Question Period Note: Integrity in federal procurement during the COVID-19 pandemic

In the fast-paced and constantly evolving marketplace to secure necessary products and supplies to support the Government of Canada’s response to the pandemic, there have been reports of wrongdoing and fraudulent activity associated with the procurement of PPE from around the world. Questions may arise as to the measures that Public Services and Procurement Canada (PSPC) has in place to protect the integrity of the federal procurement system during this period.

• The Government of Canada is committed to taking action against improper, unethical and illegal business practices and holding companies accountable for such misconduct
  • To help ensure the Government of Canada does business with ethical suppliers, a government-wide Integrity Regime is in place. The Regime holds suppliers accountable for their misconduct, and also encourages them to cooperate with law enforcement and take corrective action
  • PSPC has consistently applied the Integrity Regime to all COVID-19 related procurements
  • To date, no contracts have been awarded to a supplier that is ineligible or suspended under the Integrity Regime

If pressed on the status of Deloitte:

• Pursuant to the Ineligibility and Suspension Policy, we verified the status of Deloitte Canada prior to the award of the contracts to which the government’s Integrity Regime applies
• According to the terms of the Integrity Regime, Deloitte Canada remains able to contract with the Government of Canada

If pressed on the allegations facing Deloitte China and Deloitte Touche Tohmatsu:

• We are aware of the information relating to violations and offences by Deloitte Touche Tohmatsu
• None of these violations are an offence that would trigger a determination under the Integrity Regime. Furthermore, this organization is not a supplier to the Government of Canada
• Under the Regime, a supplier may be suspended or declared ineligible to do business with the Government if, in the previous 3 years, it, members of its board of directors or its affiliates, have been charged with or convicted of one of the offences listed in the Ineligibility and Suspension Policy in Canada, or similar offences abroad

The Government of Canada has a framework of laws, regulations and policies in place to protect the integrity of the federal procurement system. PSPC administers several programs under this framework, including the government-wide Integrity Regime, the Federal Contracting Fraud Tip Line, and increased oversight for the detection of bid-rigging.

The Integrity Regime is designed to help ensure that the Government does business with ethical suppliers and incentivizes suppliers to ensure strong ethics and compliance frameworks. Under the Regime, a supplier may be suspended or declared ineligible to do business with the Government if, in the previous three years, it, members of its board of directors or its affiliates, have been charged with or convicted of one of the offences listed in the Ineligibility and Suspension Policy in Canada or a similar offence abroad.

Under the current Regime, 4 companies have been declared ineligible to do business with the Government of Canada due to convictions for a listed offence (Hickey Construction Ltd., Les Entreprises Chatel Inc., R.M. Belanger Limited and Les Industries Garanties Limitée). One company is subject to an administrative arrangement in lieu of suspension due to charges of a listed offence (SNC-Lavalin).

In 2018, the Government announced its plans to enhance the Integrity Regime by increasing the number of triggers for debarment, broadening the scope of business ethics covered by the Regime, and integrating greater flexibility within the debarment process. Following this announcement, there was considerable public discourse around corporate wrongdoing as well as governments’ response to such misconduct. As a result, the Government announced that it was taking additional time to reassess elements of the proposed Regime and potential next steps.

In the interim, the current Ineligibility and Suspension Policy remains in effect.

Deloitte Touche Tohmatsu

Since 2011, the US Securities and Exchange Commission (SEC) has brought several actions for the production of documents by Deloitte Touche Tohmatsu (DTT) in China. All actions were administrative in nature and none lead to criminal charges or convictions. Separate SEC actions against Deloitte Touche in the US have resulted in administrative fines; however there was no determination of liability and administrative offences do not trigger the application of the Integrity Regime.

None