly managed.
That is the challenge function that Procurement Canada has to strengthen, right? You have to challenge the departments when they want these contracts so that the scope is clearly laid out from the beginning to the end and there is no vagueness in terms of what they need. Is that something that has to be strengthened too?
Mr. Laporte: That is a fair statement. I would say we are doing that. We are challenging the client departments much more.
Also, when you look at the procurement life cycle, it is basically going back to a core management role in terms of making sure that there is proper planning. You do not want to leave procurement at the tail end of the process and then realize, “I need to post for 40 days or my request for proposal, or RFP, is going to take a few months.” What we need to do is to work with business owners.
TBS has launched new guidance, especially when it comes to professional services. Do we need to procure professional services? Do we have in-house resources? There are things we need to ensure. Neither business owners nor a single department across the Government of Canada are well equipped to do that proactive thinking to make sure that we also have enough time to do a proper procurement strategy.
[Translation]
The Chair: Thank you. I have a question. We saw in the media recently — I think it was last week — that there were three other overbilling cases that were sent to the RCMP. Can we have details on the departments involved and the extent of it?
Mr. Laporte: Thank you for the question. Unfortunately, I won’t be able to give you more details, because there’s a specific sector, given the sensitivity of these investigations, that handles these files. As you mentioned, this has also been referred to the RCMP, but I’d be happy to follow up with the committee on the number of files that have been forwarded to date.
The Chair: There was talk of three in the media. Are there more?
Mr. Laporte: It’s an evolving situation, and I’m not the one involved in managing it all. I know there may be others. From what I’ve been told, it’s possible that other files will emerge as we work on investigations, but it would be difficult for me to give you the specific number of files.
The Chair: So would it be possible to send us the number of files, the departments involved and the amounts involved in writing? We’ve also seen in media reports that you’re working to recover the amounts that were overcharged.
Mr. Laporte: Yes, of course. We’ll be happy to pass this information on to you.
The Chair: Perfect. Obviously, we’re referring to articles in the media, but in your answer, you seem to be saying that this is an evolving situation. There seem to be others. Obviously, if there are others, we want to know how many files are referred, with an update at the time of the note.
Mr. Laporte: Great.
The Chair: Does this type of file follow on from the Auditor General’s report, or have your department and other departments started to look at all the files and identify other cases? Or is this something that happened unexpectedly?
Mr. Laporte: No, it’s something that was already being done. It’s information gathering, data cross-referencing, which had been going on for several years. It didn’t follow on from the Auditor General’s report. One of my colleagues, an assistant deputy minister, is working on these investigations. I would say that it’s a long-term undertaking — compiling information, cross-referencing data, getting information from other departments. It’s an effort that began several years ago, but it didn’t follow on from the Auditor General’s findings.
The Chair: Why is it that they’re coming up with cases now, and there weren’t any before?
Mr. Laporte: I wouldn’t be able to comment, because it’s not my file. I’m not trying to avoid questions at all, but I’m not the one responsible for investigations. It’s really Catherine Poulin who’s in charge of these investigations and who works with the investigative staff. I couldn’t say that this hasn’t happened in the past either. This time, the cases have received more media coverage, but since these are very sensitive cases, files that aren’t necessarily public, I’m not in a position to provide you with the information. This isn’t information that has been shared with me in the past.
The Chair: Can you tell us how many departmental overbilling cases have been referred to the RCMP in the last five years?
Mr. Laporte: Yes, I’d be happy to follow up with the committee.
The Chair: Thank you.
Senator Forest: If I understand correctly, in terms of the tendering protocol, the guidelines are set by Treasury Board. I will give the example of a municipality in Quebec. In the case of a municipality, when it issues a call for tenders, there’s a two‑envelope system for professional services where an evaluation is made of the offer in response to a specification. If the person or organization comes out on top, there’s a second envelope, which is the price. You don’t have a tendering protocol like that, do you? Is each department free to operate according to its own rules?
Mr. Laporte: I would say that, perhaps with the exception of Crown corporations, which often have their own rules and aren’t subject to the same regulations, for all federal departments, the government contracting regulations provide rules for non‑competitive contracting in terms of the prevailing values and exceptions. We can add to that all the trade agreements that have been signed by Canada and that also incorporate various rules by which our trading partners will have the opportunity to participate in the government procurement contract. I would say that yes, there are regulations; we are subject to them. There are also Treasury Board Secretariat policies on government procurement.
Senator Forest: Thank you. On major policies, I’m thinking in particular of the marine procurement policy, where there are billions of dollars at stake and where, on the one hand, there were two suppliers — we were finally able to add another supplier — and where, on the other, there are cost overruns and failure to meet deadlines. It would even appear that there is even subcontracting outside Canada. Does PSPC have any authority to oversee this type of contract, where huge sums are at stake?
