Briefing binder created for the Deputy Minister of Finance on the occasion of his appearance before the Standing Committee on Public Accounts on December 9, 2024 on the Auditor General of Canada's report 8, entitled “Canada Emergency Business Account” - Annex F

Report on standing committee meeting

Name of Committee: Standing Committee on Public Accounts (PACP)

Date and time: December 4, 2024 (4:30 – 6:30 p.m.)

Subject: Report 8, Canada Emergency Business Account, of the 2024 Reports 8 to 12 of the Auditor General of Canada

Report Prepared by: Kalina Waltos, Parliamentary Affairs Analyst, Department of Finance

This summary is being sent for information purposes only and should not be quoted, as it may contain transcription errors. // Cet aperçu est envoyé à titre d'information seulement et ne devrait pas être cité car il pourrait contenir des erreurs de transcription.

Witnesses / Témoins

Export Development Canada

• Mairead Lavery, President and Chief Executive Officer
• Scott Moore, Executive Vice-President, Finance and Chief Financial Officer
• Todd Winterhalt, Senior Vice-President, International Markets and Head of Communications and Public Affairs

Office of the Auditor General

• Karen Hogan, Auditor General of Canada
• Andrew Hayes, Deputy Auditor General
• Mélanie Cabana, Principal

Summary / Résumé

The Standing Committee on Public Accounts (PACP) met from 4:34 p.m. to 6:53 p.m., to hear from the Auditor General of Canada (AG) and Export Development Canada (EDC) officials in the context of Report 8, Canada Emergency Business Account (CEBA), of the 2024 Reports 8 to 12 of the Auditor General of Canada. The meeting was tense at times with questions focused on EDC's relationship with Accenture, contract management practices, and discussions with federal departments when developing the program.

Conservative Party (CPC)

Brad Vis asked who should be held responsible for distributing $3.5 billion in loans to ineligible businesses. Ms. Lavery said the program was delivered in an unprecedented time and with speed to support thousands of businesses. She spoke to the complexity of the program including changes to eligibility criteria, design and repayment timelines. MP Vis then asked why EDC did not pursue opportunities to undertake a competitive process to ensure value for money. Ms. Lavery said EDC went with a vendor that could match the speed needed to deliver the program. While they had a desire to use RFPs, aspects of the program did not allow for it.

Kelly McCauley asked several questions requesting the names of Department of Finance (DoF) officials that were advised when EDC indicated that did not have the capacity to run the CEBA program. The MP also sought confirmation that EDC already planned to contract Accenture at that time to which Ms. Lavery confirmed. MP McCauley also asked whether EDC was aware that Accenture would contract their own subsidiary. Mr. Moore indicated that Accenture ran a market scan and identified 24 options; they were aware that one was recently acquired by Accenture. They ultimately chose the lower cost and lower execution risk option to build the loan accounting system.

Citing paragraph 8.52 of the report, John Nater asked for the dollar value of cases of fraud identified by EDC and whether any criminal charges were laid. Ms. Lavery estimated the value at $1 million. She indicated that the RCMP did not provide details on follow up charges. MP Nater then asked how much of the forgivable portion has been received by EDC from ineligible recipients. Although EDC is still collecting those funds, Ms. Lavery estimated $2 billion has been repaid from that group. She said EDC agrees to work with the DoF to consider next steps related to forgiveness.

Bloc Québécois (BQ)

Nathalie Sinclair-Desgagné sought details about EDC's discussions with the DoF and Global Affairs Canada about their capacity to manage the program and requested any emails or related correspondence.  Ms. Lavery said they indicated to departments that it would be challenging to deliver the program and would need third party support. She said discussions were verbal and spoke to daily calls between the DoF, EDC, and financial institutions during the development phase. MP Sinclair-Desgagné asked for the number of calls received and answered by the call centre, noting that many businesses had difficulty reaching operators. Ms. Lavery described the call centre process and the use of a call-back model because of the high volume.

In the next round, MP Sinclair-Desgagné asked how much money was disbursed through Brazil since Accenture contracted its own subsidiary located there. The AG said the contract was issued to Accenture, but not all staff were working in Canada. Mr. Moore added that the Brazil contract was $17 million, which was less than 10% of the total expenditure.

