I call this meeting to order.
Welcome, everybody, and thank you very much for coming this afternoon to meeting number 22 of the House of Commons Standing Committee on Government Operations and Estimates.
The committee is meeting today from 4:49 to 6:49. We will hear from the Minister of Public Services and Procurement Canada as part of the committee's study on the subject matter of supplementary estimates (C), 2020-21.
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I want to thank the minister for being here today and for offering to be here for 90 minutes. It's greatly appreciated.
At this point in time, I invite Minister Anand to make her opening statement.
Thank you so much, Mr. Chair.
Good afternoon, committee members and Mr. Chair.
Before beginning, I would like to take a moment to acknowledge that I am meeting you from the territory of many first nations, including the Mississaugas of the Credit, the Anishinabe, the Chippewa, the Haudenosaunee and the Wendat peoples.
With me today are the deputy minister of PSPC, Bill Matthews; associate deputy minister Michael Vandergrift; and assistant deputy ministers Arianne Reza and Lorenzo Ieraci.
Today I am pleased to discuss PSPC's supplementary estimates (C) for the fiscal year 2020-21. First, allow me to address my department's 2019-20 departmental results report.
Among our many accomplishments for that fiscal year, we launched two Coast Guard vessels and delivered a third to the Navy. As well, the open and transparent competition to replace Canada's fighter fleet marked an important milestone in 2019 with the release of the formal request for proposal to pre-qualified suppliers.
We also advanced efforts to ensure that public servants are paid accurately and on time, and significant progress has now been made to reduce the backlog of pay transactions as a result of the Phoenix pay system.
PSPC's work for the year also supported the government's climate action and sustainability priorities by reducing our operational greenhouse gas emissions by nearly 60% through energy efficiencies in our real property portfolio.
Mr. Chair, these are only a handful of our accomplishments.
Of course, when the pandemic landed on Canada's shores in early 2020, my department responded quickly to procure services, supplies and equipment to protect the health and safety of Canadians.
Let me move to a vaccine update. As this committee well knows, this past year was truly like no other. The loss of precious lives, the depths of trauma experienced by Canadians and the damage to the economy wrought by COVID-19 continue to reverberate. With an ever-increasing supply of vaccines now flowing into this country, and more and more Canadians rolling up their sleeves, we are finally beginning to see a light at the end of the tunnel.
My department has pursued a diversified approach to vaccine procurement, and that approach is paying off. Canada is now set to receive 36.5 million doses before Canada Day, and we are continuing to work with vaccine suppliers every day to move up deliveries of doses.
By the end of September, all those who are eligible in Canada will have access to a vaccine. However, we know that our extraordinary procurement activities will need to continue. There is more work to be done.
I shall move to supplementary estimates (C).
To that end, the majority of funding we are requesting in our supplementary estimates is meant to continue supporting Canada's pandemic response. Namely, PSPC is requesting to convert $380 million in unused statutory funding into voted appropriation. This will allow us to continue procuring critical goods and services on behalf of the Public Health Agency of Canada and to help with Canada's ongoing response and recovery efforts.
The PSPC quickly mobilized a significant portion of its workforce to focus on COVID. This has left a large gap in the day-to-day operations of the department, which have not slowed during the pandemic. Therefore, we are also seeking $8.2 million to help PSPC handle other critical procurements to support the ongoing operations of government.
Beyond pandemic-related activities, we are seeking $6.1 million for additional resources to correct data errors in the federal pension system that were transmitted by the Phoenix pay system. While the number of incoming data errors has declined recently, a backlog of files has accumulated that requires attention.
In addition, we are seeking $9.2 million for accommodations costs for pension administration employees, and we are requesting a transfer of $1.6 million to Shared Services Canada as part of an effort to consolidate IT services and decommission data centres. This will save considerable costs in providing data, email and telecom services for government operations.
Mr. Chair, PSPC will continue to lead on many other critical initiatives—from maintaining federal buildings, to defence procurement and supporting the national shipbuilding strategy. That strategy is revitalizing our marine sector and creating jobs for Canadians across the country.
I want this committee to know that we are applying recommendations from the Auditor General's recent report on the national shipbuilding strategy, and we are working with our partners to closely manage shipbuilding progress.