Mr. Laporte: Marine procurement contracts don’t fall under my jurisdiction. My colleague Simon Page is the assistant deputy minister responsible for defence and those contracts, so I couldn’t answer the committee on that, but I’d be happy to follow up.
Senator Forest: Because, looking at these contracts, it seems to me that the boat is taking on water.
[English]
Senator Ross: One of the things I read was that the Auditor General found that there was a lot of variation in procurement processes in terms of conflict of interest, that there was a lot of room for improvement and that some of the Crown corporations had no provisions for conflict of interest. I wonder what you have put in place or are doing to improve procedures in that regard.
Mr. Laporte: Thank you for the question. In terms of the Crown corporations, I am not accountable for the rule regarding their conflicts of interest. However, what was noted in the Auditor General’s report was that there was no symmetry, and that was well noted.
What we have done and want to ensure at PSPC is that, when you start as an employee and if you work in procurement, you are bound — as are all employees — by the Values and Ethics Code. This is fundamental. There is a renewed dialogue happening surrounding values and ethics across government, which is welcome. So, first, we require all employees to adhere to the Values and Ethics Code.
Second, we wanted to ensure there was no apparent real situation of conflicts of interest. We asked all 20,000 employees of the department to fill out a specific, one-time questionnaire to ensure that there was no situation of dual employment that could give rise to not necessarily to a real situation of conflict of interest but an apprehension of conflict of interest. This step has been taken.
I know that Ms. Bolduc is taking additional steps. Perhaps I can ask her to add to my response.
Ms. Bolduc: Yes. Contractors are now required to adhere to clauses that require them to adhere to a code of conduct for all contracts established by PSPC in response also to the audit.
Senator Ross: Would those be updated each time they were engaged in some type of procurement, and would it be the same for the employees? Would there be any additional information if there is a material change in their situation?
Mr. Laporte: They are required, under their declaration, to inform us of any material change.
However, when we are dealing with a procurement officer, for example, if you are working on several hundred contracts every week, what we want to do is see if there is a way to automate that to make it a part of the process.
We also have a strict measure where if you are a part of an evaluation panel, you have to attest that, of course, you have no conflict of interest, do not know the company and have no relevant personal relationships. Additional training is taking place.
Ms. Bolduc mentioned the Code of Conduct for Procurement. This is something also where there is greater awareness for our suppliers. We sent a reminder to all our suppliers back in spring to let them know there are true consequences regarding that. If you do not respect or adhere to that, you can be disbarred from the opportunity to bid on government opportunities.
[Translation]
Senator Loffreda: How is PSPC strengthening cybersecurity measures for computer systems, particularly in light of the Auditor General’s observations on vulnerabilities?
Mr. Laporte: I would be able to tell you that our system, which is called the electronic procurement solution, or EPS, is our tendering management platform, which allows bidders to post all the tenders that are there. In the past, for transparency purposes, there were a lot of communications coming in in different formats; it could be emails, paper correspondence, documents or faxes. All of this has been consolidated into a single platform to ensure that a file is complete. That helps us. From a cybersecurity perspective, unfortunately, that’s not my area of expertise for the EPS system, so I wouldn’t want to venture to comment on that, but I do know that security standards are being met.
The Chair: Thank you. We look forward to hearing more about your commitments by Wednesday, December 4. It’s my birthday, so go ahead with as much information as possible. That will be my gift. Please be generous with the information. Thank you.
[English]
For the second part of our meeting, we will resume our study of the practice of including non-financial matters in bills implementing provisions of budgets and economic statements.
We welcome Louise Pratt, Senator for Western Australia and Chair of the Finance and Public Administration Committee (Legislation). We are very lucky to have you here, live. Thank you for being here. I do not know what time it is in Australia, but it is another day and a long trip as well. Thank you.
The floor is yours if you wish to make an introductory remark, and we will ask you questions afterward.
Louise Pratt, Senator for Western Australia and Chair of the Finance and Public Administration Committee (Legislation), as an individual: Thank you, chair, if I may call you that. What is the appropriate courtesy to the chair of your committee?
The Chair: Chair.
Ms. Pratt: Chair, thank you.
I’m delighted to join you in person to give evidence before the Standing Senate Committee on National Finance. I have not been to Canada for some 15 years. It is quite fortuitous that, completely coincidentally, the evening that I was going to be rescheduled to give evidence online happened to be an evening when I was literally transiting through Ottawa, and I get to do a brief visit here before heading on to the NATO Parliamentary Assembly. I am delighted to be here. I thank you very much.
From my own experience, I have heard thousands of hours of Senate evidence before committees and, before that, in my own state legislature of Western Australia. However, I have never given evidence to a parliamentary committee before. This is, indeed, a great privilege, especially as it gives me an opportunity to reflect on the role, of course, of my own committee.
