Question Period Note: Tabling of the 2020 to 2021 Public Accounts in the House of Commons

The Public Accounts of Canada for 2020 to 2021, which include the audited consolidated financial statements of the Government of Canada, will be tabled in the House of Commons by the President of the Treasury Board by the end of December 2021.

• The Government is committed to open, transparent and accurate accounting
  • Public Services and Procurement Canada’s 2020 to 2021 Public Accounts reflect sound financial management and responsible spending in the delivery of its mandate as a common service provider

If pressed on debts, obligations and claims written off or forgiven:

• Public Services and Procurement Canada has rigorous processes in place to recover most of the debts, obligations, claims and losses that occurred in prior years
• There was an increase in accounts receivable due to an invoice issued to the Montreal Airport ($47M) and for vaccines purchased in March 2021 by the Ontario Ministry of Health & Long-Term Care ($20M) – all of which have now been collected in full
• Airports in Montreal and Québec City suffered financial hardship due to the COVID-19 pandemic that resulted in outstanding amounts owing to Public Services and Procurement Canada of $16 million in March 2020 that accrued interest of $538K in 2020-21. As part of the Government of Canada’s relief package for airport authorities, the accrued interest of $538K was waived in 2020 to 2021

If pressed on Contractual Obligations:

• Public Services and Procurement Canada plays an important role in the daily operations of the Government of Canada as the central purchasing agent for federal departments and agencies
• In 2021, Public Services and Procurement Canada exercised its contractual option with BGIS Global Integrated Solutions Canada LP (BGIS) for building maintenance services as part of the normal course of business which accounts for a $2.48B increase
• Contractual obligations also increased due to COVID-19 contracts, notably for the deployment of mobile health units, construction of the Biologics Manufacturing Centre, and the purchase of personal protective equipment

If pressed on losses of public money:

• Losses of public money represents any amount of money misused illegally or by accident even if the amount is recovered
• The most significant loss reported relates to loss incurred by the Receiver General for misdirected payments issued on behalf of federal government departments (electronic deposits or cheques)
• There was a significant increase in payments issued from April 1, 2020 to March 31, 2021 to individuals and businesses as a result of the actions taken by the government to support hardship created by the COVID-19 pandemic (ex. CERB, Wage Subsidy, Rent Subsidy, etc.)
• With the growth in direct deposit volumes, an increase in misdirected deposits was expected. This increase has been consistent with historical rates in terms of percentage of overall volumes of payments issued. Having a misdirected deposit does not necessarily mean that funds were lost as recoveries are ongoing. Some reasons for misdirected deposits may include wrong information received from the recipient (i.e. the recipient provides incorrect banking information), wrong information received from the department, manual errors, and potentially, fraud
• PSPC has rigorous processes in place to recover most of the losses that occurred in prior years. In the instances where misdirected payments are made, a sustained effort is made by the Receiver General and the financial institutions, within the parameters of the law, to recover them
• Of the total loss of $52M reported in 2021, $32M (62%) was recovered in the current year and $9M (17%) is expected to be recovered in future years. The remaining amount of $10.6M is not expected to be recovered. At the time of preparing the Public Accounts, limited information was available about the $10.6M not expected to be recovered. The Receiver General and financial institutions are working together to recover losses and any portion recovered will be presented in the Public Accounts in the years the amounts are recovered
• The highest misdirected deposit was for an amount of $3,489,087 and this amount was fully recovered
• There are no breakdowns available for these types of losses (i.e. type of payment, province and individual vs. business, etc.)
• In 2020 to 2021, the Receiver General for Canada issued 405 million direct deposits for a value of $494 billion. This represents an annual increase of 35% and 56% respectively. The total misdirected direct deposits were $26 million (0.0053%) and after recoveries and adjustments $7 million (0.0014%). Of this latter amount, $4 million (0.0008%) was charged to the Receiver General

If pressed on losses of public property:

• Losses of public property are attributed to accidental loss, destruction or damage as well as illegal acts that occurred or were discovered such as damage to buildings, losses of electronic devices or damage to Crown vehicles
• Public Services and Procurement Canada has rigorous and effective security practices and controls in place to minimize these losses
• Accidental losses, destruction or damage increased by $466,000 as there was an increase in the number of incidents of damage to buildings (from 11 cases in 2019 to 2020 to 17 cases in 2020 to 2021) with higher dollar value incidents (including a boiler fire, water damage, damage to roofs, doors, windows, fences, and guard rails)
• Losses due to offences or other illegal acts increased by $140,000 as there were more cases of vandalism to buildings (graffiti, broken windows and fences) – from 10 cases in 2019 to 2020 to 26 cases in 2020 to 2021
• The department continues to safeguard its assets through ongoing improvements to its inventory management processes

If pressed on payments of claims against the Crown:

• In 2020 to 2021, Public Services and Procurement Canada saw an increase of $20M in payments of claims against the Crown
• The main increase is due to the compensation to departmental employees for the Phoenix pay system transition which totaled $19.5M for 10,808 cases

The Public Accounts of Canada is a report prepared annually by the Receiver General, as required under Section 64 of the Financial Administration Act. The information contained summarizes the financial transactions of all Government departments and agencies, as well as the detailed records maintained by each department and agency, including Public Services and Procurement Canada.

