Comptroller General of Canada appearance before the Standing Committee on Government Operations and Estimates (OGGO) – Federal Government Consulting Contracts Awarded to McKinsey & Company – September 2024

Appearance of the Assistant Comptroller General on the Purchase of a New York Apartment (August 20, 2024)

Appearance of the Auditor General on McKinsey & Company (June 10, 2024)

Appearance of TBS officials on Main Estimates 2024–25 (June 3, 2024)

Chair

Kelly McCauley (Edmonton West, AB)
Conservative

• Elected in 2015 as the Member of Parliament for Edmonton West.
• Former Conservative Shadow Minister for Treasury Board.
• Also serves on the Subcommittee on Agenda and Procure of OGGO.
• Previously served on the Standing Committee on Public Accounts.
• Before his election in 2015, Mr. McCauley was a hospitality executive specialized in managing hotels and convention centres.
• He has a graduate of BCIT in the Hospitality Management program.
• Interest in the TBS portfolio: Pushes for a reform in the PSDPA to protect whistleblowers; has been one of the most critical MP regarding the state of the ATIP system; has expressed repeated concerns about the late tabling of the Public Accounts.

1st Vice-chair

Majid Jowhari (Richmond Hill, ON)
Liberal

• Elected in 2015 as the Member of Parliament for Richmond Hill.
• Also serves on the Subcommittee on Agenda and Procedure of OGGO as well as the Standing Committee on Health.
• Previously served on the Standing Committee of Industry, Science and Technology as well as the COVID-19 Pandemic committee.
• Born in Iran, he is the first federal MP of Iranian heritage.
• He has a degree in industrial engineering from Ryerson University and an MBA from York University’s Schulich School of Business.
• Before his election in 2015, Mr. Jowhari was a consultant and engineer.
• Interest in the TBS portfolio: Has expressed interest in the Refocusing Government Spending initiative and in compliance with TBS guidelines as it pertains to procurement and management of real property.

2nd Vice-chair

Julie Vignola (Beauport–Limoilou, QC)
Bloc Québécois

• Elected in 2019 as the Member for Parliament for Beauport–Limoilou.
• Bloc Québécois Critic for Public Services, Tourism, Government Operations & Procurement.
• Also serves on the Subcommittee on Agenda and Procedure of OGGO.
• Previously a member of the COVID-19 Pandemic committee.
• Before her election in 2019, she was a teacher in a private high school.
• Ms. Vignola has a bachelor’s degree in history and geography teaching from the Université du Québec à Rimouski.
• Interest in the TBS portfolio: Believes Bill C-290 should be adopted; believes outsourcing should be cut drastically and that the reliance on private consultants is undermining the expertise of the public service; has been critical over shortcomings in the procurement process as it relates to McKinsey, as well as their lack of respect of official languages.

Garnett Genuis (Sherwood Park–Fort Saskatchewan, AB)
Conservative

• Elected in 2015 as the Member of Parliament for Sherwood Park–Fort Saskatchewan.
• Shadow Minister for International Development.
• Previously served on many committees, including Public Accounts.
• Attended Carleton University, where he obtained a bachelor’s degree in public affairs and policy management, and the London School of Economics, where he obtained a master’s degree in public policy.
• Prior to his election, he was a political correspondent, assistant to prime minister Stephen Harper and adviser to Rona Ambrose.
• Interest in the TBS portfolio: His main focus in recent studies has been to identify ministerial accountability in the procurement process; often focuses on the relationships between contractors and the government.

Kelly Block (Carlton Trail–Eagle Creek, SK)
Conservative

• Elected in 2008 as the Member of Parliament for Carlton Trail–Eagle Creek.
• Also sits on the Subcommittee on Agenda and Procedure for OGGO.
• Shadow Minister for Public Services and Procurement.
• Previously served as Parliamentary Secretary to the Minister of Natural Resources and Member of Panel of Chairs during the 41st Parliament.
• Previously sat on many committees, including Public Accounts.
• Prior to her election, Ms. Block served 2 terms as mayor of Waldheim, SK.
• Interest in the TBS portfolio: Expressed repeated concern over a perceived lack of oversight across departments and a lack of enforcement of the Financial Administration Act.

