Special Committee on the COVID-19 pandemic: June 9, 2020

Date: June 9, 2020

Easing of restrictions and planning a safe return to the workplace

Context

A large proportion of the public service has transitioned to working from home during the COVID-19 pandemic. Government offices remain open and have been maintained for essential and critical workers to support Government of Canada efforts nationally. This situation is now evolving as some key service functions are incrementally increasing their presence in offices while remaining guided by regional public health agencies.

Suggested response

• Public Services and Procurement Canada (PSPC) is committed to providing its clients and employees with healthy and productive work environments
• While physical distancing and telework provisions are reducing general occupancy rates in our buildings at this time, we recognize that, in the future, occupancy levels will begin to increase
• Preparatory measures for easing of restrictions and planning a safe return to the workplace are underway such as the maintenance and operation of building water systems, adjusting Heating Ventilation and Air Conditioning (HVAC) systems to promote occupant wellness, and preparing workspaces to reflect physical-distancing measures
• PSPC is working with client departments to determine their workplace requirements for additional supplies such as hand sanitizer, disinfecting wipes and other protective equipment as required within the workplace
• We continue to consult with bargaining agents, liaise with the Treasury Board Secretariat for employer guidance and Health Canada to determine appropriate cleaning and building maintenance protocols for our buildings during the COVID-19 pandemic

If pressed on telework arrangements:

• Easing of restrictions and planning a safe return to the workplace will count on retaining a significant telework component as gradual increased office presence proceeds
• We continue to improve network infrastructure and bandwidth, and have been providing employees with mobility tools such as laptops, mobile phones and virtual collaboration platforms to ensure continued program delivery

If pressed on Government building HVAC systems spreading COVID-19:

• We are committed to providing our building occupants with productive and healthy workplaces
• Public Health Agency of Canada (PHAC) has indicated that the virus is not known to spread through ventilation or water systems
• The department continues to ensure that building systems including HVAC systems are properly operated and maintained to ensure healthy work environments
• Air that is distributed into the occupied spaces by central HVAC system(s) promotes appropriate air circulation and the removal of fine particles that are suspended in the air
• In response to COVID-19 we have implemented additional HVAC measures to enhance occupant wellness in our buildings. These measures are in keeping with industry guidance and consultation with Health Canada
• PSPC will continue to monitor ongoing research in this area and be prepared to implement, if required, new measures that are supported by science, for reducing the transmission of COVID-19 in our buildings

Background

PSPC continues to expand its body of guidance to departments to support them in their plans for easing of restrictions and planning a safe return to the workplace.

Easing of restrictions and planning a safe return to the workplace plans are being elaborated based on the client’s nature of work, the functions to support services provided to Canadians, and the current configurations of workplaces. The implementation of key practices include physical distancing for workstations, gathering rooms, and pathways for circulation within the work areas along with enhanced sanitation measures for workers including hand sanitizer and wipes for workspaces supported by guidelines recommended by the public health authorities Further, as other key employment infrastructure elements progressively resume, such as small businesses, schools and daycares, easing of restrictions and planning a safe return to the workplace strategies will continue to require balancing office work with teleworking, sustaining and improving network infrastructure and bandwidth, and providing employees with access to mobility tools such as laptops, screens, mobile phones and virtual collaboration platforms to ensure continued program delivery.

Next steps

The department continues its engagement with central agencies, clients and our bargaining agents to collaborate on guidance. PSPC will also continue to advance procedures to ensure healthy and productive work environments for the easing of restrictions and planning a safe return to the workplace in our buildings as guidance evolves.

Media article on the spread of COVID-19 through ventilation systems

Several news articles have referenced a Chinese study that was done on individuals who contracted COVID-19 while at a restaurant. The restaurant had a wall mounted air conditioning unit above a table with infected individuals that was blowing high velocity air into the rest of the restaurant.

Such high velocity air could transport and spread droplets that are released by infected individuals near the air conditioning unit beyond a 2 meter area of physical-distancing. The mode of transmission for infection in this case is droplet spread that was influenced by the high velocity air from the wall mounted air conditioning unit. Since the samples taken from the air conditioning unit were negative for the virus and none of the other diners or staff were infected, airborne (i.e. aerosol) transmission was unlikely.

Unlike the air conditioning system referenced in the Chinese study, the HVAC system(s) in PSPC buildings typically are centrally located and do not distribute air into the occupied zone at high velocity. The air that is distributed into the occupied spaces by the central HVAC system(s) promotes appropriate air circulation and removal of fine particles that are suspended in the air.

In response to COVID-19, PSPC has implemented the following additional HVAC measures to enhance occupant wellness in our buildings.

These measures are in keeping with industry guidance and consultation with Health Canada:

• Increasing the amount of outdoor air being provided to the space above code requirements
• Increasing the hours of operation of the HVAC systems to promote increased dilution of contaminants and improved air circulation that promotes removal of fine particles
• Ensuring appropriate temperature and humidity levels in occupied spaces to promote occupant comfort and wellness
• Ensuring appropriate filtration is installed
• Ensuring that there is no potential cross contamination between washroom exhaust air and ventilation airflow

National Capital Region bridges

Context

Budget 2019 provided funding to replace the Alexandra Bridge, to refresh studies on a 6th crossing, to develop a long-term integrated interprovincial crossing plan and to support rehabilitation and ongoing maintenance of existing National Capital Region (NCR) crossings.

Suggested response

• The government will continue to improve crossings in the NCR
• Work is advancing on Budget 2019 commitments to replace the Alexandra Bridge, and we are addressing the demonstrated need for an additional NCR crossing with a long-term integrated interprovincial crossing plan led by the National Capital Commission (NCC)
• As well, we are investing to rehabilitate and maintain the crossings, including the Chaudière and Macdonald-Cartier bridges

If pressed on a 6th crossing:

• The intention is to move forward with the planning of a new 6th crossing which will help reduce congestion, improve fluidity and increase transportation options throughout the region
• Public Services and Procurement Canada (PSPC) and the NCC awarded contracts to WSP Canada Group Limited to provide a concept design and costing report, and refresh technical studies. All reports were finalized in May 2020. A summary is expected to be made public shortly

If pressed on replacing the Alexandra Bridge:

• A 2018 Life Cycle Cost Analysis looked at the options for investing in the Alexandra Bridge over the long term
• The study determined that replacing the bridge would be less disruptive to the public than trying to maintain the existing bridge, while also more cost effective
• Given this, PSPC has begun activities related to planning, environmental assessment and design, to replace the bridge
• Planning, design and construction of a new crossing to replace the Alexandra Bridge is expected to take 10 years. In the meantime, inspections and repair work continue to ensure the bridge remains safe and accessible for pedestrians and cyclists until its replacement

If pressed on the program of work:

• PSPC is working closely with the NCC and the Cities of Ottawa and Gatineau, to ensure that federal bridges in the NCR are safely and effectively serving Canadians, and that lane closures are properly co-ordinated

If pressed on the long-term integrated interprovincial crossings plan:

• The NCC is responsible for the long-term integrated Interprovincial Crossings Plan, in collaboration with the City of Ottawa, la Ville de Gatineau, provinces of Ontario and Quebec, transit authorities, and other stakeholders
  • To ensure success of the crossings plan, the NCC amended content of the initial tender based on comments received from stakeholders and re-launched the Request for Proposals for the long-term integrated Interprovincial Plan. A contract was awarded in Spring 2020 and work is progressing well

Background

There are five crossings in the NCR. PSPC manages and operates Alexandra Bridge (built in 1900), Chaudière Crossing (portions built in 1828, and Union Bridge built in 1919) and Macdonald-Cartier Bridge (built in 1965). The NCC manages and operates the Champlain Bridge and the Portage Bridge.

The five crossings are currently at full capacity at peak travel periods (average daily traffic on all crossings: 187,000 vehicles daily; 9,000 using active transportation). Transportation studies conducted over the last ten years have consistently shown that the existing Ottawa River crossings and connecting roadways are at full capacity during morning and evening peak travel times.

Alexandra Bridge condition

A 2017 third-party Life-Cycle Cost Assessment concluded that replacing the 118-year-old Alexandra Bridge is the most cost-effective alternative, as it will have reached the end of its life span within the next ten years. A recent structural evaluation of the bridge (completed in March 2020) revealed that due to the deterioration of several bridge members, load restrictions were required. A recent inspection revealed that certain of those bridge members required urgent temporary repair, requiring the closure of the bridge to vehicular traffic until the repairs were completed on May 24, 2020. Other repair projects are planned and will be completed to ensure the bridge remains safe and accessible for pedestrians and cyclists until its replacement.

Sixth crossing

Budget 2019 announced that the Government of Canada will address the ongoing need for a 6th interprovincial crossing in the NCR. PSPC is currently working with the NCC to refresh studies. A 6th crossing would help to reduce congestion, improve fluidity and increase transportation options throughout the region.

Long term integrated interprovincial crossings plan

Budget 2019 also announced that PSPC would be working with NCC to develop a long term integrated interprovincial crossings plan. The result of this plan will be a long-term strategy with a vision and approaches for all parties to build on past successes and move forward to meet new and emerging challenges. The plan will set long-term targets as well as provide options on how we may achieve the vision, and address the following:

• Sustainable choices of interprovincial mobility
• Regional transition toward low-carbon and climate-resilient mobility networks/systems
• Improving interprovincial mobility of people and “people capacity”
• Alternatives for interprovincial heavy truck movement in the core area

Timing

We are at the preliminary phases of Alexandra Bridge replacement and the Sixth crossing projects:

• PSPC and the NCC are working to develop a project brief to support the environmental assessment of the Alexandra Bridge replacement
• Thirteen studies conducted in 2013 have been refreshed and cost estimates have been updated based on refined design concepts, as well as partial costing information

Other bridge projects

In addition to the studies and projects listed above, the government will support the rehabilitation and ongoing maintenance of NCR crossings, including the Alexandra Bridge, Chaudière Crossing and Macdonald-Cartier Bridge, by providing up to $80.4 million over 10 years.

Energy Services Acquisition Program

Context

On June 4, 2019, the Government of Canada announced that on May 31, 2019 it entered into a contract with a Public-Private Partner (P3) for the modernization of the district energy system in the National Capital Region (NCR). Innovate Energy will complete the design and construction by 2025 and will operate the system until 2055.

Suggested response

• The Government of Canada is committed to reducing greenhouse gas emissions which includes leading by example to green its own operations
• This initiative aims to improve the overall efficiency and cost-effectiveness of the heating and cooling infrastructure that supplies federal buildings in the NCR
• The project is expected to reduce operating costs for the Government of Canada over the 35 year life of the operations and maintenance contract
• Modernizing the district energy system will reduce greenhouse gas emissions in 80 buildings located in the NCR by over 60 percent compared to our 2005 baseline

If pressed on timelines and budget:

• Construction began in May 2020 and is expected to end in October 2025
• At present, the Phase I modernization project is on time and on budget despite the fact that work started one month later than planned due to the COVID-19 Ontario ban on construction
• The project is expected to reduce operating costs for the Government of Canada over the 35 year life of the operations and maintenance contract

Background

As the federal authority for real property, Public Services and Procurement Canada (PSPC) is responsible for the delivery of essential heating services to 80 federal buildings in the NCR and cooling services to 67 of these buildings, including mission-critical sites within the Parliamentary Precinct. As such, PSPC operates five central heating and cooling plants (CHCPs) which were designed and built from 1916 to 1971.

In 2009, Energy Services Acquisition Program (ESAP) was established to explore potential new business models for the provision of energy services in the NCR. In 2018, PSPC issued a Request for Proposal for the modernization of the heating and cooling energy service capability.

Budget 2016 reaffirmed Canada’s commitment to modernizing the delivery of heating and cooling services by implementing more efficient technologies. This will reduce both long-term costs for Canada and greenhouse gas (GHG) emissions. In addition, the new technology will enable Canada to explore the feasibility of using alternative “low or no carbon” sources of energy, the adoption of which could further reduce GHG emissions.

For this project, Canada selected Innovate Energy through competitive tender, to be the Private Partner that will deliver a technologically superior and efficient solution on time and in a manner that ensures the best value for Canadians.

The contract is valued at $2.6 billion and is broken down into two parts. The first, valued at $1.1 billion, is for the design and construction of the new system, to be completed by 2025. The second portion is for the operation and maintenance, which includes energy and fuel costs, of the new system over a 35 year period, valued at $1.5 billion.

Design has been initiated, construction began in May 2020 and is expected to end in October 2025. At present, the Phase I modernization project is on time and on budget despite the fact that work started one month later than planned due to the COVID-19 Ontario ban on construction. The project is expected to reduce operating costs for the Government of Canada over the 35 year life of the operations and maintenance contract. Precise cost savings will be recalculated once Phase II determines greener sources of energy for the District Energy System and after the Phase I construction period is completed.

Canada has taken all steps necessary to ensure that the procurement process for the Project was open, fair and transparent. The public private partnership contract with Innovate Energy was finalized in May 2019.

Due to the modernization of the NCR heating and cooling plants under ESAP, several plant employees’ services are no longer required due to discontinuance of their particular functions.

PSPC is following the guidelines outlined in the Work Force Adjustment (WFA) agreement and will support all employees through their transition to new roles emerging within the service management areas.

Each employee will have the support of their union and human resource services in PSPC to ensure that they have all the information necessary to understand their available options based on their career objectives and specific circumstances.

Developing long-term employment opportunities for people in the Ottawa-Carleton Association for Persons with Developmental Disabilities

Context

A new contract was awarded on April 1 to allow participants involved in the Paper Sorting Services contract, a sub-component of the Government of Canada’s Paper Save program, to continue employment following the end of Employment and Social Development Canada’s contract with the Ottawa-Carleton Association for Persons with Developmental Disabilities (OACPDD). The new contract is for the sorting of surplus office supplies to divert items from landfills.

Due to COVID-19, this work was suspended, but ongoing efforts are being made to ensure work will be ready for participants once operations can safely resume.

Suggested response

• The Government values the contributions of the persons with developmental disabilities in the PaperSave program
• Since the end of that arrangement, a new contract has been put in place that provides participants with employment sorting surplus office material to divert items from landfill
• Due to the ongoing public health measures, work has been temporarily suspended. However, planning is underway for work to resume when it is safe to do so

If pressed on whether or not participants are being paid:

• Due to ongoing public health measures, the OCAPDD was initially paid to retain participants in the program, as employment insurance (EI) was deemed to not be an accessible option for many of them
• At the end of April, program participants began to access the Canada Emergency Response Benefit
• Regular pay was temporarily halted so that participants could remain eligible for this increased benefit

Background

Public Services Procurement Canada (PSPC) is leading in the placement of participants. Employment and Social Development Canada (ESDC) assumed the contract with the OCAPDD for paper sorting from Library and Archives Canada in March 2015. The original three-year contract allowed for two optional one-year extensions that would allow the contract to continue until March 2020.

