Question Period Note: Conflict of Interest and Contracting

What is the Government doing to prevent conflicts of interests and ensure fairness in bidding for government contracts?

• The Government is committed to ensuring that federal public office holders carry out their duties with integrity and impartiality.
• The Conflict of Interest Act imposes rules to minimize the possibility of conflicts between private interests and the duties of public office holders.
• There are safeguards in place to address potential or actual conflicts of interest in relation to procurement, including the Code of Conduct for Procurement.
• Departments must exercise due diligence and effective stewardship of public funds when awarding contracts.
If pressed:
• The Government is committed to ensuring procurements are conducted in a fair, open, and transparent manner in accordance with the Treasury Board’s policies, as well as regulations, guidelines and procedures.
• Departments report quarterly on their expenditures, and all contracts over $10,000 are publicly disclosed on open.canada.ca, further demonstrating the government’s commitment to openness, transparency and accountability.
• Safeguards to address potential or actual conflicts of interest in relation to procurement include standard contract clauses; the requirement for all proposals to be reviewed through a conflict of interest lens; and the need for evaluators to recuse themselves for real or possible conflicts.
• The Government of Canada’s Code of Conduct for Procurement and its Integrity Regime utilises fairness monitoring to address conflicts of interest and unethical practices.
• In addition, all contracts are subject to review by internal audits, the Procurement Ombudsman, and the Auditor General of Canada.

The Conflict of Interest Act establishes conflict of interest and post-employment rules for public office holders. Public office holders covered under the Act include ministers, ministerial staff, and Governor-in-Council appointees such as deputy heads. The Act plays an important role in maintaining public confidence in the integrity of public office holders and government decision-making. Although the Act does not assign responsibilities to a specific minister, the President of the Treasury Board has been deemed as the Minister responsible for the Conflict of Interest Act.
The Conflict of Interest and Ethics Commissioner administers the Conflict of Interest Act by establishing compliance measures, investigating possible contraventions of the Act, and providing advice to public office holders on their obligations. The Commissioner is an officer of Parliament. Officers of Parliament are independent from the Government and report directly to Parliament. On January 9, 2018, Mario Dion was appointed as the second Conflict of Interest and Ethics Commissioner.
The Conflict of Interest Act came into force on July 9, 2007, which created, for the first time, a legislative regime governing the ethical conduct of public office holders. Prior to this date, public office holders were subject to non-statutory codes of conduct.
The Conflict of Interest Act required a one-time statutory review by a parliamentary committee. In 2014, the Standing Committee on Access to Information, Privacy and Ethics (ETHI) completed the review of the Act. ETHI recommended some changes to the law, including expanding the Act’s definition of public office holder, clarifying certain provisions, and adjusting the administration of the Act. Later that year, a regulation was enacted to add new positions subject to the Act (e.g., Governor of the Bank of Canada).
On June 10, 2021, ETHI tabled a report entitled “Questions of Conflict of Interest and Lobbying in Relation to Pandemic Spending”. The report offered 23 recommendations regarding the federal conflict of interest and lobbying regimes; accountability to Parliament; Government contribution agreements and contracts with the WE group; oversight of the processes for entering into contribution agreements or contracts to ensure they are fair, transparent, and comply with the Official Languages Act; volunteer programs; and the use of new technologies that may have privacy implications.
Additionally, ETHI recommended that “the Government of Canada conduct a comprehensive review of the Conflict of Interest Act.” In its dissenting opinion, the Liberal Party of Canada recommended that ETHI conduct “at the earliest opportunity, a full statutory review of the Conflict of Interest Act with appropriate recommendations.”
The dissolution of Parliament on August 15, 2021, put an end to the requirement to respond to the ETHI report. At a meeting of ETHI in December 2021, a motion to restart a study on conflict of interest and lobbying related to pandemic spending was defeated.
In the Directive on the Management of Procurement, business owners and contracting authorities are responsible for adhering to the Values and Ethics Code for the Public Sector and the Directive on the Conflict of Interest when engaging with suppliers, in addition to monitoring and reporting any conflict of interest that may exist and taking appropriate mitigating action as required.
In January 2022, there was media coverage on the increase in federal spending on outsourcing contracts for professional and special services since 2015 -- a 41.8% increase, from $8.4B spent in FY 2015-16 to $11.8B spent in FY 2020-21. It also raised questions about the political ties of McKinsey and Company, a global management consultant, which was awarded a $4.9M contract to help improve the Phoenix system.

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