Stephanie Kusie (Calgary Midnapore, AB)
Conservative

• Elected in 2017 as the Member of Parliament for Calgary Midnapore.
• Conservative Shadow Minister for Treasury Board.
• Also sits on the Standing Committee on Official Languages.
• Has a bachelor’s in political science from the University of Calgary and a master’s in business administration from Rutgers University.
• Prior to her election, Ms. Kusie occupied multiple positions, including chargé d’affaires ad interim for Canada to El Salvador, consul for Canada to Dallas, Texas and senior policy advisor to Peter Kent in Latin America.
• Some of her duties before her time in office included negotiating free trade deals, work related to the Keystone Pipeline project, and lobbying the United Nations to place Canada on the Security Council.
• Interest in the TBS portfolio: Believes TBS lacks accountability and transparency; has recently been seized with issues of dual employment and conflict of interests in the public service; has been critical of the timing and methodologies of the Estimates process.

Taylor Bachrach (Skeena–Bulkley Valley, BC)
New Democratic Party

• Elected in 2019 as the Member of Parliament for Skeena–Bulkley Valley.
• NDP’s Transport Critic, as well as Deputy Critic for Infrastructure and Communities and Fisheries, Oceans and the Canadian Coast Guard.
• Before his election, Mr. Bachrach was first a municipal councillor in the Village of Telkwa and then was mayor of the Town of Smithers from 2011 to 2019.
• Interest in the TBS portfolio: Believes the government should invest more in the public service while cutting down outsourcing drastically; has expressed concerns over the return to office mandate in the public service and the facts that unions were not consulted.

Parm Bains (Stevenston–Richmond East, BC)
Liberal

• Elected in 2021 as the MP for Stevenston–Richmond East.
• Also serves on the Standing Committee on Access to Information, Privacy and Ethics.
• Prior to his election, Mr. Bains was an instructor at Kwantlen Polytechnic University. He also worked as a media and public relations officer with the British Columbia provincial government.
• He has attended the British Columbia Institute of Technology as well as the Royal Roads University, where he got a master’s degree.
• Interest in the TBS portfolio: Often speaks about the importance of protecting cyber security and service digitalization; showed interests in making the public service more efficient and more accountable as it pertains to the procurement process.

Jenica Atwin (Fredericton, NB)
Liberal
Parliamentary Secretary to the Minister of Indigenous Services

• Elected in 2019 as the Member of Parliament for Fredericton representing the Green Party and re-elected in 2021 representing the Liberal Party.
• Also serves on the Standing Joint Committee on the Library of Parliament.
• She completed a master’s in education at the University of New Brunswick.
• Has personal ties to the Indigenous community.
• Interest in the TBS portfolio: Has expressed repeated concerns regarding systemic racism and issues of discrimination within the public service.

Irek Kusmierczyk (Windsor–Tecumseh, ON)
Liberal
Parliamentary Secretary to the Minister of Employment, Workforce Development and Official Languages

• Elected in 2019 as the Member of Parliament for Windsor–Tecumseh Ontario.
• Born in Poland, he immigrated to Canada in 1983 after his father was imprisoned for being a member of a movement opposed to communism.
• Before his election, was a city councillor for the Windsor City Council.
• Bachelor’s in journalism from Carleton University, MSc in government from the London School of Economics and PhD in political science from Vanderbilt University.
• Interest in the TBS portfolio: Has shown interest in Greening Government initiatives; often asks questions regarding compliance with TBS policies in the procurement process.

Charles Sousa (Mississauga–Lakeshore, ON)
Liberal
Parliamentary Secretary to the Minister of Public Services and Procurement

• Elected in 2022 as the Member of Parliament for Mississauga–Lakeshore.
• Before his election he joined the provincial cabinet as the minister of labour in 2010 and became Ontario’s minister of citizenship and immigration in 2011. Also was the Minister of Finance for Ontario from 2013 to 2018.
• Graduated from Wilfrid Laurier University in 1982 with a degree in business administration.
• Interest in the TBS portfolio: Asked several questions on what public servants can do to ensure that best practices are applied in the procurement system, including implementing more training.

Internal controls / procurement practices

Amended the Procurement Directive to require Senior Designated Officers (SDO) for procurement to have a risk-based system of internal controls that are maintained, monitored and reviewed to provide reasonable assurance that procurement transactions are carried out in accordance with the departmental procurement management framework and applicable laws, regulations and policies.