These are just a few examples of our department's wide-ranging work to support Canadians. The funding requested today will allow us to continue to do our important work for Canadians on many fronts, while continuing to procure vital supplies and services that are keeping Canadians safe in this time of crisis.
Thank you very much.
I want to indicate that while it has been a while since I've been to the committee, I have had four appearances at OGGO, and eight appearances across five committees, with 9.5 hours of testimony in total. I am very interested in being collaborative and transparent with Parliament, and working with Parliament.
In terms of your question relating to the EU, we have managed, despite the EU's transparency mechanisms, to continue to get our vaccines out of Europe, because of our diplomatic efforts.
In addition, we are seeing a record number of vaccines coming to Canada, two million this week alone, nine and a half million by the end of March, 36.5 million prior to the end of June, and 118 million prior to the end of September. Our diplomatic efforts are working.
Thank you, Madam Minister.
I'm going to talk about the ventilators now. We heard on Monday from one of your senior officials, Mr. Mills, that you ordered 40,000 ventilators last year. At the time, I asked how many were needed, because, from the beginning, I thought that was just an unbelievable order.
Of the 40,000 ventilators in a nearly $1 billion contract, 500 were used. We have received 25,000 ventilators, so they have already been manufactured. We have no choice but to pay for them. Fifteen thousand ventilators are still to be manufactured.
Can we terminate the contract to save hundreds of millions of dollars? Can we do that?
Madam Minister, with all due respect, no one, not you, not your senior officials, is asking questions. You say yes, you send the contract and you issue the cheque.
We end up spending $400 billion. Every time a question is asked, the answer is that we have no choice. It doesn't work that way. On the one hand, people are going to have to pay back $1,000 or $2,000 because they received too much CERB and on the other hand, we are spending billions of dollars without question, and that's okay.
Mr. Chair, my time is up, but I would have had a lot of questions.
Thank you, Madam Minister.
To our witnesses, thanks very much to all of you for being here today.
Especially, thank you to Minister Anand for joining us again today. This must be setting a record for the number of times a minister has appeared before committee in this amount of time, and in a pandemic no less, when I know you're working around the clock to procure PPE and of course vaccines in the most competitive market imaginable.
I want to switch topics a bit and start with a very west coast question. I'm proud to have a Seaspan shipyard within only a few minutes of my riding. I have many constituents who work there. I know they're doing some great work on various projects as part of the national shipbuilding strategy, and they are not shy about telling me about that. We also had the opportunity to see it in person last year.
Minister, please update us on the NSS, the work that's being done at Seaspan and the importance of the shipbuilding industry to our blue economy.
The national shipbuilding strategy is a very important aspect of the work that PSPC does. It's a key component to revitalizing Canada's shipbuilding industry, setting them on the path for further national and international projects in the future.
Seaspan was mentioned in the question. It's our west coast partner in the NSS. They're doing great work in relation to our joint support ships project. These ships are essential to our overall naval posture and will ensure that both Canadian ships and those of our allies have access to essential supplies while deployed. I look forward to continuing to engage with the member, with the NSS and with the shipyards while we move down the road to completion.
In addition, I want to make sure that all members of the committee recognize that through the NSS our government is creating good middle-class jobs across the country. This includes $1.54 billion annually to the economy and over 15,000 jobs per year. Through our fully costed and funded plan and our successful management of the NSS, we are delivering for Canadians, and we will continue to deliver for Canadians, whether it's the shipbuilding strategy, the delivery of PPE, the delivery of vaccines.... The list goes on, Mr. Chair.
There's another issue that's especially prominent. Across the country, money laundering is an issue in Canada, but it's especially prominent in my province of British Columbia, where the nature of the money laundering that we see there actually has been given a name. It's called the “Vancouver model”.
The province has launched the Cullen commission. It has uncovered how in some cases we have Chinese capital evading some of the currency export controls through the fentanyl trade to Canada, which is then being laundered through real estate and casinos. This has an impact not only on fuelling the deadly opioid epidemic that we're having in B.C., but also on raising the price of real estate.
That's why I was very curious to see that in the supplementary (C)s, there is $419,229 under vote 1 for operating expenditures, which is requested “to strengthen Canada's anti-money laundering and anti-terrorist financing regime”.
