Taking action against fraud and strengthening financial and procurement management

March 20, 2024 - Gatineau, Quebec - Public Services and Procurement Canada

The Government of Canada is committed to spending Canadians’ tax dollars wisely and responsibly. This includes a commitment to doing businesses with suppliers that meet the expectations of Canadians, and ensuring that the government’s procurement processes are effective and well-managed.

There have been serious questions raised regarding the integrity of the federal procurement system, including the practices of certain suppliers to the Government of Canada. As the Auditor General of Canada and the Procurement Ombud confirmed in their recent reports, there are clear rules in place to ensure sound procurement management practices across government, but more can be done, including with the rules governing the conduct of suppliers to the government.

Today, the Honourable Jean-Yves Duclos, Minister of Public Services and Procurement, and the Honourable Anita Anand, President of the Treasury Board, announced a number of measures the Government of Canada is implementing to strengthen and streamline oversight of federal government management practices, particularly in the area of procurement. 

The Government of Canada is taking action to strengthen the integrity of the procurement process and to help ensure that Canada does not contract with suppliers of concern. This work builds on modernizing government procurement practices so that they are simpler and less administratively burdensome, deploy modern comptrollership, encourage greater competition and include practices that support our economic policy goals, including innovation, and green and social procurement.

As part of this modernization, Public Services and Procurement Canada (PSPC) has been using advanced data analytics that have uncovered a number of instances of suppliers fraudulently billing the Government of Canada. These efforts, along with recent reports by the Auditor General of Canada and the Procurement Ombud, as well as parliamentary committee studies, have revealed a need for action on many fronts to improve the management and integrity of Canada’s procurement processes.

PSPC is moving forward to further strengthen oversight of federal procurement processes with the launch of the new Office of Supplier Integrity and Compliance (OSIC) program. The new Office will enhance PSPC’s capacity to identify and respond to instances of supplier misconduct.

The establishment of OSIC will provide an opportunity to modernize the Government of Canada’s debarment and suspension program and further strengthen its approach to the use of data analytics to identify potential instances of fraud and wrongdoing within federal procurement. This includes ensuring the Government of Canada has the tools to address other concerning conduct, such as empowering the government to debar suppliers convicted of offences like terrorist financing, the use of human trafficking or forced labour, or similar offences recognized in provincial and foreign civil judgments.

The launch of OSIC builds on other recent activities undertaken by PSPC to make immediate improvements to procurement processes and procedures, beginning with professional services contracting, and increasing transparency surrounding contract information. Additionally, PSPC has started using advanced data analytics to ensure the soundness of the procurement system. These activities have proactively uncovered a number of instances of suppliers fraudulently billing the Government of Canada. In response, PSPC has referred these cases to the Royal Canadian Mounted Police and will be working with suppliers and impacted departments to recover fraudulently billed funds.

Furthermore, the Treasury Board of Canada Secretariat (TBS) is taking additional and immediate steps to enhance its oversight of departmental practices and processes and support effective management across government. 

Today, TBS released an update to the Manager’s Guide: Key Considerations When Procuring Professional Services and signaled its intent to embed certain elements of the Guide within TBS Mandatory Procedures to strengthen the accountability of managers.

Additionally, in the coming months, TBS will introduce a new Risk and Compliance Process, which will assess government-wide trends, risks and individual departmental performance in key management areas and take immediate corrective actions where necessary.

Lastly, to ensure that public servants maintain the trust of Canadians, TBS will review the Directive on Conflict of Interest to ensure that the requirements are clear and effective, particularly as they relate to employees who engage in outside employment, including contracts with the Government of Canada. TBS will also review guidance provided to deputy heads and explore additional oversight that will include strengthening the consequences of non-compliance with the Directive.

Going forward, PSPC and TBS will continue to accelerate the Government of Canada’s procurement modernization efforts and introduce new initiatives to strengthen procurement and management practices.

The Government of Canada is unwavering in its stance against unethical and illegal business practices and for the prudent use of tax dollars. Instances of fraud and misconduct will be thoroughly investigated, and appropriate action will be taken to hold bad actors accountable.