Updated Guide to Internal Control Over Financial Management to strengthen key internal control frameworks by enhancing the regular review and testing of procurement controls as part of departments’ overall financial controls.

Documentation

Amended the Procurement Directive to clarify documentation requirements for contracts. These amendments reinforce departmental contracting authorities’ responsibility to create and maintain accurate and comprehensive procurement records applicable to the contracting file to facilitate management oversight and auditing and demonstrate that procurements are being conducted fairly, openly and transparently.

This responsibility includes maintaining a copy of the duly executed contract on file, as well as documentation on the rationale for selecting a non-competitive procurement strategy, as required.

As of May 2024 this also includes the responsibility for documenting the name and title of the individual assigned to the role of business owner.

Transparency

Amended the Procurement Directive to require SDOs to establish risk-based internal controls that ensure the accuracy, completeness and timely proactive publication of contracting information.

Updated the Guide to the Proactive Publication of Contracts to support greater transparency in large professional services contracts greater than $1 million by requiring departments to provide additional details in contract descriptions.

In March 2024, the Comptroller General directed all departments to review the completeness and accuracy of their proactive publications of contracts by June 7, 2024, which resulted in the correction of ~25,000 records. 

Conflict of interest

Amended the Procurement Directive to reinforce responsibilities for adhering to the Values and Ethics Code for the Public Sector and the Directive on Conflict of Interest at all times during the procurement process including but not limited to when engaging with suppliers, evaluating bids, and awarding and managing contracts.

The amendments also placed responsibility on contracting authorities to be preventing and identifying conflict of interest that may exist and taking appropriate mitigating action as required.

New mandatory procedures further require business owners (managers) to certify that they are not in a conflict of interest prior to the contract award.

Visibility on Contractors

Amended the Procurement Directive to require a report to deputy heads twice a year on the total number of per diem–based professional service resources and the number of resources that have been on contract with the department for a period greater than two years.

1. What was the Office of the Comptroller General’s role in the departmental internal audit of McKinsey contracts?

The role of the Office of the Comptroller General (OCG) was to support the internal audit community in carrying out the internal audit engagements in each of the 10 departments. It was not responsible for conducting the internal audit engagements.

The purpose of this work was to ensure a timely and consistent approach across the 10 departments and to enable the overarching goal of the TBS review to identify areas where policy may need to be enhanced and clarified.

If pressed on the role of OCG-IAS:

As the functional leader for the internal audit community, the OCG:

• provided common baseline audit plans, audit programs and reporting templates to departments
• supported departments in carrying out their work
• monitored progress
• received departmental responses
• prepared the package to transmit this information to OGGO

The OCG leveraged these audits in TBS’s review of contracts awarded to McKinsey to inform measures to strengthen potential policy areas or procurement practices, which were detailed in the final report that the President of the Treasury Board provided in June 2023. 

2. Why was a decentralized approach to conducting the departmental audits taken?

The OCG at TBS works to ensure that sound policies and practices are in place government-wide. As the functional leader for the internal audit community, the OCG developed and issued standard tools and templates, outlining the objectives, scope and criteria that should be covered at a minimum for the internal audit of McKinsey contracts, to ensure a timely and consistent approach across departments.

The OCG’s mandate allows for the conduct of horizontal internal audit engagements that address horizontal, thematic and sectorial risks. However, for this review, it was determined that a decentralized approach to carrying out the work had key advantages to ensure a timely yet consistent approach across departments, considering that departmental resources are more familiar with the operations and that specific departmental controls and information were needed quickly to inform the broader TBS review of McKinsey contracts. This approach also enabled departmental management action plans to be developed and implementation to begin in the meantime.

Conversely, for the Horizontal Audit on Procurement Governance, the OCG is taking the lead. Examining governance without duplicating past audit work may provide additional insight into the issues identified through the audits and discussed during numerous parliamentary committee meetings surrounding procurement. It is meant to be complimentary of the work already completed.

A horizontal audit will mean consistency in scope – in essence, it will test the same things, in the same way, across multiple departments and will report on cross-cutting issues with associated recommendations. It takes longer to undertake an exercise like this; results are expected in December 2024.

3. Why are there differences in the results between departmental audits, the OAG and Procurement Ombudsman who did similar work?

