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 Personal Protective Equipment (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
  • 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
  • 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

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 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 a similar offence abroad.

Under the current Regime, 3 companies are ineligible to do business with the Government of Canada due to convictions for a listed offence (Les Entreprises Chatel Inc., R.M. Belanger Limited and Les Industries Garanties Limitée). One supplier has had their period of ineligibility reduced to 5 years pursuant to an administrative agreement which came into effect in December 2020 (Hickey Construction Ltd).

The administrative agreement with SNC-Lavalin concluded in December 2020 in accordance with the terms of the agreement and the final disposition of criminal charges facing the supplier and relevant affiliates. On April 20, 2021, it was announced that the World Bank had granted an early lifting of all sanctions previously imposed on SNC-Lavalin Group and its affiliates. The World Bank’s debarment was imposed in 2013 for a period of 10 years with an option to reduce it to 8 years if the companies complied with all conditions of the agreement. The company and its affiliates will now be able to bid, win and carry out work on projects financed by the World Bank and the other multilateral development banks.

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.

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