Under this contract, OCAPDD ran the paper sorting services as a sheltered workshop. Participants in their program received a nominal payment of $1.20 an hour to sort the paper in a supported environment made up solely of persons with developmental disabilities.

In the past, paper was sorted by quality prior to recycling because higher quality paper fetched a higher price on the recycling market. Changes in technology and a decline in the market for recycled paper has negated the financial benefits of sorting prior to recycling.

Since June 2019, the Government has been working with OCAPDD to seek suitable opportunities for participants from the paper sorting program in government departments located in Tunney’s Pasture.

On February 28, PSPC officials met with OCAPDD to propose a new work stream for participants. As part of the decommissioning of surplus office materials within Place du Portage, Phase III, a waste diversion program is underway. The new work stream would see OCAPDD participants sort surplus office waste such as binders, small electronics, staplers, and hanging folders. These items were once office staples and have become obsolete with shifts toward digitization and paperless/paper-light work environments. This work will allow for these items to be re-used, sold (via GCSurplus should items have a re-sale value), donated, recycled or become waste only as a last resort. To date, the decommissioning of surplus office materials within Place du Portage, Phase III has exceeded its target with more than 98% waste being diverted from landfill.

A one-year pilot of this new work stream is currently underway, during which its longer-term viability will be evaluated.

Rehabilitation of the Supreme Court of Canada and the West Memorial Buildings

Context

From 2019 to 2023, the West Memorial Building (WMB) will undergo rehabilitation in order to meet the standards of the National Building Code of Canada.

Once rehabilitation is complete, the WMB will temporarily accommodate occupants of the Supreme Court of Canada Building (SCCB) from 2023 to 2028, as the SCCB undergoes its own rehabilitation.

Suggested response

• The Government takes the integrity and safety of its heritage buildings seriously
• Over $1 billion is being invested in the Supreme Court of Canada and the West Memorial Buildings’ rehabilitation
• This investment will also create jobs for the middle class by creating employment opportunities for Canadians in construction, manufacturing, and professional services
• Construction started in April 2020 and the COVID-19pandemic situation has had minimal impact on the project schedule

If pressed on current building conditions:

• All measures to ensure the continuous delivery of operations in the SCCB are in place, including the monitoring of key building components and pursuing the urgent repair and maintenance

Background

The WMB has been vacant since 2008 and requires major rehabilitation in order to meet the standards of the National Building Code of Canada. Work began in fall 2019 and will include upgrades to meet current building standards for sustainability, health and safety, and accessibility, while at the same time conserving its heritage character.

The selection of the WMB for rehabilitation makes sense as it will allow a vacant classified federal heritage building, within the downtown Ottawa area to return to the active federal real estate portfolio.

From 2019 to 2023, the WMB will undergo its rehabilitation. It will serve as an interim space for occupants of the SCCB from 2023 to 2028 The SCCB rehabilitation will take place from 2023-2028 once the occupants have moved into the WMB.

The contract award to EllisDon Corporation for construction management services was announced on October 26, 2018, and the contract to Moriyama & Teshima Architects and Kasian Architecture Interior Design and Planning Ltd. for design and architectural services was announced on February 23, 2018, for the WMB rehabilitation project.

Demolition started in October around the site. A City of Ottawa permit was received and construction started in April 2020. COVID-19pandemic situation has had minimal impact on the project schedule.

Canada Post Corporation 2019 Annual Report

Context

On May 20, 2020, Canada Post Corporation released its 2019 financial results and recorded a loss before tax of $153 million.

Suggested response

• Canada Post has a long-standing mandate to serve all Canadians while remaining financially self-sufficient
• Fulfilling this dual mandate is a challenge that the company is addressing, as it invests and evolves to meet the changing needs and expectations of Canadians

If pressed on the $153 million recorded loss before taxes:

• Transaction mail and direct marketing continued to decline as Canadians communicate, transact and advertise more by digital means
• In 2019 prior to COVID-19, Canada Post’s parcels business continued to grow but at a slower pace than 2018, as competition in e-commerce delivery intensified
• Parcels revenue surpassed transaction mail revenue for the first time, and Canada Post remained the country’s leader in e-commerce delivery

Background

Key results for the Canada Post segment in 2019 compared to 2018:

• Parcels:
  • Parcels revenue surpassed transaction mail revenue for the first time, and Canada Post remained the country’s leader in e-commerce delivery
  • Total Parcels revenue increased by $232 million compared to 2018, exceeding $2.7 billion
  • Revenue for domestic parcels increased by $204 million or 11.0% over 2018, while volumes increased by 26 million pieces or 13.2% compared to 2018
  • During the 2019 peak season, Canada Post set records by delivering more than 2 million parcels in a single day three times, and 1.1 million parcels on a single weekend
• Transaction mail:
  • Transaction mail revenue decreased by $69 million or 2.5%, and volumes fell by 192 million pieces or 6.4%
  • Transaction mail generated more than $2.7 billion in 2019, or 40% of the Canada Post segment’s revenue (it was 55% in 2006, the peak year for transaction mail volumes)
• Direct marketing:
  • Direct marketing revenue decreased by $32 million or 3.0%, and volumes fell by 75 million pieces or 1.6%
  • The direct marketing line of business generated $1.1 billion or 16% of the segment’s revenue in 2019

Rehabilitation of National Capital Commission assets including 24 Sussex and Harrington Lake

Context

The Official Residences of Canada: Asset Portfolio Condition Report, identified a requirement for a one-time injection of $83 million over 10 years to address the deferred maintenance deficit for all six official residences and ensure that the official residences meet universal accessibility and sustainability requirements. Note: the numbers in the asset condition report represent recommended and projected investments based on 2017 asset values, not actual expenditures/commitments/planned spending by the National Capital Commission (NCC).

Suggested response

• The NCC is an independent Crown Corporation and is responsible for year-round maintenance and operations for the six official residences in Canada’s National Capital Region (NCR)
• The NCC recognizes the significance of the official residences and are committed to working with its partners to ensure that issues related to security, heritage preservation, sustainability, and accessibility are addressed
• The NCC is working with federal partners to develop a plan for the future of 24 Sussex to enable the Government to make a prudent and informed decision
• Our goal is to ensure that all aspects of the rehabilitation are taken into consideration, including security, functionality, accessibility, design excellence and heritage preservation

If pressed on Harrington Lake rehabilitation costs:

• The NCC’s work at Harrington Lake is part of a broader program to preserve, maintain and restore all official residences under NCC management
• We will continue to support the NCC in its important work

If pressed on the NCC’s Asset Portfolio Condition Report:

• Both the Government of Canada and the NCC recognize the importance of official residences of Canada, their heritage and cultural value
• That is why the NCC commissioned the 2018 report entitled Official Residences of Canada: Asset Portfolio Condition Report, detailing the investment required for the restoration of several of Canada’s official residences
• The NCC released this report in 2018 to remain transparent and open with both the Government of Canada and the Canadian public
• The NCC is committed to working with its partners to ensure that issues related to security, heritage preservation, sustainability, and accessibility are addressed
• We will continue to support the NCC in its important work

Background

Official Residences of Canada Asset Portfolio Condition Report

In 2017, the NCC commissioned in-depth building condition reports for the largest and most complex buildings in the Official Residences portfolio. These reports found that 58% of the assets in the official residences portfolio were considered to be in ‘poor’ to ‘critical’ condition, including half of the main official residences (24 Sussex and Harrington Lake main cottage are in critical condition while the Farm is in poor condition). The complete report, Official Residences of Canada Asset Portfolio Condition Report, was endorsed by the NCC Board of Directors in April 2018 and publicly released in October 2018.

The report reflects an in-depth analysis of the official residences asset portfolio and highlights the shortfall in funding required to restore and maintain these heritage buildings

24 Sussex

On October 16, 2018, the NCC released the Official Residences of Canada: Asset Portfolio Condition Report, which found that 24 Sussex Drive was in “critical” condition. The report identified a requirement for a one-time injection of $83 million over 10 years to address the deferred maintenance deficit for all six official residences, and a further $24.6 million annually for ongoing maintenance, repairs and renovations. The implementation of this 10-year recapitalization plan would also need to consider the investment required to ensure that the official residences meet universal accessibility and sustainability requirements, as well as escalation.

Over the last decade, the NCC has completed significant work at 24 Sussex including the rehabilitation of chimneys and fireplaces, fire compartmentalization, stabilization of the escarpment at the back and west sides of the property and the removal of hazardous materials from the main building. However, it has not been able to proceed with the extensive rehabilitation of the residence and has been limited to completing work on the repairs relating to health and safety that were urgently required.

As 24 Sussex Drive has not seen significant investment in over 60 years, the additional work required would include the rehabilitation of the building envelope, mechanical and electrical systems, all buildings on the site would require extensive recapitalization and NCC would need prolonged access to the residence.

Construction activities on the main residence would allow for the abatement of hazardous materials, retention of certain heritage components, improvement in the building envelope, replacement of mechanical and electrical systems, construction of universally accessible entrances and washrooms, creation of dining facilities and support spaces to accommodate state functions.

Harrington Lake

While the Main Cottage at Harrington Lake is 95 years old, most of the buildings were built between 1850 and 1925.  Harrington Lake, the official country residence of the Prime Minister, is used for both official and private functions, with buildings that can accommodate official business as well as state visits.

Harrington Lake last saw major capital investment during the 1950s (over 60 years ago); the property has not seen any investment since 2005, when the NCC made critical repairs to the roofing, eavestroughs, piping, electrical, mechanical and structural systems of the property.

The Harrington Lake property was deemed to be in critical condition in the NCC’s 2018 Official Residences of Canada: Asset Portfolio Condition Report (see pages 38 to 43).

Phoenix overall queue and backlog decrease

Context

This note focuses on the ongoing reduction of the overall queue and backlog, implementation of collective agreements, taxes, overpayments and underpayments.

All questions related to Next Generation pay solution should be directed to the President of the Treasury Board.

Suggested response

• Employees deserve to be paid accurately and on time
• Resolving pay issues is a top priority and thanks to the hard work of our compensation employees we continue to see a steady decline in the backlog
• As of May 27, 2020, the number of transactions waiting to be processed at the Pay Centre has decreased by 49% since the peak of January 2018, representing a reduction of 310,000 transactions from 633,000 to 323,000
• Over the same period of time, the backlog of transactions with financial implications has decreased by 64%, representing a reduction of 247,000 transactions, from 384,000 to 137,000
• We have also processed more than $2.4 billion in collective agreement retroactive payments to employees

If pressed on overpayments:

• Our priority is to support employees and resolve public service pay issues as quickly as possible
• As part of our COVID-19 measures, employees who have agreed on a repayment plan but now need to revisit it can contact the Client Contact Centre to discuss available options
• The Pay Centre has also suspended all new recoveries of overpayments that are eligible for flexible repayment measures
• The work to resolve pay issues is progressing with care as we recognize that unresolved pay issues represent undue stress and hardship for our employees and their families
• We continue to work with departments and agencies to improve the timeliness and accuracy of HR data submitted to the pay system, which helps to prevents new cases

If pressed on taxes:

• For the 2020 tax-filing season, we built on lessons learned and implemented a more robust plan to issue accurate tax slips and assist employees
• The 2019 Year-End Tax plan includes robust testing, dry runs, and improved communication of year-end information to the Compensation community and employees
• Tax slips for 2019 were released to federal employees on a staggered schedule by the legislated deadline of the end of February 2020

Background

Queue and backlog

In total, as of May 27, 2020, there are approximately 323,000 transactions ready to be processed at the Pay Centre, including 137,000 with financial impact beyond the normal workload.

As of May 27, 2020, the overall queue of transactions waiting to be processed has decreased by 49% since its peak in January 2018, representing a reduction of 310,000 transactions (from 633,000 to 323,000)

Over the same period of time, the backlog of transactions with financial implications has decreased by 64%, representing a reduction of 247,000 transactions (from 384,000 to 137,000).

2020 tax-filing season

The 2019 year-end tax plan includes clear direction on robust testing, completion of dry runs, quality and integrity verification of data, implementation of the tax updates, as well as communication of year-end information to the Compensation community and employees. Tax slips for 2019 were released to federal employees on a staggered schedule by the legislated deadline of the end of February 2020.

Public Services and Procurement Canada (PSPC) continues to actively work with departments and agencies to communicate with employees who may receive amended tax slips because of outstanding issues with their pay file.

The total volume of amended tax slips for 2018 was significantly lower than in the previous year. As of January 2020, there were approximately 40,000 amended tax slips produced for 2018 compared to 213,000 for 2017.

Under current legislation, the Canada Revenue Agency (CRA) ceased to automatically review amended T4s for 2016 in January 2020. Employees will need to request reassessments, which CRA has agreed to facilitate. Communications for employees were sent and more are being developed.

Overpayments

As of December 5, 2019, it is estimated that just over 98,200 individuals potentially owe the government money as a result of an overpayment.

As the Phoenix pay system cannot segregate true overpayments from administrative overpayments, it is not possible to accurately provide specific figures for true overpayment, which represent money owed to the government.

Administrative overpayments are part of the system’s design and are not a technical issue. They have no impact on employees considering that refunds are automatically generated and netted out in the next pay period. Administrative overpayments are created to ensure employees receive the pay to which they are entitled.

In recognition of extraordinary challenges due to the backlog, recovery of most overpayment balances will not begin until all of the employee’s outstanding pay transactions have been processed; the employee has received three consecutive accurate pays; and the employee has indicated their preferred repayment option.

To note, these flexibilities do not apply to routine operations – for example, Leave Without Pay (LWOP) of five consecutive days or less is recovered from first available funds.

It is important to note that when PSPC reports a balance of overpayments, the figure includes both true overpayments and administrative overpayments. True overpayments represent employees receiving pay that they are not entitled to, whereas administrative overpayments are part of the system’s design and have no impact on employees.

Underpayments

Employees who have been underpaid can request emergency salary advances or priority payments from their departments.

Unpaid amounts owed to employees can be related to several factors. They can result from regular pay transactions such as overtime and acting pay that are not yet processed or due to errors.

Underpayments are not automatically tracked in the Phoenix pay system because it is impossible to obtain these figures accurately until all backlogged pay related transactions are processed by compensation advisors.

Collective agreement implementation – 2014 and 2018 contracts

With regard to the 2014 round, there are currently 126 Treasury Board Secretariat and separate employer’s agreements and salary rate updates that have been processed, representing more than $2.4 billion in payments to employees.

To ensure retroactive payment amounts are accurate, PSPC is conducting a manual review of almost 180,000 accounts. This manual work is on track to be completed in Fall 2020.

