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Addressing misconduct and wrongdoing: Public Services and Procurement Canada

Public Services and Procurement Canada
Addressing misconduct and wrongdoing

(Fiscal year 2024 to 2025)

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Message from the Deputy Ministers

Public Services and Procurement Canada (PSPC) plays an important role in the daily operations of the Government of Canada. It supports federal departments and agencies in the achievement of their mandated objectives as their central purchasing agent, real property manager, linguistic authority, treasurer, accountant, pay and pension administrator, and common service provider. With a workforce of more than 19,400 employees, the department manages an annual gross budget of approximately $11.5 billion. Our mandate includes ensuring the stewardship of public funds and maintaining high ethical standards across all our operations.

This first Annual Report on Actions to Address Misconduct and Wrongdoing highlights our department's commitment to upholding integrity and accountability within PSPC and among our suppliers to the federal government.

The department has a suite of programs, policies and processes in place that guide our approach to misconduct and wrongdoing. These include, but are not limited to, the Office of Supplier Integrity and Compliance, the Anti-Fraud Hub, a Special Investigations and Internal Disclosure Directorate dedicated to investigating suspected wrongdoing by suppliers and PSPC employees, and a series of tools and resources for addressing workplace issues.

This report marks our first effort to bring together and communicate our strategies and actions in preventing, detecting, and responding to suspected misconduct and wrongdoing. It highlights a number of actions we have taken to strengthen integrity and accountability within the procurement system, underscoring our dedication to transparency and signalling our commitment to continuous improvement.

We recognize that despite our efforts, the risk of misconduct will always be present across our business lines. However, we remain committed to ensuring the integrity of the Government of Canada's procurement and real property systems, as well as the PSPC workforce.

As this report makes clear, work is already underway to modernize and transform how we prevent, detect, and respond to wrongdoing. With each report that follows, we will improve our ability to analyze and document the types of misconduct and wrongdoing that occur, and begin to identify warning signs, trends, and underlying causes. This will enable us to focus our efforts and refine our approach.

Thank you to all who support PSPC's efforts to protect our operations, reinforce public confidence and contribute to a resilient and accountable organization.

Arianne Reza
Deputy Minister

Alex Benay
Associate Deputy Minister

Michael Mills
Associate Deputy Minister

Executive summary

Public Services and Procurement Canada's (PSPC) first annual Report on Misconduct and Wrongdoing is intended to increase awareness and transparency surrounding PSPC's tools to prevent, detect and respond to supplier and employee misconduct and wrongdoing. It provides an overview of measures taken in fiscal year 2024 to 2025 and includes information about the programs available for reporting misconduct and wrongdoing.

Measures highlighted in the report include:

This first annual report provides a benchmark for future years and demonstrates PSPC's ongoing commitment to addressing misconduct and wrongdoing within the department and among suppliers to the federal government.

Introduction

PSPC is committed to strengthening the integrity and oversight of the Government of Canada's procurement and real property processes, as well as upholding a culture of personal and professional integrity and ethical behaviour in all its business practices.

By publishing PSPC's first annual report on Addressing Misconduct and Wrongdoing, the Department aims to:

Departmental context

PSPC plays an important role in the daily operations of the Government of Canada. It supports federal departments and agencies in achieving their mandated objectives. Its mission is to deliver high-quality, central programs and services that ensure sound stewardship on behalf of Canadians and meet the program needs of federal institutions.

With more than 19,400 employees across the country, and offices located in communities from coast to coast to coast, PSPC manages an annual gross budget of approximately $11.5 billion as per the 2025-to-2026 Departmental Plan. PSPC operations are vast, given its role as:

PSPC's Departmental Oversight Branch (DOB) and Human Resources Branch (HRB) each play a role in upholding the integrity of the department's operations. DOB provides services that ensure departmental operations are secure, fair, and transparent. Its responsibilities include overseeing security and emergency management and investigating and responding to both supplier and employee misconduct. HRB supports the department and employees with essential services, policies, and programs to foster a supportive and dynamic workplace, including measures pertaining to workplace well-being, values and ethics, and the prevention of conflict, harassment, and violence. The 2 branches work closely together to investigate and respond to employee wrongdoing.