The Public Accounts of Canada covers the fiscal year of the Government ending on March 31. It provides information to Parliament, and thus to the public, which will enable them to understand and evaluate the financial transactions of the government for transparency and to present a fair picture of the country’s financial position.

Each department is responsible for submitting financial information to the Receiver General who then consolidates the government-wide information into the Public Accounts of Canada. Responsibility for the form and content of the Public Accounts of Canada rests with the Minister of Finance, as well as the President of the Treasury Board who is responsible for tabling the Public Accounts of Canada in the House of Commons.

Contractual obligations – Outstanding obligations: increase of $3.14B

• Contractual obligations are agreements with outside parties resulting in significant cash outlays and which are categorized as assets, future leases or purchases
• In 2021, Public Services and Procurement Canada exercised its contractual option with BGIS Global Integrated Solutions Canada LP (BGIS) for building maintenance services as part of the normal course of business which accounts for $2.48B of the increase
• BGIS is the biggest contractual obligation representing 47% of the total outstanding amount for Public Services and Procurement Canada
• There are three (3) COVID-19 contracts reported – for deployment of mobile health unit, construction of Biologics Manufacturing Centre, and purchase of personal protective equipment

Accounts receivable: increase of $57M

• Accounts receivable represents billed, unbilled or accrued financial claims arising from amounts owed to the department for use of its assets, or from the provision of services as of March 31st for year-end
• The increase in accounts receivable is due to an invoice issued to the Montreal Airport ($47M) and for vaccines purchased in March 2021 by the Ontario Ministry of Health & Long-Term Care ($20M) – all of which have now been collected in full
• An allowance for doubtful accounts is recorded where recovery is considered uncertain
• There is an increase of $11M in the allowance for doubtful accounts, which includes $8M due to the inclusion of leases with tenants eligible for the Canada Emergency Commercial Rent Assistance program as part of the Government of Canada’s response to the COVID-19 pandemic

Losses of public money: increase of $37 million

• This pertains to any amount of money misused or stolen even if the amount was recovered
• The most significant loss reported was incurred by the Receiver General for misdirected payments issued on behalf of federal government departments (cheques and electronic deposits) as part of Public Services and Procurement Canada’s role in processing payments on behalf of the Government of Canada
• There was a significant increase of payments issued in 2021 to individuals and businesses as a result of the actions taken by the federal government to support financial hardship created by the COVID-19 pandemic (e.g., CERB, Wage Subsidy, Rent Subsidy)
• Also, there was an increase in errors in the manual entry of recipient banking information by various departments for direct deposits
• 62% of the loss was recovered

Environmental liabilities: decrease of $19 million

• Federal contaminated sites are located on land owned or leased by the federal government, or on land where the federal government has accepted responsibility for the contamination
• Contamination is most often a result of past activities with environmental consequences that were not well understood at the time
• The Government of Canada has taken action through the Federal Contaminated Sites Action Plan (FCSAP) and remains committed to properly manage those contaminated sites for which it is responsible
• In 2020 to 2021, Public Services and Procurement Canada spent $18.8M in remediation costs
• The main spending was for the Alaska Highway, Contrecoeur landfill, former St. Germain Foundry Inc. landfill and New Victoria Mine Water Treatment Plant
• This demonstrates that Public Services and Procurement Canada is actively continuing to properly evaluate and take remediation measures for its contaminated sites

Expenditures of Minister’s Office – Including Travel Expenditures: decrease of $0.6 million

• The Minister’s office expenditures are comprised of costs for personnel, transportation and communications expenses as well as materials and supplies
• Expenditures incurred by the Minister’s Office decreased by $0.6M (from $2.4M in 2019 to 2020 to $1.8M in 2020 to 2021)
• The expenditures decreased mainly as a result of the transfer of the Minister’s Regional Office program (offices available for use by all Ministers when conducting official government business across the country) from Public Services and Procurement Canada to the Privy Council Office in June 2020. This decrease was partially offset by an increase in the Minister’s Office staff following the election in 2019

Payment of ex gratia

• Payment of ex gratia is a discretionary payment made as an act of benevolence in the public interest, free of any legal obligation, whether or not any value or service has been received. Public Services and Procurement Canada has made one payment in the amount of $198,000, to compensate a municipality for its loss of property taxes on an office building newly acquired by the department

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