In August 2019, the first of the 2018 round of collective agreements were signed. The implementation of a number of these collective agreements is underway.

Lessons learned from the implementation of the 2014 round of bargaining allowed PSPC to collaborate with departments and agencies, and bargaining agents to simplify processes, improve accuracy of payment and reduce the need for manual work.

We expect that only 5 per cent of the 2018 round of collective agreement transactions will need manual intervention, resulting in a reduction of hundreds of thousands of manual transactions.

In comparison, the 2014 round required compensation advisors to manually process and validate more than 60 per cent of collective agreement transactions.

TBS is responsible for engagement with PSPC, employees and unions on collective and compensation agreements. PSPC is working with TBS to identify options that will ensure the next round of collective agreements is processed in an efficient and timely manner.

Phoenix IBM and systems upgrades

Context

This note focuses on vendor support on the Phoenix file (IBM / Innovation Challenge) as well as the Phoenix pay system software upgrade (PeopleSoft 9.2).

Note: All questions related to Next Generation pay solution should be directed to the Minister for Digital Government.

Suggested response

• The Government of Canada is committed to supporting employees and resolving public service pay issues as quickly as possible
• We are reaching out to experts, federal public sector unions and the private sector for innovative solutions to help stabilize the pay system
• The Government has also launched a procurement process to engage the private sector in innovative solutions to further help stabilize the pay system

If pressed on the Invitation to Qualify for pay system in-service support / Application Managed Services Contract:

• On May 8, 2020, Public Services and Procurement Canada (PSPC) issued an Invitation to Qualify (ITQ) for operational support for the pay system
• This procurement process is required to ensure Phoenix is supported after the current contract with IBM ends in March 2022 (if option is exercised)
• An independent fairness monitor has been engaged to observe and report on the procurement process to ensure its integrity. Results of the ITQ are expected in July 2020
• We will continue to ensure employees are supported and that we are well prepared to transition to a new pay system when the time comes

If pressed on the upgrade to the Phoenix system:

• As part of its continued efforts to stabilize the pay system, the Department is proceeding with a Phoenix pay system software upgrade from PeopleSoft 9.1 to 9.2
• The upgrade is needed to ensure ongoing vendor support and updates which are required to calculate pay accurately and on time
• We have an extensive implementation plan in place, based on the lessons learned from the Phoenix rollout, so that employees are not affected by this upgrade
• This upgrade, expected to go live in spring 2021, will not affect or require upgrades to the 30+ HR systems that feed into Phoenix

Background

IBM contract and amendments

In June 2011, IBM was awarded the contract for the new Pay System through an open and transparent bidding process. Since then, there have been 48 amendments to the original contract, for a total contract value of $447 million (taxes included). Amendments are a regular part of the contract management process and were anticipated at the time of contract award.

The most recent amendment was issued in March 2020, and was required to exercise options for software maintenance and to continue support services essential for pay stabilization and PeopleSoft version 9.2.

In service support – Re-procurement

The current Application Managed Service Contract with IBM Canada Ltd. will end on March 31, 2021. It has an option year until March 31, 2022, which provides the Government of Canada a transition period towards a future state.

Application Managed Services is an outcomes-based agreement where the contractor is responsible for delivering services based on our requirements, and ensuring the Government of Canada receives what it needs for a fixed price.

On May 8, 2020, PSPC issued an ITQ on Buyandsell.gc.ca to qualify suppliers interested in providing the Application Managed Services for 24/7 operational (functional and technical) support for pay, once the current contract with IBM Canada Limited ends. An independent fairness monitor has been engaged to observe and report on the procurement process to ensure its integrity.

We will need to rely on Phoenix until we are ready to transition to a new pay system, which could take a few years. The backlog of existing pay issues must also be addressed to allow for a smooth transition to any new pay system. This is the main reason why the Government of Canada is still investing in Phoenix— so that employees continue to be supported and to ensure that we are well prepared to transition to a new pay system when the time comes.

Notice of proposed procurement

PSPC launched a procurement process in August 2018 to engage the private sector in innovative solutions to help stabilize the pay system.

Industry has been consulted in several areas identified as key to reaching stabilization. These are:

• Robotic process automation: two contracts were awarded in March 2019. A contract extension was awarded to KPMG on November 8, 2019 for Phase II work. This involves implementing the solutions that KPMG proposed under Phase I to automate manual pay processes
• HR processes
• Lowering the queue: Two contracts were awarded in May 2019
• Improving user experience
• Enhanced user access management
• Training
• Accelerator services: A contract was awarded in February 2020
• PSPC is currently re-evaluating the remaining challenge categories against current and future requirements

Phoenix system upgrade (PeopleSoft 9.2)

The upgrade to PeopleSoft 9.2 will ensure that PSPC continues to receive software patches, fixes, and tax rate updates that Phoenix requires to generate payroll accurately.

The PeopleSoft 9.2 upgrade consists of implementing a new version of the PeopleSoft application with limited impact and disruption to operations and users. The scope of the project is limited to the pay system (Phoenix) and does not include upgrading the departmental HR Systems. Extensive testing is currently being performed with departments and agencies to ensure that employees’ pay is not impacted when the upgrade is launched.

PSPC estimates that the overall upgrade is expected to take approximately 24 months (including the planning phase) with a target go live in spring 2021. Through Budget 2018, the Department has secured $22.1 million in funding for the upgrade to PeopleSoft 9.2.

Update on Phoenix stabilization planning, investments and employee support

Context

This note focuses on the efforts and progress to stabilize the Pay System, support employees, as well as financial investments in Phoenix.

Notes:

• Questions related to the Next Generation Human Resources and pay solution should be directed to the Minister of Digital Government, responsible for Shared Services Canada
• Questions related to the mental health for public servants should be directed to the Treasury Board Secretariat (TBS)

Suggested response

• Supporting employees facing pay issues and making sure they are paid accurately and on time is a top priority
• As part of our ongoing efforts we have increased our compensation workforce four-fold since 2016, to more than 2,300 employees
• We have ensured public servants facing pay problems have access to emergency payments
• We have also focused efforts on priority files such as parental leave, disability leave, student pay and collective agreements implementation
• We have introduced MyGCPay to all departments and agencies. MyGCPay is a new web application that provides employees with a centralized and simplified view of their pay and benefits
• We continue to build strong partnerships between departments, unions and all stakeholders so that pay transactions can be processed quickly and accurately

If pressed on specific measures for COVID-19:

• Pay services are essential, and we have the resources in place to make sure they are operating without interruption
• The Client Contact Centre (CCC) remains available to assist any current or former public servant experiencing pay issues
• We recognize that the recovery of overpayments can be a source of stress for employees, even more so now given the current circumstances
• Employees who have agreed on a repayment plan but now need to revisit it can contact the CCC to discuss available options
• The Pay Centre has also suspended all new recoveries of overpayments that are eligible for flexible repayment measures
• We have introduced interim administrative measures to simplify and speed up the approval process of a range of pay-related transactions

If pressed on support to employees:

• We have launched MyGCPay, a new web application that provides employees with a centralized and simplified view of their pay and benefits. Created by employees for employees, it helps them identify pay issues earlier and allows them to monitor their open cases with more detail
• We have improved services offered by the CCC to provide better support to employees, including the ability to resolve pay issues in a faster and more effective way at the first point of contact.
• The CCC escalates cases of hardship so they can be addressed quickly, and agents are trained to respond to situations where employees may be in distress
• Across Government, progress has been made to increase mental health awareness. Work continues to better equip managers, practitioners and leaders on how to address pay-related mental health issues in the workplace and to inform employees of the services and support tools that are available, including flexible repayment options.

If pressed on 2020 to 2021 Supplementary Estimates (A):

• To continue progress on Pay stabilization, PSPC sought additional funding to continue efforts to eliminate the backlog of pay issues for public servants, maintain measures to deliver pay and support employees, and stabilize pay for the Government of Canada
• The investment announced in the Supplementary Estimates (A) for 2020 to 2021 represents $203.5 million
• This new funding will help to eliminate the backlog and to stabilize the pay system. To do so, we will
  • sustain employee capacity
  • increase our processing rate
  • increase the automation of as many transactions as possible through system enhancements

Background

COVID-19 measures

Services related to pay are considered essential and measures are in place to ensure that operational requirements are met. Following the recommendation of the Public Health Agency of Canada, PSPC asked all its employees, including those at the Public Service Pay Centre and the CCC, to work from home if possible, while ensuring the delivery of essential services.

The Pay Centre continues to deliver all of its pay services which include regular pay, new hires, return from leave, maternity and parental leave, as well as disability insurance.

Supporting employees and eliminating the backlog remain our top priorities and we continue to see progress. From April 1 to 29, 2020, the backlog of transactions with financial implications has decreased by 17,000, and now stands at 149,000. Overall, the backlog has been reduced by 61% since the January 2018 peak, when it stood at 384,000 transactions.

The CCC remains the first point of contact for current and former federal public servants looking for information or help with compensation and benefits, and for technical issues when using the Compensation Web Applications or MyGCPay. Clients may, however, experience increased wait times when calling the CCC.

We are working closely with all our partners, including employees, unions, Members of Parliament offices, departments and their representatives from HR and pay, to provide support during this challenging time.

Total investments to deliver pay and respond to pay issues is $1.177 billion

• $50 million (2016) PSPC – build capacity, enhance technology, employee support
• $142 million (2017) – build capacity, enhance technology, employee support. This included $15 million for TBS and $127 million for PSPC
• $431.4 million (Budget 2018) PSPC/TBS - build capacity, enhanced technology, and employee support
• $5.5 million (Budget 2018) CRA – process income tax reassessments needed due to pay issues
• $16 million (Budget 2018) TBS – work with experts, federal public sector unions and technology providers on a way forward for a new pay system
• $523.3 million (Budget 2019) PSPC – ensure adequate resources to address pay issues; support system improvements
• $9.2 million (Budget 2019) CRA – process income tax reassessments needed due to pay issues

2020 Supplementary Estimates – Public information

The investment for the pay system announced on June 2, 2020, in the Supplementary Estimates (A) 2020 to 2021 represents $203.5 million.

PSPC sought this additional funding to continue efforts to eliminate the backlog of pay issues for public servants, maintain measures to deliver pay and support employees, and stabilize pay for the Government of Canada.

To do so, we will sustain employee capacity, increase our processing rate; and increase the automation of as many transactions as possible through system enhancements.

Since the launch of Phoenix, PSPC implemented a series of measures focused on stabilizing the pay system.

These include increasing the compensation workforce, providing employees with greater support through our CCC, introducing the Pay Pods model, implementing a backlog reduction strategy through our Strategic Engagement Sector, and implementing technical fixes that have improved payroll processing, such as increased automation of transactions.

As a result, since its peak in January 2018, the Pay Centre's backlog of transactions with financial implications has been reduced by 64% (from 384,000 to 137,000).

PSPC has met service standards 65% to 75% of the time over the last year, compared to a 57% average over 2018 to 2019.

On average, in 2020 to date, parental and disability leaves have been processed within service standards 98% of the time (as of April 2020).

In addition to efforts underway, we are working closely with all stakeholders, including experts, federal public sector unions and the private sector for innovative solutions to accelerate pay stabilization.

We continue to regularly share information on progress with employees and Canadians through various platforms and tools.

[Redacted]

MyGCPay

MyGCPay is a web application developed by PSPC to help rebuild federal government employees’ confidence in the integrity of their pay. It provides employees with a centralized and simplified view of their pay and benefits. It helps employees identify pay issues earlier and allows them to monitor their open cases with more detail.

The application allows employees to:

• View the most current information about their pay and benefits
• Print important documents such as, tax slips and proof of employment
• Identify pay issues earlier and, if an employee’s current or former department was served by the Pay Centre, monitor any open enquiries and cases in detail
• Access historical information, pay cheques, benefits plans, enquiries, and Pay Centre cases dating back to 2016

2019 Public Service Employee Survey results

Media coverage and union communications reported Public Service Employee Survey (PSES) 2019 results negatively, especially regarding 74% of respondents indicating that they have been affected by pay issues since the launch of Phoenix in 2016. The 2019 survey highlighted engagement, leadership, workforce, workplace well-being, and compensation. Over 182,300 public servants responded to the survey in 86 federal departments and agencies. The results of the survey allow departments to make continuous, evidence-based improvements, shaped by the voices of public servants.

Compensation results highlight:

• 74% of respondents say that they have been affected by issues with the Phoenix pay system since its introduction in early 2016. Of those affected, 59% say they have had a new pay issue in the last 12 months
  • These figures indicate that 44% of all respondents (59% of 74%) reported having a new pay issue in the last 12 months
  • This demonstrates improvement, considering that in 2017, approximately 18 months following the launch of Phoenix, 69% of PSES respondents reported having pay issues
• There are other improvements from the last two years in public servants’ views and perceptions in several areas
  • Of those affected by Phoenix, 44% say that all of their issues have been resolved. This is an improvement of 9% compared to 2018 results (35%)
  • The percentage of employees saying that pay issues caused them stress to a high or very high degree shows a decrease from 34% (2017) to 32% (2018) to 28% (2019). An improvement of 6% since 2017
  • 25% of those affected by Phoenix say they are satisfied with support received from the Pay Centre, compared to 19% in 2018 and 16% in 2017. An improvement of 9% since 2017
  • 39% are satisfied with the related support received from their organization to help them resolve their pay issues, up from 3% in 2018
  • 20% of respondents report that pay issues have, to a large or very large extent, affected their decision to seek or accept another position within their organization or the public service, a decrease of 2% from 2018

Office of the Auditor General Commentary on the 2018-2019 Financial Audits and House of Commons Committee Reports

The Office of the Auditor General (OAG) issued its Commentary on the 2018-2019 Financial Audits in December 2019, following the Government’s tabling of Public Accounts. The Commentary observations state that there has been limited improvement with respect to pay errors. Despite this, the OAG states that pay expenses were presented fairly in the Government of Canada’s 2018 to 2019 consolidated financial statements. The OAG also recognizes that pay is a complex and shared responsibility across government.

The report focuses on a few key elements, including:

• Backlog
• Pay errors in 2018 to 2019, due to overpayments and underpayments
• Pay element complexity
• Effectiveness of Pay Pods
• Timeliness and accuracy of data

In addition to two dedicated performance audit reports on Phoenix in 2017 and 2018, the OAG analyzes progress and provides feedback and recommendations on multiple aspects of HR-to-Pay on a yearly basis. Both performance audits came with recommendations, which the department and the TBS have accepted and are implementing through Management Action Plans.

The department is also implementing a series of measures related to pay transactions and processes, as well as IT tools and infrastructure, in response to the observations made as part of the financial audits.