Defining misconduct and wrongdoing

Misconduct is defined as any action whereby an individual willfully contravenes, an act, a regulation, a rule, a departmental or Treasury Board policy instrument, an approved procedure, a departmental code of conduct, a reasonable and lawful management request, and/or the Values and Ethics Code for the Public Service. In short, when an employee contravenes any of the obligations they agree to abide by when becoming an employee of the Department.

Wrongdoing, as defined in the Public Servants Disclosure Protection Act may include:

Preventing, detecting and deterring misconduct and wrongdoing

While the risk of misconduct and wrongdoing exists in all organizations, PSPC's mandate and large workforce creates risks for the department. PSPC's operations are both critical and complex. The department's responsibilities demand vigilance, safeguards, and a culture of integrity to protect public funds and uphold the trust placed in us by Canadians, stakeholders, and client departments. The department also seeks to reassure its employees that cases of misconduct and wrongdoing are addressed appropriately and with due diligence.

PSPC has adopted a comprehensive and proactive approach to prevention, detection and deterrence both internal to the department and as it relates to the supplier community.

The department has a number of instruments, tools, policies, and programs in place to support PSPC's efforts to prevent, detect, and respond to misconduct and wrongdoing. PSPC employees, executives and suppliers to the Government of Canada all play a key role in prevention, detection and deterrence. Employees are expected to contribute to and uphold a healthy, respectful, and safe workplace, free from harassment and discrimination, by adhering to the Values and Ethics Code for the Public Sector and the department's Code of Conduct, both of which outline expectations for professional behaviour. Suppliers are held to similarly high ethical standards as set out in the Code of Conduct for Procurement and specific integrity provisions that are incorporated into contracts and real property agreements.

This report begins by providing information on how misconduct and wrongdoing can be reported. The report then highlights some of PSPC's key prevention, detection and deterrence initiatives, along with results and achievements from fiscal year 2024 to 2025.

How to report potential wrongdoing

There are a number of channels available internally and externally to PSPC to report suspected misconduct and wrongdoing.

Internal disclosures of wrongdoing

PSPC employees can make an internal disclosure of wrongdoing, as defined by the Public Servants Disclosure Protection Act (PSDPA) by:

The PSDPA includes provisions to protect the identify of disclosers and also includes protections from reprisals. While anonymous disclosures are possible, PSPC employees are encouraged to provide their contact information to ensure a thorough assessment of the disclosure.

Reporting suspected fraud in federal government contracts

Government of Canada employees, suppliers, and members of the public may flag suspicious activity in federal contracting either on a named or anonymous basis via the Federal Contracting Fraud Tip Line. Examples of suspicious activity include, but are not limited to, suspected bid-rigging, price fixing, inflated invoices, time theft, supplying inferior products, bribery, kickback schemes and conflicts of interest.

Tips can be submitted anonymously online or by calling 1-844-365-1616.

When officials within PSPC, or in another federal department or agency, identify wrongdoing in the context of a procurement process and/or with respect to a supplier, they may refer cases of founded misconduct to the Office of Supplier Integrity and Compliance via email at tpsgc.o.integrite-integrity.o.pwgsc@tpsgc-pwgsc.gc.ca or by contacting the Office of Supplier Integrity and Compliance. OSIC will assess the conduct to determine whether action under the Ineligibility and Suspension Policy is warranted.

Contracting Officers are required to notify PSPC's Legal Services and their immediate supervisor whenever there is an indication of possible bid-rigging activities, collusion or fraud in the context of a procurement or real property agreement. PSPC's Legal Services Unit works closely with the Competition Bureau Canada, an independent federal law enforcement agency responsible for investigating allegations of bid-rigging and collusion under the Competition Act. Allegations of fraud are referred to the Royal Canadian Mounted Police for investigation under the Criminal Code.

Security incidents or breaches

PSPC employees are required to identify and report suspected security incidents and breaches in the context of their work. Examples include, but are not limited to:

It is important to note that wrongdoing such as losses of public money and property are reported in Public Accounts of Canada.