The internal audits were requested as input to the broader TBS Review of Federal Government Contracts with McKinsey. In essence, it was known that the work conducted by the Office of the Procurement Ombud (OPO) and OAG would take some time to complete, so the Prime Minister requested the TBS review as concerns were being raised as a proactive approach to identifying whether policies changes should be made.

I am not in a position to explain the differences on particular contracts; departments would have a more comprehensive view of any differences. However, in general, differences in audit conclusions can happen for several reasons. Considering differences in mandates and the timelines that frame decisions in planning the work in each organization, it is reasonable that the objectives, scope and depth of testing were also different. For example, as the Auditor General stated, her report is the first time Crown corporations were included in the scope.

Having said that, departments were able to develop and start implementing management action plans to address audit recommendations in their organization. I am happy that this was considered by the Auditor General in limiting her report to one recommendation. Further, as planned, departments have already or will add to their management action plans to address the additional recommendations are made by OPO and the OAG.

If pressed: The objectives, scope and criteria guide auditors in their work in reaching their conclusions. Specific audit tests are designed to enable reaching these conclusions. As such, it could be that different conclusions are reached due to the nature or depth of testing, or the extent of information that was considered at the time the work was conducted.

For reference OAG vs. departmental audits: The scope of the OAG audit and that of the departmental internal audits were generally aligned as it relates to compliance. The OAG report notes that the departmental audits did not assess value for money. The following key differences in scope and approach were noted:

4. Considering the results, are there plans to do other audits on procurement in the government of Canada?

5. Does this issue point to a gap in Treasury Board procurement rules and requirements, and will you consider putting additional controls in place?

• The Auditor General was clear that there are rules in place to ensure sound procurement and management practices across government. She found a lack of compliance, not an issue with the rules. She has noted several times that additional rules are not needed and would render federal procurement overly complicated.
• Legislation, including the Financial Administration Act along with Treasury Board policies and their accompanying frameworks, establish clear requirements, which are the responsibility of deputy heads, for the administration of government, including those related to financial management and procurement.
• As part of its regular business, TBS continually reviews Treasury Board policies to seek opportunities for enhancement and to ensure that organizations have the appropriate guidance to support their internal controls.

6. The OAG had one recommendation on conflict of interest; what are you doing?

• We agreed with the AG’s recommendation and as highlighted in our response, in exercising all duties, public servants, as a term and condition of employment, are required to uphold the Values and Ethics Code for the Public Sector and adhere to the Directive on the Conflict of Interest.
• Building on this, as committed on March 20, 2024, and reiterated in Budget 2024, the Directive on the Management of Procurement has been amended to strengthen the management and oversight of government procurement with new mandatory procedures when contracting professional services.
• These new mandatory procedures will include a proactive process requiring business owners (managers) to certify that they acknowledge their responsibilities in managing the contract, that they do not have a conflict of interest, that they have not directed which resources should be working under the contract, and that the contractor did not assist in or have unfair access to the solicitation process.
• The procedures provide an additional check and balance for public service managers to ensure that they are clear about their responsibilities and accountabilities when undertaking professional services procurement activities related to oversight, conflict of interest, and values and ethics.
• All federal organizations subject to the Treasury Board Directive on the Management of Procurement will need to comply with this new procedure by no later than September 30, 2024.
• We have been engaging with departments and providing guidance to support them in meeting this deadline.
• Together, these actions strengthen existing measures in place to ensure that those involved in a procurement process do not have conflicts of interest.

7. PSPC said it was not a requirement to have individual sole source justification for each call-up against the National Master Standing Offer – is that true?

• A standing offer is an offer from a potential supplier to provide goods and/or services at pre-arranged prices, under set terms and conditions, when and if required.
• The standing offer itself is not a contract. The call-up against the standing offer is. 
• Treasury Board policy requires that there be justification for non-competitive contracting, and that it be documented. This includes whether the contract was below a certain dollar threshold or whether a Government Contracts Regulation sole source exception was applied.
• On this basis, even if a supply tool, such as the National Master Standing Offer, is set up using a limited tendering justification, an individual justification would nonetheless be required at the call-up stage and be documented.

If pressed: PSPC is best placed to speak to the specifics of tools they put in place as well as changes in their departmental practices over the years in issuing calls up against their tools.

8. Can a sole source justification be used for a supply tool such as a standing offer and apply to all individual call-ups?

• A Standing Offer can be sole source. However, this does not replace the need for individual call-ups against it to be supported by a sole source justification and documented accordingly.