Defence and Marine Procurement: General accomplishments

Context

Suggested responses and background information is provided on defence and marine procurement accomplishments.

Note: Questions on defence procurement delays or Department of National Defence order paper questions should be directed to the Minister of National Defence.

Suggested response

• Canada’s Defence Policy: Strong, Secure, Engaged, reaffirms the Government’s commitment to ensure that Canada has an agile, multi-purpose military and that members of the Canadian Armed Forces are well equipped. We are delivering on this commitment
• Over the last 18 months, significant progress has been achieved on major defence and marine procurement projects and activities

This includes:

• In February 2019, through our National Shipbuilding Strategy, Lockheed Martin Canada was selected for the design of 15 new Canadian Surface Combatants that will be built at Irving Shipbuilding’s Halifax Shipyard
• In May 2019, we announced a $15.7 billion investment to renew the Canadian Coast Guard fleet, which will include 16 Multi-Purpose Vessels and two Arctic and Offshore Patrol Ships
• The first two Offshore Fisheries Science Vessels, the CCGS Sir John Franklin and the CCGS Capt. Jacques Cartier, were delivered to the Coast Guard in 2019
• In summer 2019, contracts worth a combined total of $1.5 billion were awarded to Chantier Davie, Seaspan’s Victoria Shipyards and Irving Shipbuilding for the maintenance work on the 12 Halifax-class frigates until the replacement Canadian Surface Combatant ships are delivered
• In December 2019, Chantier Davie pre-qualified to become the third strategic partner under the National Shipbuilding Strategy. The selected shipyard will build six new program icebreakers for the Canadian Coast Guard
• In July 2019, we released the formal Request for Proposals for the future fighter jet procurement process, after working with eligible suppliers on its development
• In September 2019, we awarded a contract to acquire 360 armoured combat support vehicles that will integrate with and support the existing platform currently in use by the Canadian Armed Forces

Background

Major progress on defence and marine procurements over the last 18-months include:

• Design Selection for Canadian Surface Combatant:
  • The Canadian Surface Combatant (CSC) project is the largest, most complex procurement undertaken by the Government of Canada, with a total estimated project budget of $56 billion to $60 billion
  • In February 2019, the Government of Canada and Irving Shipbuilding selected Lockheed Martin Canada for the design of 15 new CSCs that will be built at Irving Shipbuilding’s Halifax Shipyard. The CSC design will be based on BAE’s Type 26 Global Combat Ship
  • The Government of Australia has also selected the Type 26 design as the basis for its Hunter class warships
  • In early November 2019, Irving Shipbuilding and Lockheed Martin Canada were authorized to progress to the Preliminary Design phase of the design process. Preliminary Design is the second of the 4 design phases
• Acquisition of 360 Light Armoured Vehicles:
  • On August 16, 2019, in support of Canada’s defence policy Strong, Secure, Engaged, the Government of Canada announced its intention to acquire up to 360 armoured combat support vehicles (ACSVs) and that it was in the advanced stages of negotiating a contract, through a non-competitive process
  • On September 5, 2019, Public Services and Procurement Canada (PSPC), on behalf of National Defence, awarded a contract to General Dynamics Land Systems – Canada (GDLS-C) valued at approximately $2 billion for 360 ACSVs, initial spare parts, technical manuals, and training
• Release of the Request for Proposals for the Future Fighter Capability Project:
  • This procurement is a once in a generation opportunity to support the growth of Canada’s aerospace and defence industries for decades to come
  • The Government has delivered on its promise to launch an open and transparent competition to replace Canada’s fighter fleet and continues to make progress on its purchase of 88 advanced jets
  • On July 23, 2019, Public Services and Procurement Canada (PSPC) released the formal Request for Proposals to eligible suppliers. Suppliers have until July 31, 2020 to submit their initial proposals
  • A contract award is anticipated in 2022, and the first replacement aircraft delivered as early as 2025
• Two Transport Canada ferries to be built at Chantier Davie:
  • An Advance Contract Award Notice (ACAN) was issued on May 22, 2019, signalling the Government of Canada’s intention to enter into a contract with Chantier Davie for the construction of two new ferries for Transport Canada. Other interested suppliers had 15 calendar days to submit a Statement of Capabilities to show they met the requirements laid out in the ACAN. None were submitted
  • The contract value and construction timelines will be determined once negotiations with the shipyard are completed
  • On June 19, 2019, the Government of Canada announced that it was entering into contract negotiations with Chantier Davie of Lévis, Quebec, for the construction of the vessels
  • On November 14, 2019, Lengkeek Vessel Engineering Inc. & Knud E. Hansen A/S Naval Architects (Joint Venture) were awarded a $3.1 million contract to provide expert advice and technical oversight to Transport Canada throughout the project leading to and including the construction
  • On November 26, 2019, the Government of Canada awarded a contract to Chantier Davie, estimated at $1 million, for initial project work related to the construction. This includes, but is not limited to, establishing a Project Management Office and initiating various engineering studies to support design and construction of the new vessels
• Selection of a third Canadian Shipyard under the National Shipbuilding Strategy to build six Program Icebreakers for the CCG:
  • In order to respond to evolving federal shipbuilding requirements, PSPC is carrying out a process to select a third strategic partner shipyard under the National Shipbuilding Strategy (NSS). The selected shipyard will build six new program icebreakers for the CCG
  • In December 2019, Chantier Davie pre-qualified in the first stage of the process to become the third strategic partner under the NSS. Chantier Davie has moved on to the Request for Proposal and evaluation stage. This will include a third-party assessment of the shipyard’s infrastructure, submission of a formal proposal, and a due diligence process to ensure the shipyard is financially capable of performing the work and making any necessary upgrades to its infrastructure
  • An umbrella agreement is expected to be in place with a third shipyard in 2020
• 16 Multi-Purpose Vessels for the CCG to be built at Vancouver Shipyards:
  • On May 22, 2019, the Government of Canada announced a $15.7 billion investment to renew the CCG fleet, in order to ensure capacity to deliver important services for Canadians. This includes building up to 16 Multi-Purpose Vessels (MPVs)
  • Construction of the MPVs is expected to start in the mid-2020s, following the completion of the second Joint Support Ship
  • A run of up to 16 vessels will provide an opportunity for Vancouver Shipyards to generate efficiencies and economies of scale, as well as ensure greater workforce stability and minimize gaps in production
• 7th and 8th Arctic and Offshore Patrol Ships for the Coast Guard:
  • On May 22, 2019, the Government of Canada announced a $15.7 billion investment to renew the CCG fleet, in order to ensure capacity to deliver important services for Canadians. This includes building two Arctic and Offshore Patrol Ships (AOPS) for the CCG
  • The 2 new AOPS (7&8), to be built by Irving Shipbuilding, will be adapted for the CCG to perform a range of critical missions, including Northwest Atlantic Fisheries Organization patrols
• Resequencing of the non-combat package:
  • The Government of Canada has made a decision to re-sequence construction of the Joint Support Ships (JSS) and Offshore Oceanographic Science Vessel (OOSV) at Seaspan’s Vancouver Shipyards
  • Under the revised sequencing, Seaspan will complete construction on JSS 1, followed by the OOSV and then JSS 2. This will allow for uninterrupted transition from early block construction to full production on JSS 1
  • Given the complexity of this build, this change in sequencing will ensure focused engineering resources on each of the projects, while allowing for time between construction of the first and second JSS to incorporate lessons learned. Moreover, this allows for uninterrupted work at the shipyard, mitigating the risk of potential layoffs. This is a prime example of how the NSS allows us to be flexible in meeting Royal Canadian Navy and CCG requirements, while finding efficiencies at shipyards
• Acquisition and conversion of three medium icebreakers for the CCG:
  • On December 14, 2018, the CCG accepted into service the first of the three medium icebreakers being refit by Chantier Davie, the CCGS Molly Kool
  • The second and third vessels will be in service in 2020. The names of the second and third icebreakers were announced on April 30, 2019: the CCGS Jean Goodwill and the CCGS Vincent Massey
• Invitation to Qualify for the Future Aircrew Training Program:
  • Through an open and transparent competition, the Government of Canada is taking the necessary steps to renew its existing aircrew training services
  • The Future Aircrew Training (FAcT) program has been put in place to develop and implement a new and cohesive training program that replaces the Canadian Armed Forces’ current Pilot, Air Combat Systems Officer (ACSO), and Airborne Electronic Sensor Operator (AES Op) training systems
  • In December 2018, Canada established a list of Qualified Suppliers that demonstrated their ability to meet Canada’s needs, as defined in the Invitation to Qualify
  • A Draft Request for Proposal (RFP) is expected to be released in fall 2020
  • The formal RFP is expected to be released in spring 2021
  • Industry engagement will continue until release of the final RFP
• Invitation to Qualify for the Victoria-class In-Service Support Contract II:
  • Through an open and transparent competition, the Government of Canada is renewing the in-service support contract for the Royal Canadian Navy’s Victoria Class submarine fleet
  • Canada has a fleet of 4 submarines that were purchased, used, from the UK in the early 2000’s
  • An Invitation to Qualify closed January 8, 2020 and we are evaluating the responses received. Successful ITQ respondents will be part of the industry consultation group that will lead to the finalization of the Request for Proposals (RFP)
  • Babcock Canada Inc. is the current prime contractor and the current contract will remain in place until June 2023, if all option years are exercised. Victoria Shipyards Limited of Victoria, B.C. is one of the principal subcontractors to Babcock
• Invitation to Qualify for Remotely Piloted Aircraft Systems:
  • Through an open and transparent competition, the Government of Canada is taking the necessary steps to procure an armed Medium Altitude Long Endurance Remotely Piloted Aircraft System (RPAS)
  • This new capability will provide intelligence, surveillance, target acquisition, reconnaissance and precision strike capabilities to the Canadian Armed Forces in support of operations domestically and abroad
  • In May 2019, Canada established a list of Qualified Suppliers that demonstrated their ability to meet Canada’s needs, as defined in the Invitation to Qualify
  • Industry engagement will continue until Summer 2021 to refine the requirements
  • A draft RFP is expected in Fall 2020
  • The formal RFP is expected in Winter 2021
• Invitation to Qualify for Logistics Vehicle Modernization Project:
  • Through an open and transparent competition, the Government of Canada is taking the necessary steps to revitalize and replace Canada’s light and heavy logistics vehicle capabilities 
  • In July 2019, Canada established a list of Qualified Suppliers that demonstrated their ability to meet Canada’s needs, as defined in the Invitation to Qualify
  • Industry engagement will continue until Summer 2021 to refine the requirements
  • A draft RFP is expected in Summer 2020
  • The formal RFP is expected in Summer 2021
• Delivery of Offshore Fisheries Science Vessels:
  • The first 2 Offshore Fisheries Science Vessels, the CCGS Sir John Franklin and CCGS Capt. Jacques Cartier, were delivered to CCG in 2019. Delivery of the third vessel is expected in Summer 2020
• Halifax-class Frigates work period contracts awarded:
  • The Royal Canadian Navy currently operates 12 Halifax-class ships:
    • 7 ships are assigned to Maritime Forces Atlantic
    • 5 are assigned to Maritime Forces Pacific. The Navy intends to continue operating these ships for approximately another 2 decades, until the Canadian Surface Combatants are delivered
  • In 2016, extensive industry engagements, along with market survey processes, identified three Canadian shipyards capable of performing the level of maintenance services needed to support the frigates through to the end of life
  • Advance Contract Award Notices were issued to Irving Shipbuilding, Chantier Davie, and Seaspan’s Victoria Shipyards in November 2018
  • In July 2019, two contracts totalling $1 billion were awarded to Victoria Shipyards and Chantier Davie. In August 2019, a $500 million contract was awarded to Irving Shipbuilding. The contracts are expected to rise in value to over $7.5 billion as additional work packages are added
  • Work is planned to begin in August 2020, when Chantier Davie will commence maintenance work on the Ville de Quebec

If pressed on delays in defence procurement projects:

• Over two thirds of projects under Strong, Secure, Engaged are in the implementation phase, near completion, or completed
• For example National Defence has provided the Canadian Army with
  • Medium support vehicle systems which are currently deployed in Latvia
• Additionally, the Royal Canadian Navy’s Halifax-Class Frigates have been modernized and deployed overseas

Status of Defence Procurement Projects

Context

Due to COVID-19, several defence procurement projects have halted or slowed, including the construction and maintenance of ships.

Note: All questions related to the Challenger Jets will be referred to the Minister of National Defence.

Suggested response

• Our government is taking strong action to protect our economy, jobs, and the health and safety of Canadians during the global COVID-19 outbreak
• Canada will continue to monitor the situation, analyze potential impacts and explore all possible financial measures available to support the defence and marine industry and protect Canada’s long term national security interests
• We are currently assessing the impact of COVID-19 on the delivery of ongoing and future major procurement projects
• We urge all employers during this critical time to follow the recommendations of public health officials, and to go above and beyond standard health and safety measures to make sure that workers are safe in this extraordinary situation

If pressed on the budget, delays and impact:

• Procurements are proceeding as planned, barring any issues faced by industry, which we will examine with companies on a case-by-case basis
• Canada will work through the contractual and financial implications of these circumstances to find resolutions acceptable to both Canada and industry
• We will work with the defence and shipbuilding industry to mitigate any budgetary and schedule impacts of the COVID-19 response
• Given the uncertainties associated with the duration of COVID-19 and related strategies, it is premature to assess the overall schedule impact to projects

If pressed on Challengers:

• The Government is committed to providing our members of the Canadian Armed Forces (CAF) with the equipment and services they need to do their job, at the best value for Canadians
• Canada is taking another step to provide the CAF with the modern equipment it needs to deliver on a wide range of operations, as outlined in Canada’s defence policy, Strong, Secure, Engaged
• Public Services and Procurement Canada (PSPC), on behalf of the Department of National Defence, has awarded a contract to Bombardier Inc. to purchase two new Challenger 650 aircraft for the Royal Canadian Air Force
• This procurement approach will ensure the Royal Canadian Air Force receives these jets in a timely manner to meet critical operational requirements, while supporting key areas of the aerospace industry

If pressed on the sale of LAVs to Saudi Arabia:

• Canada has taken firm action to strengthen our export controls system by passing legislation that enshrines the United Nations Arms Trade Treaty assessment criteria, including human rights, into our export laws
• Experts from across the Government of Canada evaluate every export permit application on a case-by-case basis to determine what the goods or technology will be used for, where they will be used and by whom, among other factors
• Permits will not be issued where the Minister of Foreign Affairs determines there to be substantial risk that they could be used to commit or to facilitate serious violations of international humanitarian law, international human rights law, or serious acts of gender-based violence

If pressed on the third yard:

• Chantier Davie has pre-qualified to become the third strategic partner under the National Shipbuilding Strategy and has moved on to the Request for Proposal and evaluation stage of the process
• The third yard will build six Program Icebreakers for the Canadian Coast Guard (CCG)
• The entire Invitation to Qualify process was overseen by an independent fairness monitor

If pressed on the Polar Icebreaker:

• The government is exploring procurement options for construction of the Polar Icebreaker. No decisions have been taken
• A Request for Information was issued to obtain information on domestic shipyard capability and capacity to build a Polar Icebreaker

If pressed on the Future Fighter Capability Program:

• At the request of industry, Canada has granted one-month extension to the June 30, 2020 proposal submission deadline. Canada has therefore requested that all suppliers inform Canada by July 1, 2020 regarding their intention to submit a proposal
• Canada is actively planning for the upcoming bid evaluation once proposals are received on July 31, 2020

If pressed on ‘excusable delay’ requests:

• In order for Canada to consider a delay excusable, certain factors set out in the contracts must be met, including a requirement for contractors to notify Canada and to submit a work around plan
• Therefore, in the specific context of COVID-19, contractors wishing to submit an Excusable delay claim to Canada should review their contracts and proceed in accordance with the requirements they contain
• We encourage industry to review their own specific contract and submit an excusable delay request according to the provisions of their respective contract

Background

In response to COVID-19, Irving Shipbuilding Inc. (ISI) has suspended most industrial operations, production at Vancouver Shipyards (VSY) remains ongoing and the Province of Quebec has declared Chantier Davie an essential service.

