44th Parl. 1st Sess.
February 27, 2024 10:00AM
- Feb/27/24 11:44:28 a.m.
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Mr. Speaker, I thank my hon. colleague for throwing me such a softball, so to speak, since it is really quite simple.
The two people who founded GC Strategies had already founded a company called Coredal Systems Consulting. That company has had contracts with the Canadian government since 2007, so under the Conservatives. In 2015, they dissolved Coredal and transitioned that company into GC Strategies. That information is very easy to find on the open government website. It was a typical name change that just happened to coincide with a change in government.
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- Feb/27/24 11:45:04 a.m.
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Mr. Speaker, we know that what is happening with ArriveCAN and at CBSA is just the tip of the iceberg.
At the government operations committee, I put forward a motion to expand the study to include the big six highly paid consulting firms. When I put forward that motion, members should have seen the room. Everybody in the corporate control parties ran to their phones, saying to hold on. They were checking in with their friends at the big corporations, including, I am sure, the managing directors at Deloitte, who are both former cabinet ministers from the Liberal Party and from the Conservative Party.
The Conservatives delayed the vote on the motion not once, not for two meetings, but for three meetings. They finally got confirmation and a go-ahead from their corporate-controlled headquarters at Deloitte that they could support the motion. We knew that the Conservatives would never allow that study to happen and to be expanded.
Does the Bloc agree that we need a full investigation that goes well beyond what is going on at CBSA and with the ArriveCAN app and that we need to look at all the outsourcing, especially since it has gone up 546% over the last eight years and has doubled under the Conservatives? We need to get to the bottom of it, and fix this problem.
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- Feb/27/24 12:02:29 p.m.
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Mr. Speaker, it is an honour and a privilege to rise in support of this motion today.
I am going to speak to the broader issue of outsourcing and what New Democrats have been trying to do from the beginning in terms of revealing and bringing an end to the rampant outsourcing to highly paid, external, for-profit consulting firms that are making money hand over fist. Earlier I talked about how, under the former Conservative government, we saw the number of highly paid consultants double. Under the Liberal government it has gone up 546% to the big corporations, to the six highly paid consultant firms.
What we want to do is stop these profits and the economic leakage happening in our country, and bring that work back to the public service. We saw the Conservatives with their Phoenix pay system that was supposed to save taxpayers $80 million. It has cost us over $3.5 billion. Talk about a failure. I find it laughable when Conservatives are up in the polls and they want to force an election. They want us to go from one corporate-controlled party to another. That is not good enough. What we need to do is actually fix the problem.
There is waste worth billions of dollars. It hurts the public service. It also hurts the morale in the public service when it sees a company like GC Strategies, which is two guys who do not have an office or staff but probably have two bar stools at a local bar dedicated to them, getting $59 million in government contracts. What we learned at government operations committee is that they get a commission between 15% and 30%; let us call it 20%. These two guys made $11 million just in commissions. Neither of them is an IT specialist. They are headhunters. This is easily a job that should be brought in-house and not done by external consultants.
We know that ArriveCAN is just the tip of the iceberg. We heard the parliamentary secretary say that this is deeply concerning. It is not just deeply concerning; it is absolutely outrageous, and it needs to end.
I want to compare the over $21 billion in outsourcing, and by the way, the Liberal government wants to make us feel good by cutting 15% of outsourcing. It has gone up 546%, but the Liberals are going to cut it by 15%. Does that gives everybody at home a lot of comfort? I do not think so. Let us think about what the $21 billion in outsourcing could have done for building hospitals or schools, or providing a pharmacare plan that is going to cost $10 billion or a guaranteed livable income for seniors and people living on disability, the most marginalized people in our society.
With ArriveCAN, we saw what was an $80,000 app skyrocket out of control. As my colleague, the member for Timmins—James Bay cited, money needed to be spent in terms of the emergency response to COVID. We absolutely support that, but not the outrageous runaway train. We put forward motions and ideas. We tried to actually look at the outsourcing procurement problem. We put forward a motion at the government operations committee to ask the Auditor General to look not just at ArriveCAN but also at all outsourcing and buy-and-sell decisions by the Government of Canada.
Initially the Conservatives were hesitant to support my motion, but they did. Then they took the motion and brought it to the House on an opposition day to call on the Auditor General to look at ArriveCAN. However, we need to go bigger than that. I supported that and am glad I could work with the Conservatives on it.
Let us face it: The Conservatives gutted the public service. This is when outsourcing started. Michael Wernick, the former Privy Council chair, showed up at the government operations committee. He cited that it was cuts in leadership and training that led to the start of the outsourcing that happened under the former Conservative government. Those were critical, huge cuts. They were very costly, as we can see now as the government goes to outside consultants to provide that leadership. I will talk a little about that.
We put a question on the Order Paper to look at the government's spending on outsourcing consultants. One instance we found was that Natural Resources Canada spent over $600,000 to advise the government on how to cut outside consultants. It used an outside consultant to give it advice to cut outside consultants. One cannot make this stuff up; it is that outrageous. This is what we are seeing.