9. Do you condone switching procurement strategies?

• Procurements are expected to be managed in a manner that enables operational outcomes.
• Treasury Board policy further requires that contracting authorities provide advice and recommendations to managers on procurement strategies that meet operational requirements and have the intended results, including outcomes-based approaches where appropriate.
• It is reasonable that discussions between contracting authorities and managers on the best approach to achieve the desired objectives may result in changes in procurement strategies.
• However, procurement strategies should never be designed to favour a particular supplier.  

10. Is it normal to communicate with a potential supplier about a method of supply and then change it?

• Conducting market analysis to better understand industry capacity and availability is an important part of the procurement process and achieving best value for Canadians.
• All industry engagement activities must be undertaken in a fair, open and transparent manner that meets public scrutiny and expectations.
• Industry should never have unfair access to any aspect of the solicitation or evaluation process.
• The determination of the appropriate procurement strategy and method of supply should be made based on all information available and the resulting decision and analysis must be documented.

11. Based on the findings of OPO, do you accept the conclusion that McKinsey was shown favouritism?

• Treasury Board policy requires that procurements be conducted in a manner that is fair, open and transparent, and meet public expectations in matters of prudence and probity.
• We understand that the Ombud did not find evidence of favouritism but did arrive at a conclusion that there were instances where there was a “perception” of favouritism towards McKinsey. 
• We are not in a position to comment on observations that are made based on assumptions and interpretations.

12. PSPC has said that a requirement of Treasury Board policy is benchmarking – What is the Treasury Board policy requirement?

• Our policy requires that project and programme governance is supported by structures and processes such as committees, quality assurance and the use of independent reviews (Policy on the Planning and Management of Investments and the Directive on the Management of Programmes and Projects).
• An independent review provides for an unbiased view of a project by qualified and objective individuals or reviewers who operate in arms-length of the project (based on the Guide on Independent Reviews).
• It is particularly important that these reviewers are free of conflict of interest and there is no prejudice related to the project.
• It is important to note that being independent does not mean that it has to be outside of government. For example, departments can use other governance committees with no interest in the project, or create a panel of experts from existing resources as long as they have no ties to the project.
• Benchmarking is a useful tool in the management of projects that provides insight on how the government initiative stacks up against what is being done elsewhere, either by other nations or within a certain industry segment.

13. How does the government ensure that suppliers are ethical and uphold the public’s trust?

• I would invite PSPC to speak to the Code of Conduct for Procurement and their new Office of Supplier Integrity and Compliance (OSIC).

14. Who is looking at contracting activities at the GC-level to identify systemic issues and broad trends?

• As a responsible policy authority, TBS conducts ongoing assessment and environmental scans to determine how effectively rules are working.
• The recently announced Risk and Compliance Process will help deputy heads and TBS ensure that procurement controls are in place and working effectively across government.
• As well, the Comptroller General is undertaking a horizontal audit across a number of large departments to assess governance, decision-making and controls associated with professional service contracts, including IT.
• Furthermore, as a regular practice, TBS assesses audits, departmental performance and feedback from the procurement community. Where needed, policy instruments and guidance are adjusted or reinforced.

15. What happens when contracting rules aren’t followed?

• Deputy heads are accountable for internal controls to support compliance in their organizations, and for ensuring that proper measures are taken.
• This includes ensuring that delegations are at the appropriate levels within the organizations and that those with delegated authority have the necessary training and awareness of the rules and their obligations.
• Ultimately disciplinary measures, such as the removal of delegation, can be applied when rules aren’t followed. 

16. What is in place to guide deputy heads when rules aren’t followed?

• The Framework for the Management of Compliance sets out the core responsibilities of deputy heads for ensuring compliance with Treasury Board policies within their organizations and for TBS to appraise the state of compliance across the Government of Canada.
• Administrative and disciplinary action cited by the Framework provide a range of corrective measures commensurate with the nature of the non-compliance, including training, suspension, demotion and, for the most severe infractions, termination.
• The Framework also states that deputy heads, when responding to non-compliance, need to ensure that the nature of the consequences and their severity are commensurate with the nature of non-compliance.

17. Does the Framework for the Management of Compliance prescribe or provide direction to deputy heads regarding what types of consequences to impose for certain types of non-compliance?