As you have reflected already in your deliberations, which I have looked over, we are both Westminster systems, and you are having a discussion tonight about potential ways in which you can amend your own procedures, standing orders and culture in order to deal with omnibus bills but also in a general sense around how you consider the budget.
One of your senators highlighted that some of what you are looking to do might be rules-based and some behaviour-based. Of course, the Australian Senate has evolved in the same way, looking at our own rules and our own culture, if you like, and behaviour. Indeed, when one of your senators said that you bet it is a combination of the two, a change in rules and a change in behaviour, I certainly concur with that.
I will take you through how some of the rules and resolutions of our Senate affect our behaviour. In effect, we set the standards and guidance for our behaviour in the rules and resolutions of the Senate.
Our Senate changed its rules, behaviour and culture around Senate estimates quite dramatically around 1997, but in any case, it is here in the definitive guide to the Australian Senate, Odgers’, and I will gift that to you, chair, as a birthday present.
Before that, Senate estimates was one committee, not unlike this, and one chamber and had a debate in the chamber as well. I believe that you have most of your debate in here and not so much in the chamber.
That is similar to what we now do in the Australian Senate. We have budget speeches, but the deliberation on the budget happens in all of our legislative standing committees. I know that you have some consideration that goes off to different committees, but I am not really sure how intensive that is or how deliberate in terms of timing and sequence.
For example, when our budget bills and portfolio statements are introduced into the lower house, they are that same day tabled in the Senate and referred to eight separate standing committees, portfolio by portfolio. I think these are roughly equivalent to your own.
To some extent, what the Senate did in 1997 in changing its rules really took the power away from the finance committee as being the arbiter of how the budget is looked at and empowered, portfolio by portfolio, all of the Senate’s committees.
We now meet for four weeks a year doing Senate estimates, for two weeks a week after the budget, a week at the end of the year and a week at the beginning. Of course, our budget is brought down in May for a financial year that starts on July 1.
The nature of our deliberation is within about the same time envelope as your own. It has all the same pressures of government wanting to get its budget through the Senate.
I have to say, I think the art and strength of our Senate estimates do not come from a senator being able to ask any particular question or a particular day of hearings. It really is from layering up over time the culture of having those four weeks a year, which means four weeks for every committee sitting in budget deliberation. It is, of course, not just budget deliberation that we do in our Senate estimates committees. We use the budget bills and the fact that we are required as a Senate to inquire into them as a mandate to ask government about all of its operations and programs.
In fact, as chair, I read out a few words that go something along the lines of:
There’s nothing in the rules of the Senate that precludes any senator from asking any question of the bureaucrats who appear before us in Senate estimates, so long as it is with respect to the programs of the agency being funded.
Let me pull out some of the topics that I have done over the years. For example, for many years, I quizzed in the communications committee during our Senate estimates about the rollout of our national broadband network. Over many months, I built up a theme of expertise in that area. Then, in other years, I have done work on social security, looking at the defaulting and fining of people who have lost their social security in particular demographics that have been affected by that. The reason we are able to do it in that particular way with such diverse coverage of topics is not only because everything is split off to all committees, but also because all senators can participate in all committees.
When we have our four weeks, you will find opposition and crossbench senators will run between committees. They are waiting for when the next program that they are interested in will be called. Meanwhile, a government senator and a chair such as myself will occupy the benches and keep the numbers in the room, if you like, for the government while the questions are asked.
I have had various turns at being in opposition. For example, when I asked those series of National Broadband Network, or NBN, or social security questions, they were during periods in opposition.
Now we are in government. We tend to leave the floor much more open to allow for that time of scrutiny.
I’m very aware that you have a different appointment structure for the Senate here, but I think some of the principles that we’re talking about would easily be applicable once you really look at what your own rules empower you to do as a committee, but also in your various other committees.
We have certain limitations in our constitution which mean we can’t be sent omnibus bills with anything attached. Things have to match the title, but these are constitutional limitations that help us with some of the problems that you have, so we don’t have the same problem in quite the same way with regard to omnibus bills.
The main momentum behind how we scrutinize budgets really has nothing to do with the fact that the government is not allowed to impose those kinds of vehicles on us. It’s much more to do with our overall culture and practice as a Senate in how we deal with our committees.
Thank you.
[Translation]
Senator Forest: We’re honoured to have you here today. Following the adoption of Standing Order 111, do these changes mean that you now have enough time to study all financial bills?
[English]
Ms. Pratt: That’s a very good question. The answer is, of course, no, particularly because many senators find it is their priority, in the substantial amount of time we put aside, frankly, to sometimes discuss other matters and not the bills themselves. I think that is something of the nature of our political party partisan system where there’s a certain amount of point scoring going on between senators to serve or oppose the government’s agenda. But I would consider the fact of putting aside comprehensive time like that or, indeed, looking at the standing orders of our breadth of matters that any committee can consider, and mandating yourself as a Senate would have a different effect, if you like, than it does in Australia, because as I said, we have different motivations when we show up.