ISI suspended most industrial operations as of March 20, 2020, with special measures for working from home or within ISI’s offices implemented where possible. ISI has since commenced a gradual return-to-work, with a limited number of production employees now in the shipyard to ensure physical distancing. COVID-19 safety measures have been implemented, including temperature screening for all individuals entering the site. Design work for the Canadian Surface Combatant continues to progress, while production work on the Arctic and Offshore Patrol Ships has been resumed gradually since mid-April.

Operations at VSY continue but are being closely monitored. Staff not in direct support of production are working from home, while other measures being taken include following self-isolation guidelines, additional social distancing measures, cancelling large gatherings and increased cleaning. VSY has been working closely with WorkSafeBC in implementing these practices, and adjusting and escalating actions in response to new regulations and guidance.

On March 24, 2020, in response to COVID-19, the Quebec Government published a list of essential industrial sectors, under which Chantier Davie qualified. Chantier Davie has conducted on-site training for dealing with COVID-19, implemented a set of strict directives, and negotiated with their union to maintain intact squads instead of rotating employees through different teams. Nonetheless the workforce numbers and capacity have diminished to accommodate the social distancing measures implemented.

A number of Canadian defence suppliers have reached out to government officials identifying the need for urgent support, as they are experiencing serious cash flow difficulties resulting from reduced activities in light of the COVID-19 pandemic situation. In collaboration with other government organizations and central agencies, PSPC is currently exploring measures to support the defence industry.

Future Fighter Capability Project

Context

As part of the Government of Canada’s reaffirmed commitment to invest in Canada’s military, as announced in the 2017 Defence Policy, “Strong, Secure, Engaged”, the Government launched an open and transparent competition in December 2017 to permanently replace Canada’s fighter fleet with 88 advanced jets—the Future Fighter Capability Project (FFCP).

Notes:

• All questions related to capability gap, security and interoperability requirements, costs, and Canada’s participation in the Joint Strike Fighter Program should be answered by the Minister of National Defence
• All questions related to the Industrial and Technological Benefits Policy and the assessment of bidders’ impact on Canada’s economic interests should be answered by the Minister of Innovation, Science and Economic Development (ISED)
• All questions related to trade issues should be answered by the Minister of Foreign Affairs

Suggested response

• The Government is committed to ensuring that members of the Canadian Armed Forces have the equipment they need to do their jobs and protect Canadians, while maximizing economic benefits for the country
• The Government delivered on its promise to launch an open and transparent competition to replace Canada's fighter fleet with 88 advanced jets, and we are making great progress
• At the request of industry, Canada has granted a one-month extension to the June 30 proposal submission deadline, in the wake of the COVID-19 pandemic. The pandemic has impacted numerous businesses in various capacities, and the eligible suppliers are no exception. The proposals are now due on July 31, 2020
• This extension supports the Government’s commitment to conduct an open, fair, and transparent competition, maximizing the likelihood that Canada will receive competitive proposals that meet Canadian requirements
• We continue to anticipate awarding a contract in 2022, with delivery of the first replacement aircraft as early as 2025

If pressed on which supplier requested an extension:

• We do not disclose information about which suppliers make requests during active procurements.

Background

In June 2017, Canada’s Defence Policy confirmed a fleet size of 88 advanced fighter aircraft to replace the current CF-18s. The Government launched a procurement process for the future fighter aircraft in December 2017. Officials conducted extensive industry engagement with suppliers to maximize the likelihood that Canada receives competitive proposals, and with Canadian industry to ensure that they are well positioned to participate in the procurement. 

In November 2018, France-Dassault Aviation officially withdrew from the competitive process.

In July 2019, the request for proposal was shared with the eligible suppliers.

In August 2019, UK-Airbus also withdrew from the competition.

On October 4, 2019, Canada received Preliminary Security Offers from the remaining three eligible suppliers, outlining how the suppliers intend to meet Canada’s security and interoperability requirements. Canada has completed the First Security Acceptability Assessment on the offers and provided significant feedback to suppliers on January 31, 2020. The feedback will help suppliers to understand the scope of information that is required in their proposals in order to submit an acceptable security offer to Canada.

Next steps

A dialogue phase may be conducted with two or more compliant bidders in 2021 so they can address, in revised proposals, any gaps and risks that are identified during the evaluation phase. Canada will finalize the contract terms with the preferred bidder prior to contract award anticipated in 2022.

Plans are being developed to proceed with proposal evaluations during a pandemic while minimizing any impact to the project schedule.

National Shipbuilding Strategy

Context

The National Shipbuilding Strategy (NSS) is a long-term commitment to renew the vessel fleets of the Royal Canadian Navy (RCN) and Canadian Coast Guard (CCG), create a sustainable marine sector, and generate economic benefits for Canadians.

Suggested response

• The Government is delivering on its commitment to continue to renew the RCN and the CCG fleets, revitalize the shipbuilding industry across Canada, create middle-class jobs, and ensure Canada’s marine services have the modern ships that they need

Progress on current work

• At Seaspan’s Vancouver Shipyards, the first two Offshore Fisheries Science Vessels have been delivered to the CCG, with delivery of the third vessel expected in summer 2020. Work is ongoing on the first Joint Support Ship
• At Irving Shipbuilding, four Arctic and Offshore Patrol Ships are under construction with the first to be delivered to the RCN in spring 2020. Design work on the Canadian Surface Combatant is advancing

Third yard

• Chantier Davie has pre-qualified to become the third strategic partner under the NSS and has moved on to the Request for Proposal and evaluation stage of the process
• The third yard will build six Program Icebreakers for the CCG
• The entire Invitation to Qualify process was overseen by an independent fairness monitor

Opportunities for other yards / Chantier Davie

• Across the country, opportunities exist for Canadian shipyards and businesses to win contracts for small vessel construction, repair, refit and maintenance
• Since 2012, Chantier Davie has been awarded $2.05 billion in NSS contracts. They are presently converting two icebreakers for the CCG, and are undergoing a process to become the third shipyard under the NSS

If pressed on the Polar Icebreaker:

• The government is exploring procurement options for construction of the Polar Icebreaker. No decisions have been taken
• A Request for Information was issued on February 28, 2020 to obtain information on domestic shipyard capability and capacity to build a Polar Icebreaker

If pressed on Interim Icebreaker Capacity for CCG:

• The Government awarded $817 million in contracts to Chantier Davie for the acquisition of three medium commercial icebreakers and conversion work. The first vessel began operations in December 2018, with the second vessel CCGS Jean Goodwill and third vessel CCGS Vincent Massey available by Fall 2020 and Spring 2021 respectively

If pressed on Joint Support Ship (JSS):

Note: Questions related to the budget for the project and technical requirements (including the design requirements) should be referred to the Minister of National Defence.

• The Government of Canada is committed to the NSS and providing members of the RCN with the equipment they need to ensure their future operational effectiveness
• Under the Strategy, we are building whole new classes of ships, in new shipyards, with new workforces. The construction of a new class of ships is a complex endeavour and cost and schedule estimates are prone to fluctuations as the design of the JSS is finalized
• Construction of the first JSS that began in June 2018 is ongoing

Background

Contracts under the National Shipbuilding Strategy

From 2012 to the end of 2019, the Government signed approximately $13.78 billion in new NSS contracts throughout the country. These contracts are estimated to contribute over $17.04 billion ($1.54 billion annually) to gross domestic product (GDP), and create or maintain more than 15,521 jobs annually, through the marine industry and its Canadian suppliers between 2012 and 2022.

Table 1: National Shipbuilding Strategy contracts awarded 2012 to the end of 2019

ISI	VSY	Davie	Other shipyards/companies
$4.74 billion	$1.84 billion	$2.05 billion	‎$5.14 billion

Table 2: Project budgets and delivery dates

Vessel	Delivery date	Budget
Offshore Fisheries Science Vessel (OFSV) 1	June 27, 2019	$687 million
OFSV 2	November 29, 2019
OFSV 3	Summer 2020
Joint Support Ship (JSS) 1	2023	$3.4 billion (under review)
JSS 2	Fall 2025
Offshore Oceanographic Science Vessel (OOSV)	Spring 2024	$331 million (under review)
Arctic and Offshore Patrol Ship (AOPS) 1	Spring 2020	AOPS 1 to 6 $4.3 billion
AOPS 2	Late 2020
AOPS 3	Fall 2021
AOPS 4	Fall 2022
AOPS 5	Summer 2023
AOPS 6	Winter 2024
AOPS 7	Winter 2025	AOPS 7 and 8 $1.5 billion (estimate)
AOPS 8	Fall 2025
Canadian Surface Combatant (CSC)	15 CSCs between 2020s - 2040s	$56 to $60 billion (estimate)
Multi-Purpose Vessel (MPV)	Up to 16 MPVs starting in late 2020s	$14.2 billion (estimate)

Procurement of medical supplies

Context

Public Services and Procurement Canada (PSPC) has been working aggressively with domestic and international suppliers, along with provincial and territorial governments to procure medical supplies and personal protective equipment (PPE).

Suggested response

• We remain steadfast in our efforts to get safe and effective supplies to the front-lines as quickly as possible
• Good progress is being made, despite challenges posed by a highly competitive market and constrained supply chains
• PSPC continues to ramp up procurement efforts domestically and abroad. We have ordered millions of swabs, placed large orders of reagent with premier suppliers, received hundreds of thousands of medical gowns and N95 respirators that have passed testing and are now being distributed to provinces, received millions of litres of hand sanitizer and surgical masks and more than doubled the number of gloves
• All products we are buying continue to be subject to stringent controls at various points in the process, including testing by the Public Health Agency of Canada (PHAC)

If pressed on hand sanitizer recalls:

• Health Canada is advising Canadians that certain hand sanitizers are being recalled from the market because they contain industrial-grade ethanol that has not been authorized for use in hand sanitizers in Canada
• Health Canada has directed companies to stop the sale of these products and is monitoring the effectiveness of the recalls
• If Health Canada identifies additional products or manufacturers using ethanol that does not meet Health Canada requirements, it will take appropriate action and inform Canadians

If pressed on material shortages:

• The Government of Canada is purchasing supplies from a number of sources and countries, both internationally and domestically
• We are taking an aggressive approach to buying, especially when it comes to personal protective equipment for frontline healthcare workers. This includes:
  • Ordering ahead in bulk on behalf of provinces and territories
  • Supplementing those orders by purchasing limited-availability supplies that are immediately available
  • Ramping up the domestic manufacturing capacity, through the Plan to Mobilize Industry to fight COVID-19, being led by Innovation, Science and Economic Development Canada
• This is over and above the efforts provinces and territories are taking to secure their own supply

If pressed on domestic suppliers:

• Industry and suppliers have absolutely stepped up and a dedicated team of procurement specialists are actively assessing responses as they come in
• This assessment takes time, but we are completing it as quickly as possible and pursuing all viable leads

If pressed on Buy and Sell:

• Industry and suppliers have responded positively to the call to action. As of May 18, we had received more than 26,000 submissions, including nearly 17,000 domestic submissions
• We have contacted nearly all domestic companies who submitted forms, and continue to reach out to those submitting forms

If pressed on provincial and territorial collaboration:

• From the outset we have been working directly with provincial and territorial governments to ensure that we are capturing their needs, and purchasing supplies with a “Team Canada” approach
• I am in regular contact with my provincial and territorial counterparts to ensure that we are working cohesively and collaboratively, and that they are getting the support they need
• Our goal is to be over prepared and we are ordering supplies in anticipation of future needs, to ensure they are available for provinces, territories, frontline health workers and Canadians

If pressed on providing the private sector with PPE:

• Our top priority remains protecting the health and safety of Canadians
• Our government, in consultation with provinces and territories and industry, is actively exploring opportunities to support organizations beyond the healthcare system in accessing PPE supplies to meet the needs of Canadian workers

If pressed on National Security Exception (NSE) contracting:

• The NSE is invoked to remove procurements from the obligations of Canada’s trade agreements for reasons of national security
• The procurement itself must either be indispensable for national security or indispensable for national defence purposes
• In the case of COVID-19, after the World Health Organization (WHO) declared the pandemic, PHAC made a request on behalf of the federal government that PSPC invoke the NSE with respect to the acquisition of goods and services required in order to respond to the COVID-19 pandemic
• Some of the procurements being carried out in response to COVID-19 are being done under a national security exception, meaning that many solicitation documents are not published on Buy and Sell. This allows us to move rapidly as we purchase goods and services to protect the health and safety of Canadians as we face this pandemic

If pressed on treatment of workers:

• Canada recognizes that millions of people are in situations of forced labour worldwide in a multitude of industries. The Government of Canada is not exempt from the risk of purchasing goods that have been made by forced labour
• As outlined in the 2019 National Strategy to Combat Human Trafficking, Canada will launch a national public awareness campaign to raise awareness of human trafficking, including forced labour
• Canada will encourage industry partners to act ethically by implementing changes in their supply chains to prevent and reduce the risk of forced labour
• As one of the first phases of a multi-pronged approach to ensure that federal procurement supply chains are free from human trafficking and labour exploitation, Canada is working to revise the Code of Conduct for Procurement to include expectations for suppliers regarding human rights and labour standards

If pressed on logistics to handle large imports of PPE:

• On May 4, a notice was posted on the PSPC Buy and Sell website to solicit interest from major logistics service providers to facilitate the intake and distribution of large volumes of PPE and medical supplies
• This notice seeks a logistics solution going beyond distribution and includes warehousing, customs documentation and brokerage, and inventory management in Canada
• The notice closed on May 7, and we are now reviewing the expressions of interest

If pressed on Deloitte:

• PSPC had minimal capacity to identify, screen and support acquisition of COVID-19-related products from suppliers located outside of Canada specifically with an emphasis on China
• PSPC issued a contract with Deloitte to identify, screen and support the acquisition of COVID-19-related products from suppliers located outside of Canada with an emphasis on China

[Redacted]

Background

The Government is taking an aggressive, proactive procurement approach to fulfill immediate and future requirements. This includes buying in bulk from reputable distributors, to secure key items like masks and ventilators, which are in high global demand.