• No. The Framework for the Management of Compliance does not prescribe or provide direction to deputy heads regarding what types of consequences to impose for certain types of non-compliance.
• Deputy heads need to ensure that the nature of the consequences and their severity are commensurate with the nature of the non-compliance.
• Administrative and disciplinary action cited by the Framework provide a range of corrective measures including training, suspension, demotion and, for the most severe infractions, termination.
• In determining what consequences to impose for individuals, deputy heads need to consider legal requirements in legislation such as the Public Service Employment Act, the requirements of the Values and Ethics Code for the Public Sector and the requirements of Treasury Board policies such as the Policy on People Management, the Directive on Conflict of Interest, the Guidelines for Discipline, and thePolicy on Government Security.

18. What are the responsibilities of TBS with respect to monitoring compliance with Treasury Board policies?

• The onus for monitoring internal management practices in departments and agencies and reporting instances of significant non-compliance rests first and foremost with deputy heads.
• Under the Framework for the Management of Compliance, the Treasury Board of Canada Secretariat (TBS) is responsible for appraising the state of compliance with legal and Treasury Board policy requirements across government and taking appropriate action as necessary to align behaviour with these requirements.
• TBS can use information gathered through a range of sources to gauge the state of compliance management in the government, including internal and horizontal audits, Auditor General reports, evaluations, Treasury Board submissions, and other reports to Parliament.
• The recently announced Risk and Compliance Process provides an additional tool to assess compliance in departments and across the government.

19. What are Treasury Board requirements for documentation?

• The duty to document is a positive duty for public servants and officials to create records necessary to document their decisions, actions, advice, recommendations and deliberations. There are a number of statutory requirements for the public service to create records in specific circumstances.
• The Financial Administration Act imposes a general duty to document the financial administration of the government.
• Under the Treasury Board’s Policy on Service and Digital, deputy heads are responsible for ensuring that decisions and decision-making processes are documented to account for and support the continuity of departmental operations; permit the reconstruction of the evolution of policies and programs; and allow for independent evaluation, audit and review. The policy also states that all employees are responsible for documenting their activities and decisions.
• Under the Treasury Board’s Policy on the Planning and Management of Investments, deputy heads are responsible for ensuring that information is available to enable performance measurement and reporting as well as to support planning, budgeting and accounting for allocating resources (section 4.1.4).
• Under the Directive on the Management of Procurement:
  • Contracting authorities are responsible for documenting the justification for using a non-competitive process (under Government Contracts Regulations); risk management strategies, financial assessments and ongoing price validations; limitation of contractor liability or indemnification; strategies to achieve socio-economic and environmental benefits; and contractor performance.
  • Business owners are responsible for documenting receipt and certification of goods, services and construction and that they meet provisions of the contract; costs, including confirming that the invoice is in accordance with the contract and reflects the work performed; and lessons learned and best practices.

20. What is TBS doing to address the systemic issue of missing documentation? How is it making sure there is compliance with its requirements?

• Last summer, TBS updated the Directive on the Management of Procurement to increase requirements related to documentation such as requiring SDOs for procurement to have a risk-based system of internal controls that are maintained, monitored and reviewed to provide reasonable assurance that procurement transactions are carried out in accordance with the departmental procurement management framework and applicable laws, regulations and policies.
• TBS also updated the Managers Guide: Key Considerations when Procuring Professional Services in March 2024, which provides business owners with practical advice related to maintaining records, underscoring documentation as one of their key responsibilities.

21. Who sets the rules for security of contractors doing business with the Government of Canada?

• The Treasury Board Policy on Government Security and the Directive on Security Management (DSM) provides direction to Government of Canada departments and agencies on managing government security.
• The DSM establishes requirements for the management of security within departments, including the need for departments to identify and document security requirements for their contract. Departments are responsible for implementing, including and monitoring related security controls.

22. Who is responsible for making sure security rules are followed in contracts?

• The Policy on Government Security and its related instruments set out the requirements that federal departments and agencies must follow. Responsibility is assigned to departmental deputy heads as accounting officers under the Financial Administration Act.
• Among other responsibilities, deputy heads are responsible for establishing their department’s security governance and designating a chief security officer to provide senior leadership, coordination and oversight for departmental security management activities.

23. Can any contractor start working for the government without a security clearance?

• No. The Standard on Security Screening outlines the security screening requirements for all duties and positions in the federal government, including those of contractors.