My question to you, Minister, is, what specific measures would be implemented with the requested funding and how will they strengthen Canada's anti-money laundering and anti-terrorist financing regime?
Thank you so much for that very warm welcome.
I just want to say thank you to the member for Richmond Hill and the member for Hamilton Centre for their advocacy in favour of M-36, which passed unanimously today and which is one of the highlights, I think, that this Parliament has achieved since I've been an MP.
I will move now to the question of domestic production. From a vaccine procurement standpoint, my role has been vis-à-vis the seven advance purchase agreements with the suppliers, which I believe I discussed with you the last time I was at committee. In terms of domestic production, that is a lead that is taken by ISED. Domestic production within Canada is within that ministry.
However, to respond to your question, we are investing over $120 million to expand the National Research Council facility [Technical difficulty—Editor] to produce two million doses a month. This is in addition to $600 million to support the private sector vaccine development and production in Canada.
I want to thank the minister for appearing before us.
Minister, I also want to talk about vaccine procurement. I'm an MP from Ontario, as you know, and I come from where the sunshine rises in Ontario—far, far east.
We know Ontario has over 570,000 doses in its possession right now. In January and February you reiterated on multiple occasions that Canada would get at least six million vaccines from Pfizer and Moderna. Despite the fearmongering from opposition members, you reiterated on multiple occasions there would be no reason to believe our vaccine suppliers would not respect their contractual obligations.
Recently the AstraZeneca vaccine was approved in Canada, and you were able to secure over 500,000 doses prior to March 31 through Covishield. How were you able to do that? Could you explain to this committee the relationships you have with various vaccine suppliers?
I want to point to the fact that because of our negotiations—and I am involved in these negotiations—we have been able to increase the number of doses that Canadians will receive this quarter by 3.5 million. This is as a result of, first, the agreement with the Serum Institute of India. Second, Pfizer agreed to accelerate 1.5 million doses from the second quarter to the first quarter as a result of our aggressive negotiations. Third, we have negotiated with the U.S. government for the delivery of 1.5 million AstraZeneca doses, which should arrive in Canada very shortly.
How do we do that? Because we are aggressive at the table. We want to make sure we have earlier and earlier doses for Canadians. We did that with Moderna prior to the holidays. We did that with Pfizer before the holidays and again in this quarter, and we did that with the Serum Institute and the U.S. government.
Our approach is that we will not stop negotiating aggressively to continue to see doses arriving in Canada. That's why we're going to see 36.5 million doses prior to Canada Day and 118 million doses from approved suppliers alone prior to the end of September, and we have another vaccine in rolling review with Health Canada—that's Novavax.
All in all, Mr. Chair, our diversified portfolio of vaccines continues to serve Canadians well. We did not bank on one vaccine from any one country. We put our eggs in multiple baskets, contrary to what the opposition continually says. We diversified our approach and can continue to serve Canadians with vaccines coming from multiple countries and multiple locations and multiple suppliers.
I have a lot of questions. I always ask questions to understand better. I'm not playing petty politics or being partisan in committee. I'm here for the taxpayers.
Yes, the question about the average cost of vaccines is appropriate, because it allows the public to know whether or not our vaccines are reasonably priced compared to the rest of the world, and whether it would be more cost-effective to manufacture them here. So, yes, this question is appropriate
I didn't appreciate being told that a question was not appropriate when I was asking it in the interest of the taxpayers, who pay for each of us here. In short, the message has been sent and it is on record.
Having said that, in the new budget, $6.1 million is allocated to the administration and data integrity of the public service pension plan.
First, that was not in the other three parts of the budget. Second, are we talking about data integrity because we are currently concerned about the data in our public servants' pension plans?
Thank you very much, Mr. Chair, and Minister.
I really appreciate you joining us here today. I just want to recognize, frankly, the incredible work that you and your department have done in the face of unprecedented circumstances. The level of coordination and co-operation that was required across all levels of government is simply incredible in this unprecedented environment.
