Public Accounts Committee on June 4th, 2009

[Jelena Milicevic]

Thank you.

[The Chair, Liberal, Shawn Murphy]

We'll have a brief pause and then we'll resume the meeting.

[The Chair, Liberal, Shawn Murphy]

I call the meeting back to order.

The next item of business, colleagues, is the review and approval of the minutes of the steering committee that was held on Tuesday, June 2, 2009. Those minutes have been circulated, as has the remaining schedule. Perhaps we'll run through that.

There are not too many meetings left, as you can see. On next Tuesday, June 9, we will deal with passport services. That meeting has been arranged.

On Thursday of next week, we have the Governor-in-Council appointment process. I want to point out to members of the committee that there is what I consider to be a fairly significant difference in interpretation between the Office of the Auditor General and the Office of the Privy Council as to the mandate of the Office of the Auditor General.

I have asked for the views of each office. I believe the Auditor General's office has responded, but the Office of the Privy Council has not. I've also asked for a legal opinion from the parliamentary counsel. That's also forthcoming.

On Tuesday, June 16, we have “Chapter 6--Selected Contribution Agreements--Natural Resources Canada”, from the spring 2009 report.

Then, on June 18, we will be calling in someone from contracting for public services. This, again, is dealing with the issue of the tapes. Public Works are alleging that they can't release the whole tapes because they have concerns about the Privacy Act legislation, which our legal counsel has indicated is not the case. But before we went further on that, we thought it would be wise to hear from Public Works.

Then, if we are here on June 23, we have draft reports.

That basically is the nuts and bolts of the steering committee, I believe.

Mr. Saxton.

[Andrew Saxton, Conservative, North Vancouver, BC]

I have just one clarification on the minutes of the steering committee in the very last paragraph, where it says that the “Chair write to the Deputy Minister, Public Works and Government Services Canada, and invite him to appear before the Committee....”. I believe it was agreed that somebody would come from that department, but not--

[The Chair, Liberal, Shawn Murphy]

Or his designates.

[Andrew Saxton, Conservative, North Vancouver, BC]

Yes--or his designates.

[The Chair, Liberal, Shawn Murphy]

Mr. Saxton is right. That should say “invite him or his designates”. He can send whoever he wants on this issue. Is that agreed?

[Voices]

Agreed.

[The Chair, Liberal, Shawn Murphy]

Is there any other discussion?

Okay. Then the Chair would entertain a motion for the approval of the minutes as amended. It's moved by Madam Faille.

(Motion agreed to)

The next item of business, colleagues, before we go into the reports, is to deal with the motion of Mr. Christopherson. That motion has been circulated.

Before we even go to Mr. Christopherson, I just want to point out, especially for the newer members of the committee, perhaps, that we have no binding authority on the work of the Office of the Auditor General. All this motion will be is a request to her office.

They can take it into consideration. They can follow it or they may not want to follow it for their own reasons. That's all it is, a request, so don't consider it to be an order or a mandate to that office. I simply wanted to point that out.

What I'd like to do is perhaps give Mr. Christopherson up to two minutes, then entertain six or seven interventions--if people want to intervene--and then put the question.

Mr. Christopherson, for up to two minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you very much, Chair.

Colleagues, consistent with the chair saying that all we can do is make a request of Auditor General, none of my comments in my question in the House have concluded that there was something wrong, but there's certainly enough around this issue.

For those of you who don't know, Canada Post was advised by Air Canada that within 120 days they were no longer going to be able to provide their airmail service. There were a couple of calls made out to some potential bidders, and then they were notified that it was all right, they weren't going that route; they were just going to go with Purolator.

The concern is that it's over $100 million, I think, over three years. There is a personal connection between somebody who is on the board of Purolator, which is owned by Canada Post, and the ultimate agency, because there was another airline that was contracted by Purolator. There are connections there.

So the issue becomes, was it necessary to source, or should this have been put out for public tender? Since I asked my question in the House, I can tell you that I've received a letter from Cargojet. I've never spoken to anybody there and I don't know anybody there that I'm aware of. This came to me after I asked my question in the House. I'll be glad to share it with colleagues. Their letter says in part:

The unilateral decision by Canada Post and its Board, to circumvent the normal bid process and award this major contract to an insider company, whose owner sits on the Board of and owns 7% of Purolator Courier, a subsidiary of Canada Post. The aircraft that are being provided by Kelowna Flightcraft were apparently sourced and selected well prior to this opportunity becoming public knowledge and this contract ultimately being awarded. The lack of transparency in the awarding of this major contract is clearly evident and as anyone can determine by the many responses/comments attached to the Globe and Mail article, there's a genuine concern that there may be a serious breach of acceptable government procurement and bid process, and how and to whom this major government contract....