Employees may report security incidents or breaches in the following ways:

Addressing workplace issues

PSPC promotes both formal and informal safe spaces for addressing workplace issues and ensuring access to recourse mechanisms. Through its Centre of Expertise on the Prevention of Conflict, Harassment and Violence, the department provides employees with confidential consultations, tools, and training to support prevention and early resolution, and to promote a healthy workplace. The Centre includes 2 key programs:

Addressing supplier wrongdoing and misconduct

Administering the revised Ineligibility and Suspension Policy

On May 31, 2024, PSPC announced the launch of the Office of Supplier Integrity and Compliance to replace and build on the department's former Integrity Regime. One of OSIC's responsibilities is administering a revised and expanded version of the Ineligibility and Suspension Policy (the Policy), which came into force on the same day as OSIC.

The Policy sets out when and how a supplier may be declared ineligible or suspended from doing business with the Government of Canada. Decision-making under the Policy has been delegated from the Minister of Government Transformation, Public Works and Procurement to the Registrar of Ineligibility and Suspension, an Assistant Deputy Minister-level position.

While the Policy is administered centrally by OSIC, its application across the Government of Canada is governed by memoranda of understanding (MOUs) with other federal entities. All departments and agencies are required to apply the Policy and some other entities, such as Crown corporations, have voluntarily adopted it. OSIC has MOUs in place with 86 departments and 3 Crown corporations.

These federal entities incorporate the Policy by reference into each applicable procurement and verify the status of their prospective suppliers under the Policy by submitting integrity verification requests to OSIC prior to each applicable contract or real property agreement award.

The revised Ineligibility and Suspension Policy that came into force in May 2024 entailed a number of important enhancements, including:

Given the expanded scope of the new Policy, throughout 2024 to 2025, OSIC undertook outreach and engagement with other government departments, procurement professionals, and the supplier community to raise awareness and ensure understanding of new requirements.

In addition, in 2024 to 2025 OSIC achieved the following results:

Fraud risk management and analytics for detection

Fraud is a serious risk in PSPC's line of work. As such, the Department has dedicated resources to prevent, detect, and respond to it. PSPC has adopted a comprehensive, framework-based approach to fraud risk management—one that ensures coordination across the organization and aligns with recognized best practices. Such an approach enables consistency, strengthens accountability, and supports an effective and integrated response to fraud risks.

PSPC's Fraud Risk Management Framework is constructed around 6 interconnected core components:

The components consist of various fraud prevention, detection and response activities. The framework serves as a foundational governance instrument that facilitates the identification of strategic integration opportunities and establishes a foundation for continuous organizational maturation and advancement.

The diverse anti-fraud activities under the 6 components are centrally managed and coordinated by PSPC's Anti-fraud Hub (the Hub). The Hub ensures these components work together efficiently—avoiding duplication of efforts—and effectively, by identifying and addressing any gaps in coverage. This integrated approach supports a streamlined and comprehensive defence against fraud.

A key component of the Fraud Risk Management Framework is the fraud detection analytics function. PSPC is developing and deploying fraud detection analytics aimed at uncovering previously undetected or unreported instances of internal and external fraud or misconduct. A commitment to refining and expanding the use of these tools to detect fraudulent schemes and other types of wrongdoing was made with the launch of OSIC in 2024.

By utilizing data analytics and artificial intelligence, PSPC has access to actionable intelligence on vendors, corporate ownership structures, and awarded government contracts, supporting evidence-based decision-making and enhancing fraud detection and prevention across the department.

In 2024 to 2025 the following results were achieved in relation to fraud risk management and analytics for detection:

In addition to providing ongoing intelligence regarding vendor contracting, fraud analytics developed processes focused on detecting internal payroll schemes.

Investigating and responding to supplier misconduct and wrongdoing

When alleged fraud and other types of misconduct and wrongdoing are detected, PSPC's Special Investigation and Internal Disclosure Directorate has the capacity to investigate further and take action to safeguard the integrity of the federal procurement system.

With respect to supplier wrongdoing, the work of the SIID Directorate ranges from looking into suspected breaches of the Code of Conduct for Procurement, to investigating suppliers and public servants suspected of attempting to defraud taxpayers in Government of Canada contracts.

For all investigations, the SIID Directorate first conducts a preliminary investigation into the allegations. After this, a file may be either closed as unfounded, transferred to another body for further action, or moved into what is known as the full investigation stage.