I want to focus on the issue of personal protective equipment. I know that in my riding of Windsor—Tecumseh an excellent example of Canadian industry stepping forward to retool and respond to the pressing need is Harbour Technologies. Its contributions have saved lives and I'm proud of its contributions to the health and welfare of the provinces.
Minister, the opposition have raised concerns about our PPE procurement and whether you did enough to engage Canadian industry.
Minister, can you outline your PPE procurement strategy and what steps you took to ensure that Canadian suppliers were fully part of the process?
I would like complete my response to the last question. The number that matters the most is the number of Canadians that are vaccinated. That number is increasing by the hundreds of thousands every single day. Over the course of time, as the millions of vaccines come into this country, we will continue to see our Canadian population vaccinated. It's important to recognize that Canada is competing in a global environment, and we are still able to get vaccines into this country and into the arms of Canadians.
Now onto your question.
The procurement of PPE was the first mountain that we climbed at PSPC during this pandemic. We procured over 2.7 billion pieces of PPE, and over 1.5 billion have been received to date. We have contracts in place for face shields, gloves, gowns, hand sanitizers, N95s, non-medical masks, cloth masks, surgical masks and ventilators.
What we have done in this procurement process is to ensure we have domestic capacity in place, just like Harbour, the company you mentioned. It's important to note that over 40% of our contracts, by dollar value, are with Canadian companies. While we procured from a multiplicity of sources, we ensured that Canada would never again be in a situation that it was in at the beginning of this pandemic.
In addition, this time last year, there were no N95 Canadian-made masks in this country. Now a company, Medicom, in Quebec, has produced 10 million N95 masks. The 3M plant in Brockville, that we entered into a contract with the province of Ontario, is up and running and producing masks.
Finally, if I could go back to the question that I was asked regarding rankings, I like to speak in hard facts. I like to provide the documents to my colleagues before I cite numbers from them. We are 12th in the OECD in total doses administered. That is a far cry from 60th.
I can answer you quickly, Madam Minister.
We have taken 400 ventilators that were already available from the national emergency strategic stockpile, and 500 new ventilators have been manufactured. That leaves 25,000 that are not needed or may be needed in the future. However, that is far too many. We could cancel the contract for the remaining 15,000 ventilators and save the equivalent of the taxes of 25,000 Canadians. Since you don't want to answer, let's continue.
In the November economic update, your colleague , the Minister of Finance, mentioned that $14.3 billion was for vaccines and therapeutic products. This includes $1.3 billion for COVAX—which is fine—and $2 billion to pay for two doses of vaccine per Canadian. We don't know where the other $11 billion goes.
Here's my question. Should we pay the companies even if we don't need the hundreds of millions of doses of the suite of vaccines you have famously reserved, yes or no?
I'd like to also thank the minister and the department, not only for appearing in front of us once again, but also for the amazing work you've been doing.
Minister, my colleague, MP Drouin, wanted to focus on the first quarter, and vaccine procurement and the great work you've done. Just for the sake of Canadians—so many of them are watching—and making sure that you have an opportunity to send the message to Canadians, can you share with us what our plan was for Q2 and Q3 and what efforts you have made to increase those numbers? Also, what is our situation right now for Q2 and Q3?
That's for the initial estimates that you provided, with the now updated estimates, and the efforts that you and your department have made, whether through diplomatic efforts or direct conversations that you've had with the manufacturers.
We are leaving no stone unturned in this race for vaccines for Canadians.
As you can see, and as I've mentioned, we were able to accelerate 3.5 million doses from later quarters into this quarter to accelerate the pace of vaccinations for Canadians. In addition, we've moved up 17 million additional doses from Q3 to Q2 or Q1 to ensure that 36.5 million Canadians will be inoculated should they want a vaccine prior to the end of June, and then 118 million prior to the end of September, and that's just from approved suppliers alone.
We are continuing to ensure that the vaccine suppliers and other organizations such as the Serum Institute of India, as well as governments—including the United States government, with whom we negotiated successfully for 1.5 million doses of AstraZeneca arriving very shortly—are keenly aware that Canada is willing and able and aggressively looking for the acceleration of doses on a day by day or week by week basis.