But, of course, when there are key and major issues in the budget, they will be very well ventilated if people have read their budget papers in the couple of weeks before the announcement of the budget and the two weeks that pass when we discuss it in detail in our committees.
[Translation]
Senator Forest: One of the problems we can anticipate — and this is the case with a situation we’re currently experiencing in Canada — is having a minority government with the work of the House at a standstill for some time. How can this happen in a minority government context, when there are delaying tactics, and the government and the House are unable to meet their deadlines?
[English]
Ms. Pratt: That could cause a constitutional crisis, as it has in the past when the budget supply bills were not passed in a timely way. In effect, that would then get referred up the tree to the Governor General, et cetera, for intervention, but that hasn’t happened in a very long time.
In that context, it still becomes a political question of how you best jostle things along, as painful as it is, and as painful as it clearly might be for Canada as well to cope in those situations.
I was part of a minority government under Prime Minister Gillard, and the way of navigating that was really to do the work in both the Senate and the lower house to progress our program despite the fact that the government did not have the numbers in either chamber. The dynamics of that could be very diverse.
There are no great solutions for you there, other than it is the culture of how you go about delivering the votes for any piece of legislation and the leadership and dedication that goes to that, and, I dare say, seeking not to complain about it too much but to get on with it and try to do it.
Senator Smith: Thank you very much, Senator Pratt, for being here. I want to go back and get your feedback.
Standing order 111 was adopted in 1997, as you stated. Looking at it over time, how effective has that standing order been in preventing the government from pushing through omnibus bills without sufficient scrutiny? Could you give us a chronological overview of that? Has it succeeded in curbing the practice? Could you give us some background?
Ms. Pratt: We have quite strong constitutional powers and also our own standing order to prevent omnibus bills. In large part it has succeeded, because we will get some bills that are tidying up bills, but they generally have to remain within their portfolio area and within the act that they’re amending — unless, of course, they’re an act to combine acts. So we simply don’t have them. We are constitutionally empowered for that, but we also have the standing order that you referred to that facilitates that.
Whilst we have that extra constitutional backup, I think there is nothing wrong with you creating a standing order of your own specifying how the Senate will treat such bills and proceeding down that path.
I looked at some of the evidence you’d had from another senator who said that there was no real reason to preclude you from writing your own rules about how you choose to do that and how you choose to consider legislation. Of course, how the House of Commons responds to that is both a political question and a legal one should the courts want to consider it.
In Australia when these issues have come up in our courts, the courts have, frankly, deemed them to be a matter between the two houses. In effect, that has also meant that the House of Representatives cannot overrule the Senate and how we choose to conduct our own business.
Does that make sense?
Senator Smith: Yes, it does. It’s interesting you meant someone within our sphere here. One of our previous witnesses served as both Clerk of the Senate as well as the House of Commons, and you mentioned that in passing. He emphasized there was no explicit prohibition in the Rules of the Senate with respect to splitting large pieces of legislation.
He did, however, stress the importance of seeking concurrence with the House of Commons for several reasons, including constitutional principles.
Could you speak on whether the practice of splitting large bills is common in the Australian Senate, particularly those that include both financial and non-financial items? Are there rules that prohibit it?
Ms. Pratt: We don’t prohibit it, but often it’s that political pressure that’s still there — if you like — to get something passed. We will take our time on those issues, but if a particular party does not like particular provisions of a bill or a budget bill, then the non-financial provisions will be pushed out of the bill because we have the power to do that.
Senator Smith: Our challenge is that there are pieces that are non-financial that are trying to be pushed through, and that’s one of the topics that we’re trying to deal with: How do we manage that, and how do we change attitudes and cultures?
Ms. Pratt: You have a few options. One is to insist that it doesn’t happen, but the other is to provide a more robust process for when it does.
For example, in the same way we have our large estimates process, I looked at, for example, how you have to split the bills up and put a motion to the Senate, to then refer them to all the various committees. To my mind, I can’t see any problem with having one of your own standing orders that would automatically deem that any omnibus bill be referred to all the committees. One week after the budget, all the public servants attached to implementing those measures would appear before Senate committees to discuss those provisions, and you can intensify the deliberation around that quite dramatically before you then report back.
We would normally — when it comes to non-budget measures in a bill — always wait for a Senate committee report before we finish voting on a bill, whereas I note you’ve had some issues with that.
In the main, our estimates deliberations and estimates reports happen before the budget is passed through the Senate. However, our estimates reports are not particularly important. The importance is the public scrutiny and the visibility of those discussions and the questioning of public servants at the time.
I’m sorry, I don’t have an easy fix for you in that regard, other than to say to elevate the level of scrutiny. If you’ve got no power to fix it in the way you want, then you have to use the tools that you have, which would be to elevate the level of scrutiny around those issues and put it in your Standing Orders as to how you’re going to immediately treat those matters.