New Democratic Party (NDP)

Richard Cannings asked whether the AG examined the impact of a loan extension on Canadian businesses and the economy. The AG did not examine the impact of extensions. She noted difficulties in measuring the program's overall impact because of different relief measures at the time, particularly since it was not tied to a specific industry or policy. Turning to EDC, MP Cannings asked if they considered removing themselves from the program in favour of Accenture. Ms. Lavery noted that EDC had a role in disbursements to financial institutions, application processing, and other aspects of the program.

In the next round, MP Cannings asked why EDC managed the contract with few controls and at an hourly rate. Mr. Moore said the final pricing and terms were managed by EDC; they worked with the vendor on the scale and speed of the program. He added that EDC prefers deliverable-based contracts, but pursued a different option given frequent changes and lack of clarity in the program's scope, eligibility, and so on.

Liberal Party (LPC)

Francis Drouin sought details on EDC's relationship with Accenture and the rationale for pursuing a sole source contract. Ms. Lavery said that Accenture was an existing service provider, for which EDC ran an RFP process in 2017. MP Drouin spoke to his concerns with Accenture's billing practices and asked whether EDC planned to recover costs. Mr. Moore explained that the call centre issue was not a result of overbilling, but instead a documentation issue. MP Drouin then asked about EDC's rationale for partially agreeing with recommendation 8.24. Ms. Lavery said EDC agrees to work with the DoF to consider next steps. However, EDC needs policy direction from the government to proceed with loan forgiveness.

Valerie Bradford asked the AG to expand on the difficulties of launching a large-scale program during the pandemic. While the AG recognized EDC's rationale for a single vendor at the beginning of the program, she was concerned that they continued to rely on the same vendor and use hourly contracts over three years rather than running a competitive process. Despite delays in receiving policy direction, she stated it was EDC's responsibility to get the best value for money. MP Bradford then asked if the CEBA would have better value for money if it were administered by the public service. The AG said the public service was already administering several pandemic programs. She said the primary issue was poor contract management.

Jean Yip asked EDC for a timeline of when and how recipients were deemed ineligible. Mr. Moore spoke to two distinct groups within the ineligible category as well as EDC's validation process.

Motion Debate / Débat sur la motion

MP Nater moved the following motion to initiate a study on Report 8, CEBA (exact text to be verified against official transcript). The committee agreed to adjourn debate on the motion and may discuss it at its next meeting.

Motion (not voted on): Given that the Auditor General's Report 8 2024 on the Canada Emergency Business Account (CEBA), which revealed significant issues regarding the oversight and administration of public funds and concerns related to governance, procurement and risk management:

Pursuant to Standing Order 108(3)(g), the study commence a study on this audit and invite the following witnesses to appear:

• Ministers of National Revenue, Finance, and International Trade
• Bob Hamilton, Commissioner of the Canada Revenue Agency
• Chris Forbes, Deputy Minister of Finance
• Representatives from Accenture, firm involved in CEBA's administration
• Vivian Abdelmessih, Chair of Export Development Canada's Board
• Mairead Lavery, Chair and Chief Executive Officer, Export Development Canada
• Miguel Simard, Senior Vice-President, Chief Legal Officer, Special Risks, and CEBA, Export Development Canada

MP Khalid moved the following motion outlining PACP's future business (exact text to be verified against official transcript). While the chair ruled the motion out of order, the committee overturned his decision. No decision was made on the motion, and the committee may resume discussions at its next meeting.

Motion (not voted on): That, notwithstanding any previous decision of the committee in relation to the committee's future business, it be agreed that:

• Any further meetings on Report 8, Canada Emergency Business Account, take place after January 27, 2025
• One meeting be dedicated to the study of Report 1, ArriveCAN
• At conclusion of meeting on Report 1, ArriveCAN, no more meetings be conducted to hear from witnesses in relation to Report 1
• Two meetings be dedicated to study of Report 6, Sustainable Development Technology Canada, for purposes of hearing from Zoe Kolbuc, Andrew Noseworthy, and Minister of Innovation, Science and Industry
• At the conclusion of second meeting on Report 6, Sustainable Development Technology Canada, no more meetings be conducted to hear from witnesses in relation to Report 6
• Two meetings be dedicated to Report 11, Programs to Assist Seniors
• Two meetings be dedicated to Report 9, Digital Validation of Identity to Access Services
• The chair schedule at least two meetings for consideration of draft reports for all the above
• Notwithstanding a meeting called pursuant to Standing Order 106(4), no meetings of the committee or subcommittee be held during parliament's adjournment between December 18, 2024, to January 26, 2025.

MP Nater's Amendment (not voted on): Under 1), replace "January 27, 2025" with "December 5, 2024".