24. Are public servants allowed to concurrently hold other jobs outside of government?

• The Directive on Conflict of Interest states that public service employees should refrain from having private interests and engaging in outside employment that may impair their ability to be objective and impartial. Employees must advise their deputy head of outside employment and activities that could result in a real, apparent or potential conflict of interest.
• Anyone employed in the federal public service who has not complied with the requirements in the directive may be subject to disciplinary measures, up to and including termination of employment.

25. How many public servants have been terminated as a result of conflict of interest infractions?

• As a regular practice, the Treasury Board of Canada Secretariat (TBS) does not normally collect this information centrally.
• However, the Office of the Chief Human Resources Officer asked departments to provide information on the number of employees who have declared a contractual relationship with the Government of Canada, as well as how many of these declarations have resulted in findings of real, apparent or potential conflicts of interest. The 76 organizations subject to the Directive on Conflict of Interest reported that, in 2023–24, there were 162 conflict of interest declarations involving contractual relationships with the Government of Canada.
• Of these, 74 were determined to pose no real, apparent or potential conflict of interest. Of the remaining 88, 7 identified a real conflict of interest, 29 identified apparent conflict of interest and 26 identified a potential conflict of interest. At the time of reporting, 32 declarations were still being assessed.
• In all cases where an assessment had been completed and identified a real, apparent or potential conflict of interest, mitigation measures were put in place, the contract in question was not pursued or the employee opted to resign from the public service.

26. What steps are being taken to limit the use of costly IT consultants?

• The government is taking additional measures to further improve recruitment and workforce development efforts for IT and digital talent. The Directive on Digital Talent contributes to this effort by strengthening data collection and central guidance on digital talent sourcing, improving interdepartmental coordination, and augmenting government-wide tools and services.
• The directive requires managers to complete the Digital Services contracting questionnaire prior to initiating a procurement process for digital talent or services. If procuring due to a talent shortage, managers must verify and prove that no talent is available through a GC digital talent search. The GC Digital Talent Platform can assist in finding pre-qualified talent quickly and efficiently.
• The procurement of professional services will continue to be used when specialized expertise is required or when it represents a more effective use of public funds.

27. Why can’t the government simply hire or train IT experts?

• There is a significant talent deficit in technology in both the private and public sectors in Canada. This includes the federal public service.
• The Government of Canada prioritizes the use of internal resources and re-skilling our people to support evolving digital service delivery. Where it makes sense and when necessary, we use specialized expertise to temporarily augment our workforce to keep delivering to Canadians while keeping our financial targets and project timelines for rebalancing government spending.
• The GC Digital Talent Strategy is helping the government to rethink the way it recruits, develops and deploys talent across the public service to ensure that it offers opportunities for up-to-date training, development and advancement for its digital.

28. What is the government doing to recuperate the funds from fraudulent companies?

• The Government of Canada takes allegations of wrongdoing and fraudulent activity seriously and is committed to taking action against improper, unethical and illegal business practices and holding individuals and companies accountable for their misconduct while protecting federal expenditures.
• The department responsible for developing the contract is responsible for recuperating any funds.
• Specifically, investigations by Public Services and Procurement Canada (PSPC) found that three professional services subcontractors fraudulently billed the Government of Canada by billing multiple organizations for the same period of time under multiple separate contracts.
• Public Services and Procurement Canada (PSPC) took swift action and suspended the security status of the subcontractors identified in the scheme when sufficient evidence became available to confirm that fraudulent billing took place. This prevents these individuals from doing business with the government on contracts with security requirements. Following an investigative process, these cases were referred to the RCMP for criminal investigation.
• PSPC is working with officials of affected organizations in this matter in order to secure restitution from prime contractors under the terms of the contracts.

29. What is the Risk and Compliance Process and how will it work?

• The Risk and Compliance Process will assess departmental compliance and performance in foundational areas of administration, to ensure that deputy heads understand the challenges and risks related to their accountabilities. This process will also allow TBS to identify and address systemic challenges across government.
• The process, which is in the early stages of development, will examine a range of core areas, including procurement, service delivery, financial management, and cyber security to ensure that departments and public funds are being well managed.
• To reinforce the importance of management excellence and stewardship, this process will track improvements needed to address deficiencies and include clear consequences where non-compliance with rules and requirements is not addressed.