Senator Smith: I’m not sure if there is a magic wand.
Ms. Pratt: There certainly isn’t.
Senator Smith: Thank you.
[Translation]
Senator Dalphond: Welcome to the Senate.
[English]
I look at your constitution, and it says that the powers of the Senate are limited to financial matters. Section 53 says that the Senate may not amend proposed laws imposing taxation or proposed laws appropriating revenue or monies for the ordinary annual service of the government. You spend four weeks every year to look at these things carefully, but you cannot amend them. I see that you can send a message or suggestions to the other place that they will have to consider. Could you explain that process a bit?
Ms. Pratt: Yes, that’s right. We could, for example, create a constitutional crisis and not pass the budget at all, or we can send a message. It is a game of chicken, if you like, in sending that message, saying that we would like the House to consider amending the budget in this particular way.
I would emphasize the fact that in our estimates processes, we found that even though they’re based on the budget, there is a great deal more to discuss once you give yourself the freedom to discuss all the government’s programs and activities. A particular stream of the budget may or may not be the highlight of what you want to weigh in on when you’re looking at different government programs.
By way of example, we have eight standing committees. During the budget period, each committee will meet for a week. We start at nine o’clock in the morning, and we will go until ten o’clock or eleven o’clock at night. We have one agency after the other, and it’s every portfolio agency that’s funded. Senators choose which ones will appear, and we have to collectively negotiate our time to say, “Okay, which agencies do we want to prioritize? Which ones do we not want to prioritize?” Any senator can call any agency, and as chair, I’m obliged to call them. The only power that I have as a government chair is to use our numbers to set the order of the agencies, but not which agencies appear. Every agency that is a legislated entity is mandated to appear if requested in those four days.
I cannot close off questioning and move on to the next agency unless all questions are finished, which means that if there is a big scandal, a big issue or a big matter in the budget, then you could technically sit there all day and debate just that one issue and not get on to any of the other agencies.
Senator Dalphond: How many messages have you sent over the last few years from the Senate to the lower house, saying, “We’re studying this, and we suggest you amend this.”
Ms. Pratt: Honestly, I can’t recall any. In part, that is because they are supply issues, and they will get sorted out by negotiation. The government, for example, could amend its own bills, et cetera, but I can’t recall a time when we’ve amended our own budget or when the opposition has had the power to amend the budget, unless, of course, they are budget measures that are implemented later on in other legislation, and it is just how the budget at the time reported those measures, but their implementation, as reported in the budget, was a separate matter and not tabled as part of the budget.
I suspect you get other things. You get measures packaged up and thrown into the budget itself when, perhaps, we have more luxury in relation to the separation of those matters.
Senator Dalphond: Section 55 of our tax bill limits the bill to be about taxation issues only. It’s even more precise. It has to be a specific type of taxation. So, you cannot have customs and duties and income tax. It has to be two separate bills.
Ms. Pratt: That’s correct. We do have substantial debates around whether those kinds of taxes are justified, et cetera.
Senator Dalphond: Here, again, you can only accept and cannot amend, but you can send messages.
Ms. Pratt: Yes, but it would be unusual, frankly. For example, when we change income tax measures, they can’t be changed in the budget because that is appropriations and spending. If it requires a legislative change to change tax thresholds, then that is separate legislation and must be debated separately.
So, we do have the power to amend income tax and those kinds of measures by sending messages, et cetera.
Senator MacAdam: Thank you very much for being here.
Ms. Pratt: Yes, it is a pleasure. I just have a bit of jet lag.
Senator MacAdam: I want to go back to the standing order from 1997. Could you speak to what prompted action on this issue? How did senators come together to find a path forward, and what kind of consultation was there with the House of Representatives to make this all work? I’m trying to get some information on how it transpired. In turn, we could learn from that here.
Ms. Pratt: It will be covered in Odgers’, but I can tell you it was out of very similar circumstances to here: a lack of consideration, scrutiny and time to consider the budget in its depth. But our Senate estimates have evolved into something else that is even broader than consideration of the budget because of the breadth of questions that we’re empowered to ask through our processes, for example, technical questions about the National Broadband Network, or NBN, or the number of breach notices in social security. We are empowered to ask questions about any area of government activity and how well it’s executed, and all accountability questions are in order.
We also have, attached to that, hundreds of questions on notice that will be generated through that period of time as well.
Senator MacAdam: Was there resistance from the House of Representatives at the time? I’m just trying to understand how you successfully got that standing order.
Ms. Pratt: It is my presumption, based on my reading of what the dynamics would have been at the time, that the government needed to be able to get things through the Senate, and it needed, if you like, to acquiesce to the Senate being able to change its own rules in that regard.
But we do, just like you, consider ourselves a very independent chamber, despite the fact that my bread and butter is buttered on the Labor Party side of how we do business in there.