Let us talk about the history of outside consulting and the need to invest in public servants. We saw the previous Conservative government privatize the Phoenix pay system that was brought in. It was supposed to save $80 million a year. It has actually cost us $3.5 billion. The ArriveCAN scandal pales in comparison to what has happened with the Phoenix pay system.
What we keep seeing are continued sole-sourcing structures of outsourcing, which ensure that companies like GC Strategies are the only ones that can properly bid. We heard at committee about GC Strategies actually altering résumés to help companies qualify and get task authorizations. These are security clearances that are pretty critical and important to the safety of our country. We are also concerned about how they misused indigenous set-asides. They hired a company on an indigenous set-aside that was not indigenous. The owners of that company were embarrassed when they found out, because they believe in reconciliation. They believe that money that is dedicated for indigenous procurement should go to indigenous companies.
We want to get to the bottom of this. We talked about outsourcing doubling under the previous Conservative government. It has more than quadrupled under the current government. We are literally seeing the corporate-controlled parties let the foxes run the henhouse. Today we see the Liberals and Conservatives fighting over who hired whom, who started the whole mess with consulting, who spent more on the same consultants. It is a big problem.
What we need to do is to stop the layering of commissions. We need to take action and solve this problem. There should not be a layering of commissions. We learned that GC Strategies got a contract and then subbed it out to another contractor, who subbed it out again. We saw cases in which Dalian and Coradix, another two-person outfit that was making millions of dollars, subbed out to GC Strategies, which then subbed out to somebody else. They took commissions along the way. We heard from the deputy minister that there is no limit on commissions. We could see that commissions could be 60% to 70% of a bid. This is an economic leakage that is out of control, and it is a self-perpetuating cycle in terms of outsourcing that reduces public service capacity.
I want to say that that layering is like the biggest pyramid scheme I have ever seen. Someone gets a contract, subs it out and takes a cut. Then they sub it out to the next person. They are all friends. These companies with two staff and no offices are something that seems to be coming up, and that was just with CBSA. We need to look beyond. We wanted to look at Deloitte, for example. It went from receiving $11 million in contracts in 2015 to $275 million. We wanted to look at PricewaterhouseCoopers, which went from $20 million to $115 million. This is just since 2015.
I put forward a motion to expand the outsourcing study to include the big six. Madam Speaker, you should have seen the room when I put forward that motion. Everybody ran to their phones. The corporate-controlled parties were checking in with their head offices, making sure it was okay to support this motion, and they delayed it.
They delayed the vote on it, and then the Conservatives decided to delay it one more time. It took three meetings before they supported it. The reason they supported it was that they knew that it would never see the floor. We are close to the anniversary of expanding that motion, and we have not gotten to the bigger study. I find it kind of odd, given that a former Liberal cabinet minister, Pierre Pettigrew, is a managing director at Deloitte, and a former leadership contender in the Conservative Party, Peter MacKay, is a managing director at Deloitte. No kidding that they do not want to study it and put it under the microscope, and they do not want the Auditor General taking a look and doing a deep dive. These big corporations are just like the smaller ones, like GC Strategies. They get the bid, sub it out and take a cut. They are not doing a lot of the work.
We want to fix this. We will keep fighting for that. We want to put a cap on commissions. We want integrity in procurement, and that includes making sure that all bids are competitive, instead of this sole-sourced business. We want to end and prevent the misconduct that is taking place. We want to stop our public dollars from turning into private profits. In terms of looking at indigenous set-asides, they actually need to go to businesses that are indigenous-owned and indigenous-operated and delivering services.
The New Democrats are here to actually bring solutions and try to fix this problem, so that we can get the support to Canadians who are struggling right now.
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- Feb/27/24 12:30:14 p.m.
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Madam Speaker, to try to relieve some tension on the other side, the member should look up Coredal Systems Consulting, which is virtually the same company, the same two individuals. That is what we are—
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- Feb/27/24 1:35:55 p.m.
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Madam Speaker, again, under the Conservative government, the outsourcing to highly paid consulting firms doubled. Under the Liberal government, it has gone up fourfold.
The ArriveCAN fiasco is just the tip of the iceberg. We have been calling for the government, and for the government operations committee, to investigate the big six consulting firms.
We saw Deloitte with over $100 million in contracts just last year. Already this year, it is at $275 million. Deloitte is run by a former Conservative cabinet minister who is the managing director. We put forward a motion to expand the study to include Deloitte. People should have seen the room. Panic ensued, and the Conservatives delayed voting on it, not once but at three meetings.
Will the Conservatives stop blocking and let an investigation ensue on the big corporations, including Deloitte, or are they going to continue to work with the Liberals in protecting their friends and the highly paid consultants through their corporate-controlled parties?
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- Feb/27/24 1:37:03 p.m.