As the requirements across the country are rapidly evolving, the federal government is closely collaborating with the provinces and territories to ensure their needs are accurately identified in a timely manner. In addition, the Government has shifted its procurement approach to anticipate future needs rather than only current requirements.

In addition, across Canada, governments are encouraging efforts to ramp up domestic manufacturing to reduce reliance on international supply chains but it is not clear when that will scale up enough to replace or supplement global procurement.

Procurement from Malaysia

Malaysia is one of the largest producers of medical gloves, and is the source for a number of suppliers.

Deloitte

In response to the COVID-19 pandemic, PSPC mobilized a procurement team to urgently acquire materials such as personal protective equipment, medicines, test kits, and other needs as they arise to support Canada’s response to the COVID-19 pandemic.

Canada has a large domestic supply market, however, the heightened demand for supplies brought on by COVID-19, necessitated action to secure supplies from the global market, including the identification, qualification and contracting with alternative suppliers from global markets, including China.

Given urgent needs, a sole sourced contract to Deloitte was awarded for $8,625,000.

[Redacted]

Amazon COVID-19 supply distribution deal

Context

On April 1, 2020 the Government of Canada entered into an agreement with Amazon to help manage the distribution of personal protective equipment (PPE) and supplies purchased by the government, to support the COVID-19 response. Amazon is providing these services to Canadians at cost, without profit until June 30th.

Suggested response

• The health and safety of Canadians is our top priority, and that means ensuring life-saving medical supplies reach our frontline healthcare providers as quickly as possible
• We have entered into an agreement with Amazon, providing us with an access to its technology interface to allow provincial and territorial health authorities to order PPE purchased by the federal government
• Canada Post and Purolator are delivering the PPE and supplies ordered
• This agreement will enhance distribution capabilities of the federal government to help ensure that supplies make it into the hands of healthcare workers across the country as quickly as possible

If pressed on the rationale for Amazon:

• This agreement will support the distribution of vast quantities of masks, gloves and other equipment purchased by the federal government
• This is about getting life-saving medical equipment into the hands of our frontline workers as quickly as possible

If pressed on Public Health Agency of Canada’s (PHAC) role:

• The PHAC will maintain oversight of all orders from provinces and territories to ensure supplies are distributed appropriately

If pressed on Amazon’s role:

• These services are being provided at cost, without profit until June 30th
• Amazon provided an adapted customer interface that allows provincial and territorial health authorities to request supplies directly

If pressed on Canada Post and Purolator’s role:

• Canada Post is currently handling warehousing through its subcontractor Maritime Ontario, with Purolator assisting in getting the supplies to the warehouse from airports. Canada Post and Purolator, through their distribution networks, are delivering the supplies across Canada

If pressed on Letter of Interest (LOI) / Request for Information (RFI) for extended logistics services in Canada:

• On May 4, to facilitate the intake and distribution of large volumes of PPE and medical supplies, a LOI / RFI notice was posted on the Public Services and Procurement Canada (PSPC) Buy and Sell website to solicit interest from major logistics service providers
• This new expression of interest relates to a multimodal logistics solution in Canada, going beyond distribution and includes warehousing, customs documentation and brokerage, and inventory management
• The LOI / RFI closed on May 7, and the review of the expressions of interest is now underway

If pressed on the health and safety of workers:

• We fully expect Amazon to follow the guidelines put forward by Canada’s public health organizations and protect their workers during this crisis

Background

On April 1st, 2020, PSPC, on behalf of PHAC, signed a $5 million contract with Amazon to get health care professionals the PPE and supplies they need to protect themselves and continue caring for Canadians during the COVID-19 pandemic. PHAC will maintain oversight of all orders from provinces and territories to ensure supplies are distributed appropriately.

The delivery of the PPE and supplies ordered is being done by Purolator and Canada Post. PPE and supplies were initially warehoused at the facility of Maritime Ontario in Brampton, where the technology of Amazon has been installed for the orders of provincial and territorial health authorities. Maritime Ontario is an on-going key sub-contractor of Canada Post. As Maritime Ontario has started running out of space to warehouse the PPE ordered for the PHAC, other facilities have also started being used

Amazon is offering their assistance to Canada for no profit until June 30th, 2020. Fees beyond June 30, 2020 will be less than Amazon’s standard commercial fees. The bulk of the $5 million announced is to pay Purolator or Canada Post for transportation charges.

[Redacted]

Canada Post: Health and safety

Context

Canada Post continues to provide a vital service to Canadians under difficult circumstances, with employees continuing to operate in the field delivering parcels. Canada Post announced on March 19, 2020 that they are doing everything possible to continue its service while keeping the health and safety of its staff as its number one priority.

Suggested response

• Canada Post is closely monitoring the COVID-19 pandemic, and is taking steps to help keep its employees and the communities it serves safe, while following the guidance of the Public Health Agency of Canada
• We are working closely with Canada Post, and Canada Post is working closely with its unions, in order to ensure employees and the public are protected
• As the situation with the coronavirus evolves, the health and safety of employees and the Canadians they serve takes the highest priority while Canada Post takes steps to continue delivering the service Canadians rely on

If pressed on health and safety:

• Canada Post is taking action to protect employees and customers, including
  • Enhanced cleaning in all of its facilities and extra safety supplies for employees and staggered shifts which minimize everyone arriving at work and having their breaks at the same time. This also allows for enhanced physical distancing in the workplace
  • Priority service at its retail post offices to those at a higher risk, such as seniors, during the first hour of each day
  • Installing signage and floor decals to encourage physical distancing, limiting the number of customers in smaller offices, and installing clear barriers at the counter to increase safety
  • Suspending its normal 15-day hold period and asking that customers who are ill or self-isolating delay their visit and pick up their parcel only when it’s safe to do so
  • Implemented a new process called “Knock, Drop and Go” to minimize contact with the Delivery Agent by eliminating signatures at the door

If pressed on volume and delays:

• Canada Post has been experiencing sustained, high volumes during this pandemic
• The employees of Canada Post are working hard to ensure deliveries continue to reach Canadians during this crisis, and we value their dedication

If pressed on distribution of the Epoch Times:

• The government is aware of concerns expressed regarding the content of the current edition of this publication, and the requests to have Canada Post stop distributing it
• As Minister responsible for Canada Post, I have the authority to prevent the distribution of material through Canada Post if it relates to a criminal offence
• We take these concerns very seriously. We will await further assessment and take appropriate action as required

If pressed on obligations:

• Canada Post has a legal obligation under the Canada Post Corporation Act to accept all neighbourhood mail for delivery subject to the regulations on non-mailable matter
• Decisions made by Canada Post to deliver or refuse delivery of neighbourhood mail are subject to the Canadian Charter of Right and Freedoms
• After an initial legal assessment of this material, it does not appear to meet the required criteria for prohibiting distribution. However, further assessment is ongoing

Background

On March 19, 2020, Canada Post released a letter stating its number one priority is the health and safety of its employees. They encouraged employees who can work from home to do so. However, the majority of its employees are in the field delivering packages.

Canada Post has eliminated the need for customers to sign for parcels at the door to minimize personal contact. It has also suspended normal delivery guarantees for its parcel services as delivering safely without overburdening its employees requires more time.

Canada Post has been experiencing “Christmas level” volumes during this pandemic. For example, on Monday April 20, they delivered more than 1.8 million parcels to Canadians. That is similar to the biggest delivery days during the Christmas season. Canada Post has introduced several measures to encourage physical distancing and limit contact during the COVID-19 pandemic, including a “Knock, Drop and Go” approach for parcel delivery. This change eliminates the need for signatures at the door, speeds up delivery and has greatly reduced the number of parcels sent to post offices for pickup. Items that require signatures due to proof of age will be required to be picked up at the retail counter in a more controlled environment, where physical distancing can be accommodated.

International competition and export restrictions impacting personal protective equipment procurement

Context

Countries have begun curbing the export of personal protective equipment (PPE), increasing competition for the procurement of these goods. Media has also reported on several instances of medical supplies procured from unfamiliar overseas suppliers not meeting advertised quality standards.

Suggested response

• Our priority is making sure we get safe, effective equipment and supplies into the hands of front-line healthcare workers
• Given the high level of complexity in the global supply chain, ensuring quality of the product Public Services and Procurement Canada (PSPC) is purchasing is extremely important
• We are working closely with our partners around the world, including embassies, as well as with on the ground logistics expertise in the private sector to get these supplies into the hands of health care workers on the front lines of this crisis
• We are taking a multi-pronged approach by purchasing supplies internationally where possible, while at the same time directly supporting Canadian industry to scale-up and re-tool to build domestic capacity
• Our goal is to be over prepared and we are ordering supplies in anticipation of future needs, to ensure they are available for provinces, territories, frontline health workers and Canadians

If pressed on quality-issues of medical supplies:

• We are working with established suppliers and distributors, as well as quality assurance experts, and we have strong processes in place to help ensure that the supplies we receive meet all necessary standards
• In addition, Public Health Agency of Canada (PHAC) has robust testing measures in place, and they are in place for the very purpose of ensuring quality control of these essential products before they go out to provinces and territories
• We have encountered situations where supplies were found to be substandard, and we have acted quickly to address these issues, and to ensure that replacement supplies are rolled out where they were needed most
• These actions include suspending orders with certain manufacturers, and working closely with others to ensure that production issues are identified and corrected as soon as possible
• We must make sure that the equipment that our frontline workers rely on is high quality, so they can stay safe, and keep us safe too

If pressed on international export restrictions:

• Countries have begun implementing export restrictions on the goods critical to combating COVID-19, such as PPE
• This environment has made it increasingly challenging to source and acquire the PPE that Canada needs
• This is why we have been collaborating with provinces and territories on an ongoing basis to identify their needs and establish bulk buys to purchase required equipment, supplies, and services to combat COVID-19

If pressed on a plane departing China without cargo:

• One cargo flight returned without its intended federal shipment on board because the cargo couldn’t be cleared through the handling protocols in time to be loaded resulting in the intended cargo being unable to get to the plane before its required takeoff time
• Air Canada took quick action to load standby shipments belonging to other customers, bringing much needed goods back to Canada
• Air Canada has credited the Government of Canada with the costs they recovered as a result of that transport flight

Background

Global demand for medical supplies remains high for the fight against COVID-19, and competition remains fierce for their delivery. The federal government is procuring materials from a variety of sources, including from overseas suppliers. In addition to federal supply purchases, provinces and cities are also sourcing their own equipment.

Countries have moved to restrict the export of face masks, gloves and other medical supplies critical for front-line workers in the fight against the COVID-19 pandemic, resulting in a more time-consuming procurement process. China is the largest supplier of PPE in the world, and global supply was impacted when the country had to shut down its factories earlier this year when the outbreak began. Canada has taken a two-pronged approach to the acquisition of supplies, by scaling up domestic capacity while seeking to acquire PPE internationally.

The federal government has recently hired private firms to provide quality assurance before supplies are shipped to Canada, and the federal public health agency does further checks before distributing goods.

Translation Bureau staff capacity

Context

Translation Bureau (TB) staffing capacity and wellness was raised by members of the Standing House Committee on Procedure and House Affairs (PROC) during a Translation Bureau’s appearance on May 4, 2020.

Suggested response

• TB’s top priority is the health and safety of its employees
• TB has not experienced capacity issues to date and is taking measures to ensure it has the capacity to continue serving Parliament and the Government of Canada
• TB currently has approximately 50 official languages interpreters available to meet the needs of Parliament
• We will continue to do our work to ensure the health and safety of Government of Canada employees, while providing an essential service for parliamentarians

Background

On May 4, 2020, during an exchange at PROC, the President of the Canadian Association of Professional Employees stated that out of the 70 TB interpreters working in official languages during the pandemic, there are about 40 interpreters that are unable to work because of child care or health issues.

TB has confirmed that these numbers are not accurate.

From January 1, 2019 to March 15, 2020, there was one report of a disabling injury and one report of a minor injury. Both employees are now recovered and have returned to work. Both incidents were a result of traditional (in person) interpretation. During the same time period, there were 28 other hazardous occurrences reported related to poor sound quality (e.g., feedback, high-pitched noises, interference) and that resulted in fatigue, headaches, and hearing sensitivity. Two of these hazardous occurrences were related to remote interpretation (teleconferences), while the remainder were related to traditional interpretation.

With increased use of videoconferences over the last two months, there has been an increase in incident reports from interpreters, including headaches, earaches and fatigue due to poor sound quality. No acoustic shock or other injury requiring hospitalization has been reported.

From March 16, 2020 to April 29, 2020, there were no reported disabling or minor injuries. There were 39 other hazardous occurrences reported that related to poor sound quality that resulted, most commonly, in headaches, hearing sensitivities, and fatigue. Fourteen of those hazardous occurrences were related to teleconferences; 25 were related to videoconferences.

TB has provided its interpreters with headsets with sound limiters to protect against acoustic shock and implemented a series of hygiene and physical distancing measures. In addition, the Bureau requires its clients to take technical measures that promote not only the health of its interpreters but also high-quality interpretation. These include having a qualified audiovisual technician present at all times, remote participants’ use of good quality headsets with built-in microphones and good quality Internet connections, and the provision documents to interpreters in advance of meetings.

TB’s approach aligns very closely to international best practices, including the International Association of Conference Interpreters principles, guidance for institutions and best practices.

Federal construction work

Context

On May 11, commercial construction re-opened in the province of Quebec, and on Thursday, May 14, the Government of Ontario communicated that all construction work could resume effective May 19.