Senator MacAdam: Thank you.
Ms. Pratt: I am not sure I particularly answered your question, but I have to say I arrived in the Senate in 2008, not 1997. I’m a little scratchy on what would have been the history there.
Senator Pate: Thank you again, senator, for joining us. I’m a couple days ahead of you on the jet lag, but I hear you.
Bill C-69, which was our Budget Implementation Act, has been used as an example of a recent budget bill that included non-financial measures, and these matters included harsher punishment for auto theft as well as immigration detention in federal prisons — which are prisons where people serve two years or more, unlike your federal prisons — both of which present the risk of disproportionately impacting marginalized groups in this country, particularly those of Indigenous and African descent. This potential impact was noted by the Senate committees that studied the bills through the committees, and they emphasized that the insertion of these measures in budget bills meant that committees could not fully study and scrutinize the measures.
Considering section 54 of the Australian Constitution, I’m curious whether it’s been your experience that excluding these peripheral matters prevents this kind of abuse in your legislative process and whether it safeguards the Senate’s ability to more fully assess and adequately analyze the impacts and effects of the bills when it’s considering them. If you could give any examples of that, that would be great.
Ms. Pratt: In short, my answer to that is yes. I think that as a Labor Party senator, I would consider some of the issues around that equally draconian. They would be scrutinized outside the budget process. The Senate may successfully amend laws like that depending on who has the balance of power with respect to those particular questions.
I would be asking yourselves whether you have the power to say that these are not supply issues and budget measures and that you see no obligation to consider them according to a budget timeline.
Senator Pate: Pardon me if I’m slow on the uptake here, but I’m presuming, then, that if you received a budget bill and either one of those kinds of provisions were in there, that is the process you would do. You would just send it back and say, “This being in the bill isn’t appropriate”?
Ms. Pratt: Yes.
Senator Pate: Can you walk us through how you do that? What would the process be?
Ms. Pratt: Well, it would be split off, but because we have the power to split it off, governments know not to do it. So it’s quite difficult for me to think of a particular example off the top of my head where that has happened, simply because it is not our custom and practice to have those kinds of measures included in a bill, other than in a stand-alone bill rather than a budget bill.
I guess the question for you is how, in your own procedures, you create a standing order like ours that outlines how you will consider such things when they appear in the budget and not to be afraid of really looking at the breadth of your potential powers, either those that you already have or those that you can give yourself to do that job properly.
I should also mention one of the things that we do in our estimates processes. As Chair of Finance and Public Administration, I chair cross-portfolio estimates for Indigenous affairs, where Health, Education and Attorney-General’s will all come together, and we will ask all of those agencies questions at the table about their performance on Indigenous affairs rather than siloing it between each committee. So that’s something else. You probably already have a committee that works in that way, considering things across different agencies, but we, of course, do that in the context of all of the budget bills as they pertain to First Nations people.
Senator Loffreda: Senator Pratt, it is an honour and privilege to have you here with us. Hopefully, you get rid of your jet lag quickly. When I travel, by the time I get rid of it, it’s time to go back home, so I hope you have a lot more success.
Ms. Pratt: My home constituency is like Vancouver to Ottawa. So you live with a bit of jet lag anyway.
Senator Loffreda: Welcome to our Finance Committee. Unlike the Canadian Senate, I understand that Australian senators are still affiliated with political parties, and as you might know, more than 80% of Canadian senators now sit as independent, including myself. As such, I don’t necessarily feel the pressure to advance the government’s agenda and have their omnibus bills quickly passed unless I’m sponsoring them; I sponsored the last two budget implementation bills, so I want to be authentic there. Nor do I have the obligation or desire to automatically oppose its policies as would opposition senators. You can see where I’m going.
Having said that, in your experience, how much does partisanship dictate the work of the committee you chair when dealing with appropriation bills? I imagine there are many competing interests when dealing with political parties. Personally, I feel that because of the partisan nature of the House of Commons, no governing party will want to get rid of omnibus bills, which may explain why the independent Canadian Senate is seized with this question and preoccupied by this exercise.
Again, I don’t feel any governing party would want to get rid of omnibus bills. Why would they? If we look at the Harper government, he had many omnibus bills. If we look at the current government, there are many omnibus bills. I have notes on the last one I sponsored. Just going through it is a task.
Ms. Pratt: If you are in a position of balance of power, for example, on these questions, then that is a question you have to ask yourself, as to what you are prepared to draw a line around.
In our Senate, we are highly partisan, but we also frown on cross-trading on issues — although individual parties will do that at times. We will have a crossbench party, “We’ll pass this bill if you give us more money for housing” and so on. Even though they don’t have the power to influence budget measures, that kind of trading can and does happen.