Spotlight on overbilling schemes and recovery efforts

In 2024 to 2025, an area of focus for the SIID Directorate included taking action in response to allegations that the Government of Canada is being overbilled or defrauded in either a specific contract or on a broader scale. Several cases were detected involving subcontractors working concurrently for multiple prime contractors and billing for hours that could not possibly be worked.

As the capacity to detect such issues has improved, the Department recognized the parallel need to enhance its response capabilities. To this aim, in 2024 to 2025 a Restitution Unit was established that is responsible for recovering funds from identified overbilling schemes. As overbilling is a government-wide vulnerability, the Unit is playing a centralized role and supporting impacted departments and agencies across the Government of Canada.

In 2024 to 2025 the following results were achieved in investigating and responding to overbilling schemes:

Addressing employee wrongdoing and misconduct

In addition to administering a comprehensive set of measures to prevent, detect and respond to misconduct and wrongdoing in the context of procurement and real property agreements, PSPC takes a similar approach to employee misconduct and addressing complex workplace issues.

PSPC employees are expected to operate with personal and professional integrity and maintain ethical behaviour in all business practices. By upholding values of integrity, respect, stewardship, excellence and leadership, employees foster a positive workplace and demonstrate to client departments and Canadians that they are worthy of their confidence.

The Values and Ethics Code for the Public Sector and the PSPC Code of Conduct provide all employees with guidance on expected behaviours and appropriate conduct in the performance of their duties. These codes support sound decision-making and ethical behaviour in situations related to PSPC's mandate, vision, values, and specific responsibilities. The departmental Code of Conduct is important given PSPC's role in areas such as procurement, real property, and other business lines. Its emphasis on upholding core values and addressing real, apparent, or potential conflicts of interest (COI), is critical to maintaining public trust and the integrity of the department's activities.

In 2024 to 2025, PSPC undertook a review of its Code of Conduct and carried out internal consultations. The resulting updated Code places an emphasis on employee accountability, underscoring the expectation that employees uphold respectful conduct at all times and actively oppose all forms of racism, including anti-Black and anti-Indigenous racism, and ableism in their interactions with colleagues, clients, and peers.

The updated Code outlines consequences for violations and protections against retaliation. It also clarifies leaders' responsibilities in modeling ethical behavior and reinforces everyone's duty to identify, prevent, report and resolve COI. Additionally, it addresses ethical considerations in social media and artificial intelligence use and incorporates commitments to anti-racism and inclusion.

Labour relations procedures and mechanisms

To foster an effective and healthy workplace culture, it is essential that the employer addresses any observed or reported misconduct in a fair and timely manner. Incidents of alleged misconduct may come to management's attention by direct observation or from various sources including reports from other employees, managers, or members of the public. At PSPC, those in management roles are expected to respond to observed or reported incidents in a timely and sensitive manner, consulting with their respective labour relations advisors for advice and support at the earliest indication that misconduct may have occurred. PSPC's labour relations advisors are equipped to support management throughout an investigation into potential misconduct, ensuring that relevant policy instruments and collective agreements or terms and conditions are respected.

PSPC applies the general guidance provided by the Treasury Board of Canada Secretariat (TBS) for investigations into misconduct and disciplinary measures, as outlined in the Guidelines for Discipline. While respecting general principles common to all cases, the specific steps of the process required for each disciplinary investigation will vary depending on the nature and seriousness of the alleged misconduct. In all cases, investigations must follow common principles of procedural fairness and natural justice.

Under the departmental Investigation Management Framework between DOB and HRB, cases involving issues such as security breaches, significant fraud, theft, conflict of interest, or illegal activities are initially investigated by DOB. HRB's Corporate Staffing Oversight may also be involved when allegations relate to staffing policy or the Public Service Employment Act. In cases of harassment or violence, investigations may be coordinated separately by the Centre of Expertise on the Prevention of Conflict, Harassment and Violence.

Once an investigation is completed, a report is provided to management to determine any disciplinary measures, in line with the departmental Human Resources Delegation. If misconduct is confirmed, appropriate disciplinary action is taken based on mitigating and aggravating factors. These measures aim to correct behaviour and may include reprimands, suspension without pay, financial penalties, demotion, or termination. Employees may grieve any disciplinary action, but only severe measures (suspension, financial penalty, demotion, or termination) are subject to adjudication by the Federal Public Service Labour Relations and Employment Board.