Suggested response

• The health and safety of Canadians is our top priority as we respond to the COVID-19 pandemic
• On May 11 and May 19, commercial construction re-opened in the provinces of Quebec and Ontario respectively, enabling federal construction projects to recommence in alignment with measures prescribed by public health authorities
• We continue to work with our industry partners, and the provinces and territories, to ensure that strict health and safety protocols, including appropriate physical distancing and face covering protocols, are in place to prevent the spread of COVID-19 on our worksites

If pressed on the Parliamentary Precinct:

• Construction activities continue on the Centre Block and the East Block but are limited to activities undertaken in unoccupied spaces. Necessary repair and maintenance work required for the safe operations of parliamentary facilities continues
• These projects are aligned with the Government of Ontario’s direction, and we have put in place industry-leading health and safety protocols to ensure appropriate physical distancing and compartmentalization of the construction site.
• As the province moves towards opening the economy, Public Services and Procurement Canada (PSPC) will assess the re-opening of construction projects in close collaboration with Parliament

If pressed on the Canadian Construction Association (CCA) request to support industry:

• The Government of Canada will continue its ongoing collaboration with the CCA in key areas as we navigate the reality created by the COVID-19 pandemic
• PSPC officials have been actively participating in discussions with the industry. We will continue our work to ensure the health and safety of construction employees, and to continue those projects that can meet the protocols established under provincial authorities

Background

PSPC continues to monitor the situation to ensure that any decision regarding construction sites respects the advice of public health officials and aligns with the CCA’s standardized COVID-19 protocols for all Canadian construction sites and respective provincial and territorial government direction.

The CCA has voiced their support for keeping federal construction sites open and its workforce employed on project sites that can meet a high standard of health and safety measures and that involve defence, security, infrastructure and the administration of justice and government. Federal unions (e.g., Unionized Building & Construction Trades Council) wrote to the Minister directly expressing their gratitude for maintaining jobs by keeping the Parliament Hill site open specifically, noting that it is among the safest in the country.

Projects not aligned with the revised Province of Ontario directives have paused construction work. The 85 demobilized projects are in three primary categories:

• Interior fit-ups (e.g. office fit-ups in Parliamentary administrative leased space at 50 O’Connor; retail and operational space fit-up in the Wellington Building)
• Interior improvements (e.g. Drywall repairs and patchwork in the East Block; ceiling and radiator repairs in the Confederation Building; marble stone repairs in the Sir John A. Macdonald Building)
• Exterior repairs (e.g. window seal repairs to the Justice Building; window replacement/repairs to the Confederation Building; masonry maintenance on the Office of the Prime Minister and Privy Council; National Press Building exterior envelope)

Status of the Long Term Vision and Plan for the Parliamentary Precinct

Context

Public Services and Procurement Canada (PSPC) is implementing the Long Term Vision and Plan (LTVP) – a multi-decade strategy to restore and modernize the Parliamentary Precinct.

Suggested response

• In partnership with Parliament, we are restoring the Parliamentary Precinct for future generations of Canadians, and making it modern, safer, greener and more accessible
• Our focus is on restoring the Centre Block and transforming the Precinct into an integrated parliamentary campus
• The Centre Block is the most iconic heritage building in Canada—we are committed to preserving it for Canadians and modernizing it to support 21st century parliamentary requirements
• Throughout the COVID-19 crisis construction activities have continued on the Centre Block and East Blocks in alignment with the Government of Ontario’s direction, with industry-leading health and safety protocols in place to ensure appropriate social distancing and compartmentalization of the construction site
• The construction work in the Parliamentary Precinct will ramp up now that Ontario has expanded allowed construction

If pressed on governance and costs for the Centre Block:

• PSPC is committed to working in partnership with Parliament throughout this process
• There are a number of important decisions that need to be made before we can determine a baseline scope, cost and schedule
• Key to getting this right is ensuring a clear understanding of Parliament’s requirements, and a decision making framework that Parliament supports

If pressed on redevelopment of Block 2:

• A design competition is being used to transform aging and underutilized Crown-buildings into a sustainable and integrated campus that supports a 21st century Parliament, while building a respectful complement to Canada’s capital
• A design competition will bolster innovative ideas and promote design excellence, all of which reflect the significance of the site. In fact, the original Parliament Buildings were the result of a design competition held in 1859

Background

The LTVP was first approved in 2001 for the restoration and modernization of Canada’s Parliamentary Precinct. All major projects continue to track on time and budget.

PSPC has invested approximately $3.5 billion in the Parliamentary Precinct to-date, which has created over 25,000 jobs in local and national economies in, for example, engineering, architecture, construction, manufacturing and skilled trades sectors.

The restored West Block and Senate of Canada Building and the new Visitor Welcome Centre (Phase 1), were transferred to Parliament in fall 2018. These projects followed the completion of the 21 key projects since the Library of Parliament in 2006, including the 180 Wellington Building (2016) and the Sir John A Macdonald Building (2015).

Efforts are now focused on restoring and modernizing the Centre Block and leveraging the remaining 23 assets in the Precinct to create an integrated parliamentary campus that addresses Parliament’s long term requirements, including material handling, the movement of people and goods, accessibility, sustainability, and security.

Restoring the Centre Block is a core objective of the LTVP. It will be the largest project of its kind in Canadian history. The program is on track and several key milestones have been accomplished:

• A series of enabling projects ranging from the construction of a temporary loading dock to the re-location of the Books of Remembrance are now complete
• The most comprehensive assessment program undertaken in the precinct to date is now complete. It includes 100 field surveys, 900 openings, 2000 inspections, 10,000 tests and samples, and 20,000 heritage assets recorded
• Demolition and abatement has begun on floors 4-6 of the Centre Block. In addition, excavation of underground infrastructure in the footprint of the Phase 2 Visitor Welcome Centre is underway

PSPC is working with the Parliamentary Partners (Senate, House of Commons, the Library of Parliament, and the Office of the Prime Minister and Privy Council) to finalize their functional and design requirements (e.g., number, size and types of functional spaces such as offices and committee rooms). The outcomes of these assessments and outreach will directly support the design efforts of the building rehabilitation. The completion of the schematic design is planned for spring 2020. This will inform the baseline scope, schedule and budget for the Centre Block rehabilitation.

Parliament Hill draws millions of visitors annually and is a key driver of tourism that contributes significantly to the Ottawa economy. PSPC is committed to ensuring that a positive visitor experience continues during the rehabilitation program.

PSPC has leveraged the LTVP to create opportunities for Canadians, including youth and Indigenous Peoples. We have committed to include provisions in all of our major projects’ contracts that would subcontract at least 5% of work to Indigenous firms.

The LTVP is reducing the Government’s carbon footprint. PSPC has already reduced greenhouse gas levels in the Precinct by 56% from 2005 levels and is on track to reach 80% by 2030 while also diverting more than 90% of demolition materials from landfills.

The Precinct is a model for accessibility. It will achieve, and in some cases exceed, accessibility standards. The West Block and Senate of Canada Building include barrier-free access and improved accessibility features in the Chambers, public galleries, offices, meeting places, washrooms and corridors.

Rent relief measures for federal building occupants

Context

Public Services Procurement Canada (PSPC) has put in place measures to alleviate financial pressure on its commercial tenants during a period of low-building occupancy brought on by the COVID-19 pandemic.

Suggested response

• PSPC is committed to providing its building occupants and employees with healthy and productive work environments
• The Department has taken steps to allow tenants to defer their rent payments for a three-month period effective April 1, 2020, for those businesses whose income has been affected by the COVID-19 containment measures 
• On April 24, 2020, the Prime Minister also announced additional details regarding the Canada Emergency Commercial Rent Assistance (CECRA) program aimed at commercial property owners who are experiencing financial hardship during April, May, and June
• PSPC is committed to continue implementing measures, in alignment with guidelines provided by the Treasury Board of Canada Secretariat (TBS), that support a whole-of-government approach

Background

Given the health and safety measures put in place to contain COVID-19, buildings under PSPC’s management are largely empty. As a result, commercial tenants may have experienced reductions in their business volumes.

In line with March 31, 2020, guidance from the TBS on rent relief to external tenants, PSPC has taken steps to allow tenants to defer their rent payments for a three-month period effective April 1, 2020, for those businesses whose income has been affected by the COVID-19 containment measures. To date, rent deferrals were sought by 126 tenants for a total of $1.4 million for the three-month period.

On April 24, 2020, the Prime Minister announced that the federal government had reached an agreement in principle with all provinces and territories to implement the CECRA targeted for small businesses and non-profit organizations. This program will lower rent by 75% for businesses that have been affected by COVID-19 for a three-month period (April to June 2020).

On April 25, 2020, TBS Assistant Comptroller General sent a communique stating that, although CECRA does not apply to PSPC, as a custodian, it is required to ensure a whole-of-government approach to the implementation of the program. As such, custodians are expected to extend similar flexibilities to provide eligible tenants with appropriate rent relief. TBS’s guidance will follow to ensure a consistent approach. Based on expected program criteria, it could equate to a total rent relief of up to $2.8 million (75% of $3.6 million in revenues from 327 leases).

COVID-19 Supply Council

Context

The Government of Canada has created a COVID-19 Supply Council which brings together a diverse group of leaders to provide the government with advice on the procurement of critical goods and services required as part of Canada’s COVID-19 response and recovery.

Suggested response

• The Government of Canada has created a COVID-19 Supply Council which brings together a diverse group of leaders to provide the government with advice on the procurement of critical goods and services to fight the pandemic
• The council will provide advice on building innovative and agile supply chains for goods in common use, such as masks, gloves and disinfectants
• We continue to support Canadians and take the necessary steps to supply Canada with the goods and services to combat COVID-19

If pressed on the departure of a council member:

• The COVID-19 Supply Council has no role in the Government of Canada’s procurement processes or contract awards
• The council is in place to provide advice on the federal government’s work to build up Canada’s supply of personal protective equipment and medical supplies in response to this pandemic
• In the interest of ensuring the transparency of the council’s function, and out of an abundance of caution, a member has withdrawn from the council
• The council will continue to provide valuable advice on building innovative and agile supply chains, including with respect to production, sourcing, shipping and distribution strategies as the situation surrounding COVID-19 continues to evolve

Background

The council will provide advice on building innovative and agile supply chains for goods in wide use such as masks, gloves and disinfectants, including production, sourcing, shipping and distribution strategies as the situation surrounding COVID-19 continues to evolve. It is an advisory body reporting to the Minister of Public Services and Procurement, who serves as the Chair of the council. The council held its first meeting on Friday, May 8, 2020. The council consists of 16 members from across the public, private and non-profit sectors.

Membership

The following is a list of the COVID-19 Supply Council members:

• Bramwell Strain, President and CEO of the Business Council of Manitoba
• Dave McHattie, Vice President, Institutional Relations Tenaris Canada; Chair of the Board of Canadian Manufacturers and Exporters
• The Honourable Perrin Beatty, PC, OC, CEO and President, Canadian Chamber of Commerce
• Tabatha Bull, President and CEO of the Canadian Council for Aboriginal Business
• Diane J. Brisebois, President and Chief Executive Officer of the Retail Council of Canada (RCC)
• Tina Lee, CEO, T&T Supermarkets
• Christine Hrudka, Chair of the Canadian Pharmacists Association
• Jodi Hall, Chair of the Canadian Association of Long Term Care; Executive Director, New Brunswick Association of Nursing Homes (NBANH)
• Sue Paish, CEO, Digital Supercluster and leads BC Supply Hub
• Eric Edmondson, President and CEO, Air Georgian; Chair of the Board of the Air Transport Association of Canada
• François Laporte, President of Teamsters Canada
• Joyce Carter, President and CEO of Halifax International Airport Authority (HIAA); Elected Chair of the Canadian Airports Council (CAC)
• Stephen Laskowski, President, Canadian Trucking Alliance (CTA)
• Sylvie Vachon, President and CEO of the Port de Montréal
• Conrad Sauvé, President and CEO of the Canadian Red Cross
• Paulette Senior, President and CEO, Canadian Women's Foundation

Members were selected for their expertise and leadership in their respective fields and their work on the council will be on a voluntary basis. The council will be convened until the end of 2020, a term that the Minister can extend if circumstances require it.

Canada Post Corporation 2020 first quarter report

Context

On May 25, 2020, Canada Post Corporation released its 2020 first quarter (Q1) results and recorded a loss before tax of $66 million.

Suggested response

• Canada Post is a Crown Corporation that operates at arm’s length from the Government
• Existing declines in transaction mail and direct marketing contributed to a loss in the first quarter, and these declines were further impacted by the COVID-19 pandemic
• Canada Post continues to provide an essential service while keeping employees safe, and remains the country’s leader in e-commerce delivery

If pressed on the $66 million recorded loss before taxes:

• Canada Post’s continues to see increased parcel revenue and volumes
• Increases in costs were mainly due to higher labour and employee benefits, and increased collection, processing and delivery costs from parcels growth

Background

COVID-19 disruption

With parcel volumes rapidly increasing and transaction mail and direct marketing volumes quickly decreasing, COVID-19 is expected to have a larger impact on the business in the second quarter.

Key results for the Canada Post segment in first quarter 2020 compared to first quarter 2019

• Parcels results:
  • Volumes increased by 4 million pieces or 6.1% in Q1 2020
  • Revenue increased by $53 million or 10.4%
  • The growth rate for parcels in Q1 was larger than in the same period of 2019, but remained lower than the growth rate in Q1 2018
• Transaction mail results:
  • Volumes fell by 30 million pieces or 2.2%
  • Revenue decreased by $16 million or 0.6%
  • Ongoing erosion accelerated toward the end of Q1 as many businesses began operating on an online-only basis due to COVID-19
• Direct marketing results:
  • Volumes decreased by 126 million pieces or 10.5%
  • Revenue decreased by $26 million or 8.6%
  • Declines in direct marketing revenue and volumes were larger than in the first quarter of 2019 due to COVID-19, as marketing campaigns were delayed or cancelled near the end of the quarter

Big Bar landslide remediation

Context

The contract for the Big Bar landslide in British Columbia has increased to over $53.5 million since it was awarded on December 31, 2019, at an original value of $17.6 million to Peter Kiewit Sons ULC.

Suggested response

• Public Services and Procurement Canada (PSPC) is committed to open, fair and transparent procurement processes while obtaining the best possible value for the Government and Canadians
• PSPC is providing procurement and project management support to the Department of Fisheries and Oceans Canada (DFO) for urgent remediation work at the site of the landslide, which is preventing salmon stocks from reaching their spawning grounds
• The contractor successfully met the objectives of gaining access to the site, blasting boulders and widening the river channel ahead of the rising waters of the spring freshet. The contractor was tasked with additional urgent work that was time sensitive to the onset of the spring freshet and vital to moving fish past the slide this summer

If pressed on contract amendments:

• It is not uncommon to encounter unanticipated work arising over the course of construction contracts. The continued use of a contractor already on site to perform the urgent work represents a best-value solution for all 
• These urgent works were made possible through contract amendments, and included building a “nature-like” fishway; preparation for a pneumatic fish transport system; and upgrading access for a fish “truck and transport” program
• The site is also in an isolated, remote canyon with harsh weather conditions and constant rock fall danger. The costs associated to perform this work reflect the dynamic nature of the response required at Big Bar to improve fish passage

Background

PSPC is working with DFO to improve fish passage in the Fraser River in response to a landslide near Big Bar, north of Lillooet, British Columbia, that was discovered in June 2019.