However, I think what you are talking about in terms of how partisan you are may not be the main question here. Yes, as a government senator, I still have to give the opposition and the crossbench what they want to a certain extent. That is because our standing orders have evolved in a way where our rules do not favour one side or the other, unlike with the lower house. This is where, I think, we have more in common as a Senate. For example, you have a lot of independents, but you also have long‑term careers that are not as embedded in party politics in your Senate.
To that end, there is more similarity than you might expect. For example, the government senators ask very few questions during the budget process on budget estimates. Part of our reason for doing that is to ensure that the budget is scrutinized, because purportedly we would have had a chance to influence it. The other part of that is that no one will ever get to go home unless we do that.
Senator Loffreda: It is the same here.
Ms. Pratt: Yes. So we are probably not that dissimilar.
Senator Loffreda: Thank you. I want to be more specific on standing order 111 from 1997, which imposes a deadline for receiving bills from the House. Specifically, standing order 111 provides that a bill received from the House of Representatives is deferred to the next period of sittings unless it was received by the Senate in the first two thirds of the current period.
I appreciate you were not a senator in 1997 when it was adopted, but you may have some anecdotal evidence about resistance when the order was adopted. If you don’t, that is fine. I would like to know what the feeling and vibe is around that. Change is always difficult. I imagine there might have been some resistance and a bit of growing pains, and 1997 was a long time ago, but in the 27 years since its adoption, has the standing order been respected and the legislative calendar modified accordingly?
Ms. Pratt: Yes. The standing order is respected. However, it can be waived by a majority. It is a question, again, of what that balance of power is and how significant the issue is.
The standing order, the two thirds cut off, does enable committees to inquire into different bills and take the time to do that. If something were urgent and in the national interest to do urgently, then the Senate would waive that standing order by a vote.
Senator Loffreda: Thank you for that.
I wish to explore the pre-study of bills. Could we explore the issue of what we call here in the Senate pre-studies of budget bills? We do those often, and we never have enough time, especially when there is $400 billion going through.
I must say that the budget implementation acts do not cover the full budget. I like to say that they are almost fiscally responsible given that, because we tax the banks and what have you. Not all major items get in there.
I understand that Australia has a similar approach when particulars of certain proposed expenditures of appropriation bills are referred to relevant Senate committees while the bill is still in the House of Representatives. We are very similar. The obvious use of these pre-studies is to allow senators an early opportunity to review proposed expenditures before the bill is adopted by the House. Once the bill is actually sent to the Senate, much of the work has already been accomplished, and the bill can usually go through the legislative process much quicker.
Unlike in the House of Representatives in Australia, I note that only senators will question government officials directly as part of their pre-studies of appropriation bills. Can you explain to us why that is the case? Why would the House limit itself to a debate in the chamber? And how often have senators raised serious questions — I think we covered a little bit of that — in pre-studies that the House could not ignore and proceed with amending appropriation bills. You have covered some of that, but maybe you could elaborate.
It is not a common occurrence, I hear. Is it like in Canada, where budget bills are rarely amended? We do send observations at times, and recommendations, obviously. We also do that, especially at the Finance Committee. Many times, we’ve come up with observations and recommendations. Could you elaborate on that?
Ms. Pratt: In the House of Representatives, they do not have the same kinds of inquiries. That is because the government has had the numbers and, over time, it has been the fact that they do not do that kind of work. Meanwhile, the Senate has worked to empower itself to get on top of the fact that it has a more constrained constitutional role, if you like, as the house of review, and has really sought to empower itself in its culture regarding how it deliberates on the budget but also scrutinizes government more broadly.
I wish to emphasize that when we sit in Senate estimates, we are talking about everything. It might not pertain to why this amount has gone up or this amount has gone down. It might be about the programmatic reason for that, or it could be about the roll-out of something that has not changed in the budget for many years but is no longer seen as being as effective as it once was. Our debates are very diverse in that respect.
Now, my jet lag means that you will probably have to repeat the part of the question that I have not gotten to. Sorry, senator.
Senator Loffreda: Time is up. Maybe on second round or third round, if you have a few rounds. Thank you.
[Translation]
Senator Forest: Do you have main estimates in your budget process? Do you then have supplementary estimates (A), (B) and (C)? Is that the same situation in your area?
[English]
Ms. Pratt: Yes.
[Translation]
Senator Forest: Is there a set period for studying each of these supplementary estimates?
[English]
Ms. Pratt: Yes, but again, there is a quote that I wish to give you. In Chapter 16 of Odgers’, estimates scrutiny is described in the following terms:
. . . an important part of the Senate’s calendar and a key element of the Senate’s role as a check on government. The estimates process provides the major opportunity for the Senate to assess the performance of the public service and its administration of government policy and programs. It has evolved from early efforts by senators to elicit basic information about government expenditure to inform their decisions about appropriation bills, to a wide-ranging examination of expenditure with an increasing focus on performance. Its effect is cumulative, in that an individual question may not have any significant impact, but the sum of questions and the process as a whole, as it has developed, help to keep executive government accountable and place a great deal of information on the public record . . .