Overview of disciplinary measures

For the purpose of this report, employee misconduct and wrongdoing cases resulting in disciplinary measures have been organized into the following categories to provide clarity on the nature of founded cases within PSPC resulting in disciplinary measures:

During the 2024-to-2025 fiscal year

A disciplinary demotion is another form of disciplinary measure which can be considered; no measures of this type were administered in any cases during the 2024-to-2025 fiscal year.

Results by category of misconduct and wrongdoing are as follows.

Administrative misconduct

Administrative misconduct includes misconduct related to unauthorized absences, lateness, fraudulent submission of leave or overtime, time theft, and misuse of employer time. This category also includes insubordination, which typically involves a refusal to follow clear direction from a management authority and may also encompass incidents of disrespect towards management's authority that are disruptive in the workplace.

During fiscal year 2024 to 2025, there were a total of 42 founded cases related to administrative misconduct, resulting in:

Breach of values and ethics

PSPC's Departmental Code of Conduct sets out standards for employee behaviours in keeping with the Values and Ethics Code for the Public Sector and the department's values and people management philosophy. Misconduct in this category encompasses behaviours which violate the employer's values and ethics including established standards of conduct and requirements related to conflicts of interest.

During fiscal year 2024 to 2025, there were a total of 34 founded cases related to breaches of the Code, resulting in:

Harassment and violence

Misconduct related to harassment and violence in the workplace includes any action, conduct or comment, including of a sexual nature, that can reasonably be expected to cause offence, humiliation or other physical or psychological injury of illness to an employee, including any prescribed action, conduct or comment.

Under the Harassment and Violence Prevention regulations, investigations focus on preventing recurrence in the workplace and do not lead to individual administrative or disciplinary measures. However, the delegated manager, in consultation with Labour Relations, can initiate a separate process to determine if administrative and/or disciplinary measures are warranted, which may require a separate investigation.

Since the new regulations came into force in 2021, a significant number of complaints were resolved informally at PSPC. Of all the harassment cases closed in 2024 to 2025, 78% were resolved using negotiated resolution, conciliation, or other forms of informal resolution mechanisms.

During fiscal year 2024 to 2025, 4 cases handled by Labour Relations related to harassment and violence were founded, resulting in:

During fiscal year 2024 to 2025, under the Harassment and Violence Prevention regulation, the Centre of Expertise on the Prevention of Conflict, Harassment and Violence handled 126 cases in relation to occurrences and complaints related to harassment and violence, including:

1 founded case met the definition of harassment.

Fraud and theft

Incidents of employees committing fraud and theft include actions or omissions which deceive other parties or misrepresent information to inappropriately obtain personal or financial benefit or to cause harm to the organization.

During fiscal year 2024 to 2025, 3 founded cases were handled in relation to investigating and responding to employee fraud and theft, resulting in:

Misuse of employer networks and property

This category of misconduct includes failure to adhere to PSPC or Government of Canada policies, procedures, and employer direction regarding the appropriate and acceptable use of employer electronic networks, intellectual property and any physical assets.

During fiscal year 2024 to 2025, 1 founded case was handled in relation to investigating and responding to misuse of employer networks and property, resulting in 1 written reprimand.

Conflict of interest

Real, apparent or potential conflicts of interest (COI) are an area of focus at PSPC. In accordance with the department's Code of Conduct, employees are required to declare all outside employment, business ownership, and any situation where there may be a real, apparent or potential conflicts of interest between their official duties and any of the following:

In 2024 to 2025 the following results were achieved in relation to COI:

Public Servants Disclosure Protection Act disclosures

Under the Public Servants Disclosure Protection Act (PSDPA), federal public sector employees are encouraged to come forward if they have reason to believe that a wrongdoing in the workplace has taken place or is about to take place. The PSDPA protects against reprisals and provides a fair and objective process for those against whom allegations of wrongdoing are made.