On November 27, 2019, PSPC, on behalf of DFO, published a Request For Information (RFI) on www.Buyandsell.gc.ca for the purpose of seeking industry feedback on possible options and capacity to address the Big Bar landslide. 

In accordance with trade agreement provisions and based on the information gathered through the RFI, 5 suppliers were invited to submit a proposal by December 27, 2019. A limited tender process was completed.

The remediation project is occurring on the traditional territories of the Secwepemc Nation, specifically High Bar First Nation and Stswecem’c Xget’tem First Nation. The contract includes an Indigenous Benefits Plan to provide socio-economic benefits to these 2 First Nations consisting of opportunities related to subcontracting, employment, skills and development and training, protocols, community engagement and other measures.

When the landslide occurred, a large volume of rock fell into the river (approximately 75,000 cubic metres). Therefore, removal and restoration of the river will take multiple construction seasons and a long-term response and commitment. 

Without immediate environmental remediation, many salmon stocks native to the upper Fraser River may become extinct. These impacts could result in economic losses throughout British Columbia and pose risks to the food security and culture of many First Nations communities.

Cold spring weather and the consequent late arrival of the spring freshet allowed more time for completing additional urgent works that were made possible through contract amendments.

As of May 29, 2020 there have been eighteen change-orders processed, resulting in a total contract value of $53.5 million. These change orders encompass work such as additional scaling, slope stabilization and protection systems, civil work to support the installation of a pneumatic fish transport system, installation of ancillary equipment to supply water and power to the fish transport system, increased road maintenance costs, costs associated with increased quantities and costs related to additional shifts resulting from weather shut downs, as well as site direct and indirect costs related to the contract extensions.

In addition, it is important to note that the slide site is in an isolated, remote canyon with harsh weather conditions and constant rock fall danger. The costs associated to perform this work reflect the dynamic nature of the response required at Big Bar to improve fish passage.

Procurement of medical gowns

Context

Public Services and Procurement Canada (PSPC) has been working aggressively with domestic and international suppliers to procure medical gowns. These gowns are worn by medical professionals as personal protective equipment (PPE) in order to provide a barrier between the patient and the professional.

Suggested response

• We remain steadfast in our efforts to get safe and effective supplies of gowns to provinces and territories as quickly as possible
• Medical gowns are subject to stringent quality controls, including testing by the Public Health Agency of Canada (PHAC)

If pressed on material shortages:

• The Government of Canada is purchasing supplies from a number of sources and countries, both internationally and domestically
• The global demand for medical gowns is high and there is a worldwide shortage in disposable gown material
• Innovation, Science and Economic Development Canada has identified Canadian textile manufacturers for the domestic supply of disposable and reusable medical gown materials, including alternative materials such as Canadian manufactured house wrap and air bag materials
• This is over and above the efforts provinces and territories are taking to secure their own supply

If pressed on domestic suppliers:

• PSPC has awarded contracts to 16 domestic suppliers for the production of gowns and, through Innovative, Science and Economic Development Canada have connected these domestic suppliers with domestic material manufacturers
• Delivery of domestically-made gowns started in early May

Background

Medical gowns are hospital gowns worn by medical professionals as PPE in order to provide a barrier between patient and professional. Whereas patient gowns are flimsy often with exposed backs and arms, PPE gowns cover most of the exposed skin surfaces of the professional medics.

There is a very high demand for gowns globally. Material usually used for the production of gowns is being diverted to the production of masks. Manufacturers are proposing alternative material for the production of gowns in Canada. On the domestic front, there is also great competition amongst the suppliers for the same resources, resulting in an impact on the price.

Product compliance is reviewed against the technical specifications released by the World Health Organization (WHO). All proposed gowns are reviewed by the PHAC technical team. PHAC has implemented a robust Quality Assurance program. For domestic suppliers, samples are being assessed before production begins and then again once they are delivered to PHAC and prior to distribution to provinces and territories.

In April, Canada was experiencing some delivery delays with gown shipments, however the delivery of domestic gowns started at the beginning of May. With the shortage of material, the global demand for gowns, and the restrictions for physical distancing measures in manufacturing industries, production lines were delayed. With the new restrictions for exporting from China, the customs process is taking longer than anticipated. Imported gowns are now being delivered in low quantities as deliveries by air are affected by the weight of the gowns.

Tabling of Supplementary Estimates A 2020 to 2021

Context

The 2020 to 2021 Supplementary Estimates (A) were tabled in Parliament on June 2, 2020. Items anticipated to attract interest include COVID-19-related procurement funding, funding to continue support for the Government of Canada’s pay system, and investments in the National Capital Commission (NCC).

Funding for COVID-19 procurement

• Funding of $500 million was provided to Public Services and Procurement Canada (PSPC) to meet expected needs related to the COVID-19 pandemic by expanding its procurement scope and to purchase supplies without unnecessary delays
• This funding will allow PSPC to be pro-active and aggressively acquire critical goods and services, such as personal protective equipment and health supplies, for a broad range of essential sectors with urgent needs as a result of the COVID-19 pandemic
• This funding will also be used to prepare against future uncertainties relating to COVID-19 by ensuring market availability and establishing an excess of supply

Continued support for the Government of Canada’s pay system

• PSPC is seeking access to $203.5 million in voted appropriations in 2020 to 2021 [Redacted] to continue to eliminate the backlog of pay issues for public servants and continue delivering and stabilizing pay for the Government of Canada
• The Government of Canada is committed to supporting employees and resolving public service pay issues as quickly as possible
• To continue progress on this front, PSPC sought additional funding to continue efforts to eliminate the backlog of pay issues for public servants, maintain measures to deliver pay and support employees, and stabilize pay for the Government of Canada
• This new funding will primarily help to eliminate the backlog and to stabilize the pay system. To do so, we will
  • Sustain employee capacity
  • Increase our processing rate
  • Increase the automation of as many transactions as possible through system enhancements
• Since the launch of Phoenix, PSPC implemented a series of measures focused on stabilizing the pay system. These include increasing the compensation workforce, providing employees with greater support through our Client Contact Centre, introducing the Pay Pods model, and implementing technical fixes that have improved payroll processing, such as increased automation of transactions
• As a result, over the past two years the Pay Centre's backlog of transactions with financial implications has been reduced by more than half
• We have a series of changes planned to further adapt the pay system to the complex needs of the Public Service
• In addition to efforts underway, we are working closely with all stakeholders, including experts, federal public sector unions and the private sector for innovative solutions to accelerate pay stabilization
• We continue to regularly share information on progress with employees and Canadians through various platforms and tools

National Capital Commission funding

The National Capital Commission is seeking approval to access $52.4 million:

• This investment in support of critical repair and maintenance work will assist the NCC in ensuring that major infrastructure assets remain safe, resilient and enjoyable for current and future generations of residents and visitors to the National Capital Region. Examples include the maintenance and rehabilitation of NCC’s two interprovincial bridges, and repairs to assets damaged during the spring 2019 floods
• We will continue to work with the NCC, its partners and stakeholders to ensure that infrastructure and other valuable federal assets are restored and maintained to meet the needs of Canadians
• Examples of major projects that will be completed with these funds include:
  • Portage and Champlain Bridge maintenance and rehabilitation
  • Flooding damage repairs
  • Park rehabilitation (Nepean Point; Jacques Cartier Park, etc.)
  • Deferred maintenance of rental properties

Background

The Supplementary Estimates adjust the Government of Canada’s in-year expenditure plan as set out in the Main Estimates, usually to account for unforeseen or additional requirements that were not sufficiently developed in time for inclusion in the Main Estimates or for which a source of funds was not yet identified.

The 2020 to 2021 Supplementary Estimates (A) were tabled in Parliament on June 2, 2020.

Funding for COVID-19 procurement

Funding of $500 million is being sought by PSPC to meet expected needs related to the COVID-19 pandemic by expanding its procurement scope and to purchase supplies without unnecessary delays.

Government of Canada pay system

In addition to the $203.5 million in voted appropriations sought in 2020—2021 to support the Government of Canada’s pay system, PSPC’s Supplementary Estimates A page proof includes the Employee Benefit Plan(EBP) of $41.6 million but excludes [Redacted]

National Capital Commission investments

• The National Capital Commission is seeking approval to access $ 52,404,000
• Examples of major projects that will be completed with these funds include
  • Portage and Champlain Bridge maintenance and rehabilitation
  • Flooding damage repairs
  • Park rehabilitation (Nepean Point; Jacques Cartier Park, etc.)
  • Deferred maintenance of rental properties

Indigenous procurement process

Context

Public Services and Procurement Canada (PSPC) has been procuring medical supplies and personal protective equipment (PPE), and is working to increase the participation of Indigenous businesses in federal procurement.

Suggested response

• The Government of Canada is committed to increasing the participation of Indigenous businesses in federal procurement
• We are working with Indigenous Services Canada and the Treasury Board Secretariat to create more opportunities for Indigenous businesses to succeed and grow, by creating a new target to have 5% of federal contracts awarded to businesses managed and led by Indigenous Peoples
• As we move forward, we will continue to look to increase business opportunities for companies managed and led by Indigenous Peoples

If pressed on Indigenous participation in federal procurement for COVID-19:

• To date our focus has been on putting personal protective equipment in the hands of front line health employees as quickly as possible
• As part of these efforts, we have awarded a number of contracts to Indigenous businesses worth millions of dollars
• Last week PSPC launched a Request for proposal (RFP) for the purchase of 50 million disposable non-medical face masks. For this RFP, there is a dedicated stream for Indigenous businesses
• As we move forward, my department will continue to work with other federal organizations and Indigenous groups to increase the participation of Indigenous businesses in federal procurement

Background

In response to the COVID-19 pandemic, PSPC has awarded 9 contracts to 6 Indigenous businesses, collectively worth nearly $22 million including for masks, hand sanitizer and thermometers.

PSPC is working actively with Indigenous groups to increase their participation in federal procurement more broadly. This includes ongoing work with the Indigenous Business COVID-19 Taskforce, which brings together numerous indigenous groups, including the Canadian Council for Aboriginal Business (CCAB), National Aboriginal Capital Corporation Association (NACCA), Inuit Tapiriit Kanatami (ITK) and Pauktuutit Inuit Women of Canada. The taskforce seeks to identify and mobilize Indigenous businesses to provide medical equipment and supplies, including by creating a database of Indigenous businesses. Indigenous Services Canada is the lead department federally, with PSPC supporting the taskforce’s work. PSPC will seek to leverage the database, once it has been made available by the taskforce, to increase the participation of Indigenous businesses in federal procurement.

In addition, PSPC works in close collaboration with the Council for the Advancement of Native Development Officers (CANDO), a national Indigenous organization involved in community economic development. The partnership is focused on helping the Council and its economic development officers support Indigenous businesses across Canada by providing information, focused access, and services from the Office of Small and Medium Enterprises.

The Minister’s Supply Council includes the CCAB. This council provides the Minister with ideas for strengthening and streamlining the government’s efforts to support essential services organizations in accessing supplies in the context of the COVID-19 pandemic.

In addition, the Minister’s Supplier Advisory Committee contributes to understanding and addressing barriers that smaller businesses face in federal procurement, including those faced by Indigenous-owned businesses. The Canadian Aboriginal and Minority Suppliers Council (CAMSC), represented by its President Cassandra Dorrington, has been an active and contributing member since the Supplier Advisory Committee’s first meeting in 2013.

Over the last two fiscal years, PSPC under its own delegation, has awarded 465 contracts (including call ups and amendments) on average per year, valued at $18.3 million annually to Indigenous suppliers, which represent 3% of PSPC total awarded procurement (based on value under its own delegation). During that same timeframe,

PSPC, as a common service provider, has awarded 867 contracts (including call ups and amendments) on average per year, valued at $323 million annually to Indigenous suppliers, which represents 1.9% of its total awarded procurement (based on value).

Table 3: Contracts Overview

	Number of contract	Amount
Indigenous suppliers	9	$21,964,785.50
Non-Indigenous suppliers	398	$5,647,942,663.76
Total	408	$5,678,285,175.55

Table 4: Contracts with Indigenous Suppliers

Suppliers	Commodity	Number of contracts	Amount
ACT (Advanced Chippewa Technology) Inc.	Canada Revenue Agency (CRA) uses HP LoadRunner Enterprise Virtual software to test benefit applications, which had to be scaled-up due to increased volumes. ACT is an HP reseller.	1	$959,709.00
ARA Pharmaceuticals Inc	Thermometers and hand sanitizer	2	$5,191,399.27
Dalian Enterprises & Coradix Technology Consulting in Joint Venture	IT Professional Services for the Canada Border Service Agency’s Mobile Border App	2	$1,870,303.68
Grand Medicine Health Service	Thermometers	2	$213,750.00
Guardsquare	Canada Border Services Agency uses Guardsquare software to track information from travellers returning to Canada (Note: not included in roll-up for Indigenous businesses as we are confirming this is an Indigenous company)	1	$63,340.79
IES Energy	N95 masks	1	$13,650,400
VitalAire Canada Inc.	Medical and laboratory equipment & supplies	1	$79,223.55

Polar Icebreaker

Context

The Government of Canada is exploring procurement options for construction of the Polar Icebreaker. No decision has been taken.

Suggested response

• The Government of Canada is committed to the National Shipbuilding Strategy and getting the women and men of the Royal Canadian Navy and the Canadian Coast Guard the equipment they need to do their jobs protecting and serving Canadians
• On February 28, the Government of Canada issued a Request for Information (RFI), open to all Canadian shipyards, seeking information on domestic shipyard capability and capacity to construct and deliver a Polar-class icebreaker
• The RFI closed on March 13, 2020 and Public Services and Procurement Canada (PSPC) has received 4 responses
• The information gathered through this RFI will help the government determine how best to proceed so that the polar icebreaker is delivered in the most timely and efficient manner

Background

The government is exploring options to ensure the Polar Icebreaker is built in the most efficient manner.

On February 28, the Government of Canada issued a RFI, open to all Canadian shipyards, seeking information on domestic shipyard capability and capacity to construct and deliver a Polar-class icebreaker.

This follows standard procurement practices, and the information gathered will help the government determine how best to proceed so that the polar icebreaker is delivered in the most timely and efficient manner.

The information collected from this RFI will be used to inform the Government of Canada's decision about the future of the CCGS Diefenbaker, but no decision has been taken at this point.