So when these kinds of things are raised, it's not only political; there are competitors out there who have a concern. All I'm asking is that this committee endorse the request of the Auditor General to take a look. If there are no problems, there are no problems, but there needs to be some transparency on this. So that's the request.

Thanks, Chair.

[The Chair, Liberal, Shawn Murphy]

Does anybody else want to speak to this motion?

Mr. Kramp, then Mr. Saxton.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Mr. Chair, I have no difficulty with the premise of what the member is saying. My only concern is whether he would be open to a friendly amendment. I think it's a valid request. The difficulty is, of course, that the matter's already now before the transport committee. They are meeting on the eleventh of this month on this matter.

[A voice]

Oh yes?

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

They are.

Should they not deal with this in a manner that's deemed acceptable by this committee.... But I think it would be a little bit redundant for us to just go down the same path again. I have no difficulty if the member wishes to bring this back at a later time or even subject to the time or the direction and, I suppose, the purpose and focus of the committee. He would obviously have access to minutes of that.

If something sort of walks like a duck, you sort of wonder if it is a duck. I share his concerns, but I just don't want to go down the same path that someone else is already going down. I think it's a valid point, but could we possibly consider it when he takes a look into the transport committee motion and their testimony and where that has taken us?

[The Chair, Liberal, Shawn Murphy]

Mr. Saxton, you have up to a minute.

[Andrew Saxton, Conservative, North Vancouver, BC]

I just wanted to echo what Mr. Kramp has said. I think we should try to avoid duplication at this point and take a look at it after transport has looked at it.

[David Christopherson, NDP, Hamilton Centre, ON]

Can I ask a question? I don't want to deny anyone....

[The Chair, Liberal, Shawn Murphy]

Go ahead.

[David Christopherson, NDP, Hamilton Centre, ON]

Well, it's only if we have a resolution. I'm open-minded on it. I didn't know that the committee was doing that. Could somebody give me an idea of when they're going to deal with it?

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

It's scheduled to be on June 11 at this point.

[The Chair, Liberal, Shawn Murphy]

Mr. Young.

[Terence Young, Conservative, Oakville, ON]

My impression is that the Auditor General does comprehensive audits with the hope of doing a thorough investigation of a department or a series of events to provide recommendations to improve the situation. She's not an investigator who investigates a single contract, so I have a concern about that.

But I do want to ask Mr. Christopherson to explain again what his concern is. I understand that Purolator is owned by Canada Post, and it sounds logical to subcontract it to a company they own, which is also owned by the taxpayers. Maybe you can explain again what your concern is.

[David Christopherson, NDP, Hamilton Centre, ON]

My concern is exactly what Cargojet, as one entity, is concerned about: that there wasn't an opportunity. They're saying that within 120 days they could have easily put together a whole package. I think they said they could build an aircraft in that time. But they could do anything within 120 days and they didn't see why the urgency was legitimate enough to set aside the normal process, which would be to give this company and others an opportunity to bid. That's what it's about.

Was it a justifiable decision to sole source? If it is, cool. If it isn't, then we need some accountability on that. That's the essence of it. Also, there were some initial phone calls made to see whether or not some of the competitors would be willing to bid, and when they expressed interest, the next thing they heard was, forget it, we're not going down that road. It's very unclear, and it's a lot of money.

By the way, if I can, it's perfectly in order for any individual member of Parliament, let alone this committee, to request the AG to look at anything.

[The Chair, Liberal, Shawn Murphy]

Ms. Crombie, you have up to a minute.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

I wanted to know whether it's within her mandate to review such a contract. I guess it doesn't matter. If we can ask her, she can make the decision if it is.

I'd like to know also from Mr. Kramp's committee what aspect of the contract they'll be reviewing. Are they reviewing this specific contract, as Mr. Christopherson describes?

But I am not opposed to asking the Auditor General, if it's within her mandate, to review it so that we can be consistent and look at whether accountability procedures have been followed, whether there was due process and transparency. I wouldn't be opposed to it.