PSPC's Special Investigations and Internal Disclosure Directorate receives and manages protected internal disclosures of allegations of wrongdoing as defined in the PSDPA. Once a disclosure is received, the SIID Directorate will:

In 2024 to 2025 the following results were achieved in relation to PSDPA disclosures:

Security screening investigations

Review for Cause (RFC) investigations are conducted under PSPC's Chief Security Officer when information may call into question an employee's reliability and/or loyalty to Canada. This may result in the suspension or revocation of the employee's security status or clearance previously granted. RFCs are conducted according to the Treasury Board Directive on Security Screening and the Policy on Government Security.

In 2024 to 2025, a total of 16 cases were investigated. 9 RFC investigations were deemed to be founded and led to revocations of Reliability Status and, as a result, termination of employment as this status is a condition of employment for all federal public service positions. Specifically:

External investigations

Canadian Human Rights Commission

Under the Canadian Human Rights Act (CHRA), anyone in Canada has the right to file a complaint if they believe they have experienced discrimination in a matter under federal jurisdiction. This includes complaints involving federally regulated employers such as federal government departments, crown corporations and agencies. Discrimination is an action, behaviour, decision, or omission that treats a person or group of people unfairly and badly for reasons linked to prohibited grounds which are protected under the CHRA.

The Canadian Human Rights Commission (CHRC) receives and reviews these discrimination complaints and determines whether a complaint will be sent to the Canadian Human Rights Tribunal (CHRT) to determine if there has been discrimination. Further information is available on the CHRC website.

Within PSPC, the Corporate Labour Relations team in the Human Resources Branch is responsible for coordinating the response to any CHRC complaints received against the department. During fiscal year 2024 to 2025, 2 new CHRC complaints were received against PSPC. 1 case which was carried over from a previous year reached a settlement prior to a CHRT decision during the 2024-to-2025 fiscal year. No decisions from the CHRT related to PSPC were issued during the year.

Occupational health and safety

To ensure employee's health and safety, all workplace incidents or accidents must be documented in the Hazardous Occurrence Investigation Report, where the root cause is identified and recommendations are made to prevent recurrence. Employment and Social Development Canada (ESDC) acts as the policing body for health and safety and their investigations can be initiated under 3 circumstances:

In these circumstances, ESDC can:

In 2024 to 2025, 2 complaints or allegations were received, 2 investigations initiated, and the 2 founded cases resulted in disciplinary or administrative measures.

The following corrective measures were implemented:

Corrective measures (technical, physical and behavioural) were implemented and approved by the Health and Safety Officer. Services resumed following a 1-week interruption. This act of founded wrongdoing was published as per paragraph 145(2)(a), 145(2)(b) and 145(3) of the Canada Labour Code, Part II.

Public Service Commission

As part of its mandate to oversee the integrity of the staffing system of the federal public service, the Public Service Commission (PSC) investigates concerns relating to specific appointment processes for organizations subject to the Public Service Employment Act.

The Public Service Commission may investigate:

Following founded investigations, any corrective action deemed appropriate may be ordered to address irregularities or prevent their recurrence, including the revocation of an appointment.

In fiscal year 2024 to 2025, PSPC had 28 investigations in progress:

Of these 28 investigations, 10 investigations were closed, 2 were founded, and 8 were discontinued by the PSC during the investigation. 18 investigations remain ongoing.

Conclusion

Looking ahead, PSPC is committed to improving its efforts to prevent, detect and respond to incidents of wrongdoing and misconduct. The Department continuously learns from its experiences in these areas and adjusts its approach to mitigate potential risks wherever and whenever they arise.

With time, the Department's capacity to report on the outcomes of this work will expand and improve. This is true given PSPC's efforts to modernize procurement and transform the way the government does business. With modernization and transformation comes broader access to quality data and the ability to identify and report on trends.

Public servants, as well as suppliers to the Government of Canada, all play a part in strengthening the integrity and oversight of the Government of Canada's procurement and real property processes, as well as upholding a culture of personal and professional integrity and ethical behaviour in all business practices.

Using the many avenues to report suspected misconduct and wrongdoing is foundational to this responsibility.

PSPC will remain unwavering in its efforts to address misconduct and wrongdoing. The successful administration of the department's instruments and measures to manage and mitigate risks will remain a strategic, enterprise-wide priority.

© His Majesty the King in Right of Canada, as represented by the Minister of Public Services and Procurement Canada, 2025

ISSN 2819-4721

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2025-07-10