Public Accounts Committee on March 7th, 2024

[Catherine Poulin]

I will go one by one.

If we're talking about Dalian, a decision has been made to revoke the security clearance of the organization. This is mainly based on the fact that Dalian has two key senior officials representing the company vis-à-vis the contract security program. When we are informed that there are allegations against a company or key senior officials, we need to verify and support the evidence to see if it's against the controls or to see what is required from the individual or the company to be in good standing with the contract security program.

As we were informed that a key senior official was also a full-time employee in one of the departments, this is against the requirements or control of the program. We were able to support that allegation very fast, and we were in a position to suspend the security clearance of the key senior official and the security clearance of the organization.

To go to GC Strategies, it's the same process we are using to assess the compliance of the organization vis-à-vis the contract security program. We received allegations. However, allegations are not enough to support a decision to suspend. We need to support that by evidence, and as soon as we got enough evidence to support the decision, we decided to suspend the security clearance of the key senior officials and the company.

[The Chair, Conservative, John Williamson]

Thank you.

That is the time and finishes our first round.

We're now beginning the second round with Mr. Barrett.

You have the floor for five minutes, please.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Has PSPC outright banned GC Strategies from receiving any and all government contracts?

[Arianne Reza]

There are two tools we use. One is a procurement stop-work order for 180 days. That's in place across the system. We have a second tool, which is a heavy hammer in terms of security. If you don't hold a security...you can't do business. Both tools are in place, and right now we're working across the system to terminate contracts and there's no new work.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Is that a pause or is that a prohibition? Let's just use plain language so that people understand.

[Arianne Reza]

I'm just putting it in place in my head. The suspension is a prohibition until further notice. If there's more information forthcoming, if the RCMP—

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

That's a pause.

[Arianne Reza]

Well, for all intents and purposes, it can't be in perpetuity without some type of recourse, so we consider them suspensions. There would have to be a very high response to get it back. That seems very doubtful at this stage.

I'm going to turn again to Dominic.

[Dominic Laporte]

I'm happy to add very quickly to that.

They are currently suspended for 180 days. At the same time, we are seriously looking at termination. Basically, we want to make sure that those decisions are not made lightly. I want to make sure that I receive evidence, eventually, from my colleagues. We're going to be taking that into account. If the grounds are sufficient for termination—if it basically validates the grounds that we had for the suspension—we'll proceed with the termination.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Let me run something by you very specifically in the case of GC Strategies.

We had the principal for GC Strategies, Mr. Firth, here at a parliamentary committee. In the testimony that I'm certain you're privy to—you've seen it—he admitted to falsifying information that he used to win a bid. He lied, and he admitted that at committee.

Whether or not the RCMP can use that in a criminal investigation is a separate question, but can PSPC use it? He admitted to fraudulent activity in order to win bids from the Government of Canada. Is that not enough?

He has also been caught multiple times objectively lying to a parliamentary committee, but are fraud and forgery not sufficient grounds to ban, to blacklist and to have a prohibition in perpetuity for a contractor when we're talking about tax dollars?

[Dominic Laporte]

As to what is said in front of committee, we have to be careful with that so that it does not necessarily.... Can we transpose that and use it? Again I would say that we start with the suspension and the desired effect is accomplished. Basically, the company can no longer secure any government contracts, can no longer do business. We take the time because we want to make it right. If we're going to terminate, we want to make sure that the supplier is not able to come back and allege that, for whatever reason, this person was not properly terminated—

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Are they being paid for anything right now, Mr. Laporte?

[Dominic Laporte]

To my knowledge, they're not being paid by PSPC for any contract being done.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Do they have any contracts with the Government of Canada? Are there any ongoing contracts with the Social Sciences and Humanities Research Council of Canada, for example?

[Dominic Laporte]

There was a call-out done by TBS and it did not indicate that there were any outstanding contracts with them or payments being made.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Then you're confirming today that GC Strategies has no ongoing business with the Government of Canada.

[Dominic Laporte]

That is my understanding, and I would be pleased to validate that with the committee.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

You'll report back to the committee, but we'll take your answer at face value.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Barrett. The committee looks forward to that validation.

I appreciate your answer today. There was a request, and you have acknowledged that you will validate that. We look forward to it. Thank you.

Mr. Barrett, you have a minute and five seconds.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

In how many instances or contracts did GC Strategies use false information in order to win the bid?

[Arianne Reza]

I think at the request of OGGO, we looked at two areas of all active contracts with the three suppliers: their security and their CVs. In fact, Catherine's shop led the investigation.

[Catherine Poulin]

As the deputy minister said, we did our due diligence when the allegations were brought to our attention. We worked with the departments and agencies that had active contracts with those companies. Primarily, we sought to confirm two things: did the people have the right security clearance to work on the contracts and were they what they claimed to be. We also worked with the supplier companies to obtain CVs. Those CVs were forwarded to the departments and agencies to ensure that those people were in the right category or were really at the level they claimed to be. At that point, no—

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

I'm out of time, ma'am.

I appreciate the process. I'm looking for the number of occurrences.

[Catherine Poulin]

[Inaudible] during that verification process, which began in recent months.

[The Chair, Conservative, John Williamson]

Thank you very much.

Next is Ms. Bradford.

You have the floor for five minutes, please.