That's why, Mr. Chair, I am continually in touch with our suppliers not just weekly but daily, to ensure that we have the earliest possible delivery of vaccines into this country. Despite vaccine nationalism that we are seeing throughout this world, Canada has continued to receive shipments of vaccines from Europe and from India because of the commitment we have every single day to ensure that vaccines are arriving on this country's soil, and it's a task that we will not stop at until it is accomplished.
I want to start by saying that early on in the pandemic we were heavily criticized by the opposition for not having testing and rapid testing kits available, yet, Mr. Chair, we procured 40.5 million rapid tests. We delivered over 20 million of those rapid tests to the provinces alone, and we are continuing to engage in procurements of rapid tests. That's just an example of what we are doing to support Canadians in this pandemic.
Whether it's rapid tests or syringes, alcohol swabs, sharps containers, gauze, vials, deep refrigerators or ultra-deep refrigerators, we have been procuring and procuring a continual supply of items to support the provinces and territories in their response to this pandemic.
I thank the member for her question.
I would like to add a few comments. The member asked if these costs were foreseeable. Yes, they were, but there were some revisions, after determining exactly how many people were working on the pension files. There is a formula to reimburse the department for the funds used to pay for the office accommodation costs.
It's an end-of-year adjustment that gets based on the salary cost. I believe it's 13%. It's an end-of-year formula that we calculate.
Sometimes, even though these numbers are forecastable, we have to wait until the Treasury Board approvals come through to include these numbers in the estimates. That is often why they show up in supplementary estimates (B) or (C).
I'm going to start off by setting my politics aside for a moment. I just want to have a human moment if that's possible, heading into this third wave and after what has been a very long year, and say that I do appreciate that the minister continues to come back.
I feel that in this committee it is often the case that things become fairly confrontational. I want to just acknowledge that and I want to acknowledge that it is not personal when things become confrontational. There is a general feeling that I've been having about the way we do this work. We have limited time, and it sometimes feels like—and this is an “I” statement—the questions we're asking are not being adequately answered and sometimes it feels like witnesses and testimony to this committee seek to run the clock out in ways that don't provide us with the fullness of answers we're trying to actually get.
I want to go on the record to say that, Mr. Chair, because I know your job is tough and I know that we're all under a lot of pressure, but I want to note that I think the minister, in this particular role and in this particular crisis, has made an exemplary effort to continue to come back to this committee and even to avail herself, after the technical difficulties. I want to just say that with my first one and a half minutes.
With that being said, I need to pick up where we left off, which was a disconnect, quite frankly, between the honourable minister, through you, Mr. Chair, and her ADM, so I will ask the question to the honourable minister.
When you do procurement, do you include, domestically, taxes in your estimation of costs?
Through you, Mr. Chair, there's no confusion. I've had members from the Department of National Defence before us, and we've had the Parliamentary Budget Officer before us to talk about this stuff, and they are not including the tax. That is what the PBO's report says. There's a material non-disclosure in the estimates that is almost a $20-million difference, $30 million almost, in some of the cost estimates, of which some of them are including tax.
We had the minister suggest, and I think quite rightly, that she was taking the Parliament Budget Officer's estimate into account, and yet when you took the answer, sir, through you, Mr. Chair, you said that was not the case, that you were going to go with the Department of National Defence.
We're talking about line items, but on the surface combat shipbuilding program that started off at $26 billion, we're now looking down the barrel of $82 billion—capital, big B. In all the pressures we have here across services and investments in Canadians, we're going to spend $82 billion on warships in the middle of COVID, a program that could be, as identified by the PBO, sought for $26 billion or such.
I recognize the investments in local industry, but I mean, for that much we should have a nationalized manufacturing section. That's enough for us to build our own ships at that point, so I'm wondering why the Irving family and others get this kind of blank cheque for $80 billion.
I will put that back to you. If the PBO is right and that cost goes to $80 billion, who is responsible, your department or the Department of National Defence?
Thank you. It's much appreciated.
I want to thank everybody for participating today. Thank you to the minister in particular for giving us the extra time.
Mr. Matthews, Mr. Vandergrift, Ms. Reza and Mr. Ieraci, thank you for coming back here on so many occasions. We appreciate it. We look forward to having you here again.
That said, we are only two minutes over time. I want to thank everybody for bearing with us.
I declare the meeting adjourned.