So, yes, the four weeks a year, two in response to the main budget, one week in relation to additional estimates and one week in relation to supplementary estimates. However, we do not get bogged down in the budget papers unless an individual senator wants to. They may wish to respond to what is in those papers, but it is not really where the Senate gets its runs on the board as far as scrutiny of government goes.
It is the free-ranging, cumulative deliberation on long themes that holds government to account. Does that answer the question?
[Translation]
Senator Forest: Yes, very good. Thank you.
[English]
Senator Dalphond: So, essentially, the role of the Senate is to ensure transparency and ask questions about how the money is being used.
Ms. Pratt: Yes.
Senator Dalphond: Is that without the power to decide if it should be used differently?
Ms. Pratt: We have not blocked supply, but that tension between the two houses is very real when it comes to the government having a problem with its expenditure.
It becomes a massive area of public debate and scrutiny, where the difference between parties and houses generates its own momentum, if you like, rather than it coming down to the position of the Senate versus the position of the House of Representatives.
We don’t exercise those powers often, but sending a message to the House of Representatives is still important. As a government senator, we do not have the numbers. The crossbench and the opposition have the numbers. If they want to send a message, they can.
Senator Dalphond: Because of your numbers situation. Do you caucus with members of the lower house?
Ms. Pratt: Yes.
Senator Dalphond: As Labor?
Ms. Pratt: Yes, we do.
Senator Dalphond: So you can pass messages and say that something is not going well at the Senate or the government should give slack or make a change here or there?
Ms. Pratt: We currently have four ministers in the Senate, three of whom are in the cabinet. Of course, this is a particular dynamic for us as well.
I think you need to stick to your own power to make your own rules and what culture you want around that, yes. I wouldn’t get too bogged down —
Senator Dalphond: There are formal ways and informal ways that seem to be important.
Ms. Pratt: Yes.
Senator Dalphond: Did the Senate at some point use its —
Ms. Pratt: I looked at your government finance procedures and ours. It is important to remember that some of what you’re reflecting on has created procedures in remote government departments that you won’t know about. I did not know about how they work in ours, where the Department of Finance will say you have to write something up in a particular way. That is because of how the houses of Parliament do that. It means you should also engage deeply with those bureaucrats around how they present information to you and try to drive change there too.
Senator Pate: I would like clarification, please. You mentioned the standing order is respected but can be waived by a majority.
Ms. Pratt: Yes.
Senator Pate: Can you give some examples, since you have been there, of when you have waived that standing order?
Ms. Pratt: Yes. We had a high court decision the government did not like. We said, “This is a national security issue and we will quickly do legislation to amend that.” Usually, it has been around national security. I would think along with the global financial crisis and COVID, those would have been circumstances where we would have waived that.
Senator Loffreda: I understand that in the Australian Parliament, the practice is not to have budget bills being omnibus bills. They are specified and focused rather than omnibus in nature, to ensure transparency and accountability in the parliamentary review process.
I want your thoughts on this: Here in Canada, the last Budget Implementation Act was 600 pages, a four-part bill with 44 separate sections. This is where I want your judgment, because everybody has an opinion, but judgment based on your evidence, research and experience with your focus in Australia. The government will justify this approach by claiming that all non-financial measures in their budget bill were actually referred to, in some way or another, in their budget document, including in the annexes. Is that also the case sometimes in Australia, where they will refer to it in the budget annexes, then put it in as a non-finance bill? They will not do that, right?
Ms. Pratt: No. They are precluded from doing that.
Senator Loffreda: Does that take away from the focus on the appropriation bills, on the budget itself?
Ms. Pratt: The budget itself will have a lot of detail in the portfolio budget statements about what government proposes to do, including, at times, how it will factor in future legislative decisions. It is not uncommon for a piece of the budget to blow out or not be implemented in a way that was foreseen because the Senate did not pass the future bill attached to that provision.
Senator Loffreda: Do you have absolute power, like in Canada? Does the Senate have absolute power?
Ms. Pratt: To block something?
Senator Loffreda: Yes.
Ms. Pratt: Yes.
Senator Loffreda: It is not like the House of Lords. You have the absolute power. Okay.
The Chair: Thank you very much, Senator Pratt. It was a real pleasure. Our other parliamentarians actually had a wine tasting from Australia on Queen Street. But we were here with you, so we feel a bit of the Australian —
We thank you on behalf of our other senators.
We have a meeting next week on November 26. Thank you, everybody.
We will have an opportunity to see you in Montreal during the weekend. Thank you.
Ms. Pratt: Thank you very much. It has been a real pleasure. I hope I did it justice despite my jet lag. Thank you.
The Chair: Thank you.
(The committee adjourned.)