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Madam Speaker, the cover-up coalition is just that. It has an agreement. The NDP support the Liberal government on all orders of things. In exchange for that, the NDP did not get a seat at the cabinet table, but it does have veto power. The NDP also has the opportunity to not support the Liberal government when it is increasing funding to outside consultants, which is exactly this case. That member voted more than a half-dozen times to increase spending, with $20 million going to one outside consulting company.
How many public servants could be hired with the tens of millions of dollars that were spent on the arrive scam that went to consultants making 30%, but did no actual work on the app? Dozens. Where was the NDP? It was in lockstep with the scandal-plagued Prime Minister. It is a shame.
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- Feb/27/24 1:50:58 p.m.
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Madam Speaker, I am going to raise it again. The ArriveCAN scandal fiasco is just the tip of the iceberg. We have watched companies like Deloitte go from $11 million to $275 million a year. These are highly paid consulting firms, and the NDP put forward a motion to expand the investigation to look at all outsourcing, including these big corporations.
I have asked Conservatives all day long why they will not talk about expanding it and actually moving forward with an investigation. Is it because one of the former Conservative cabinet ministers is a senior managing director at Deloitte?
Will they comment on why the corporate-controlled parties are working together so that we do not have a full investigation into the outsourcing spending by both of these parties, which is out of control?
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- Feb/27/24 3:04:02 p.m.
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Mr. Speaker, the reliance on dubious consultants is not limited to ArriveCAN or to the Liberals. Under Stephen Harper, the Conservatives themselves gave millions of dollars to Coredal Systems Consulting, a company that does not provide any services and that was founded by the same two people who founded GC Strategies and who pocketed $20 million for ArriveCAN. Fortunately, the committee will investigate all of the contracts awarded to these two individuals, but we need to go even further.
Will the government commit to disclosing all of the contracts since 2004 that connect the Conservatives and the Liberals to any company that does not provide any service other than finding subcontractors?
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- Feb/27/24 3:39:46 p.m.
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Madam Speaker, it is true that consulting services have ballooned over the last eight years we have been in power, but we have to be able to clearly explain to Canadians why this has happened. It has happened because our government has a very clear vision around where we want to take Canada. For that to happen, we need to make sure that as we transition our department and roll out a digital strategy, we have the best practices and the benchmarks to be able to ensure the pathway we develop for that transition is the right pathway. Where most of these consulting services have gone is to making sure we understand which jurisdictions are the best, where we need to benchmark and get data, and how to develop a path forward. That is where the money has been spent, and that is where the value of the money is, because we have a clear vision of where we want to take Canada.
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- Feb/27/24 3:55:16 p.m.
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Madam Speaker, when we came to government in 2015, the Conservatives had cut so many budgets and so many employees that we needed to bring in folks with subject matter expertise so that we could provide the services that Canadians needed, to make sure that we had services.
We could go through a litany of cuts that were done by the past Conservative government. They are all listed there. Colleagues can look at the public accounts and so forth as to the number of people laid off and budget cuts made in some departments, including the CBSA. The Conservative were the best at cutting, “cut, cut, cut” as some of our ministers have said. We needed to bring in subject matter expertise, which a lot of these consulting firms have. Sometimes we do need that. We understand that.
We will always have the backs of middle-class Canadians in my riding and across this country.
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- Feb/27/24 4:21:54 p.m.
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Madam Speaker, the word that comes to mind is “wow”. That is quite the extreme statement coming from the member. So much for facts. I hope he does not believe 90% of the things he said.
The question that comes to mind is this. I wonder whether he would hold the very same standard to his own leader, who was responsible for the issuing of millions of dollars in contracts to Coredal Systems Consulting Inc., the very same people who are with GC Strategies. Would he apply the same principles to the leader of the Conservative Party of Canada that he is applying to others? Maybe he should skip the character assassinations and focus on the issue.
If he is not going to answer that question, maybe he could offer an idea from Conservatives as to how we can improve the procurement process.
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- Feb/27/24 4:23:31 p.m.
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Madam Speaker, I have the pleasure of working with my colleague at the Standing Committee on Government Operations and Estimates and since October 2022 we have been studying the issue of ArriveCAN, with its tens of thousands of pages to read. It is fascinating.
A notice of motion was introduced about Coredal Systems Consulting, which had the same owners as GC Strategies. I wonder how many other businesses we should be looking into.
Does my colleague think that the system that was exposed through ArriveCAN might be even bigger and more widespread than we might think?
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- Feb/27/24 5:09:32 p.m.
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Madam Speaker, the member did good in terms of the lines, so the programming worked in that sense, I must say.
My question to the member is about something I raised previously with respect to his own leader. The leader of the Conservative Party was the minister ultimately responsible for millions of dollars' worth of grants that went to Coredal Systems Consulting, which is the same company as GC Strategies with just a change in name. The same two individuals are involved in both companies.
Does he believe this should also be considered? Many constituents who we represent are wondering how two individuals get to the point where they were able to do what they did through the procurement process. I think that going back to the origins of the company would be a good thing.
Would he not agree?
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