Canada’s Minister of Health Jean-Yves Duclos speaks during Question Period in the House of Commons on Parliament Hill in Ottawa, Ontario, Canada March 3, 2022. REUTERS/Blair Gable
The federal government’s procurement department has referred three cases of suspected fraudulent subcontractor invoicing to the RCMP, and says it will attempt to recover around $5 million in funds.
“These fraudulent billing cases are unacceptable. Rules are in place to ensure that taxpayer dollars are protected and systems must be in place to make sure that those rules are being followed,” said Jean-Yves Duclos, minister of public services and procurement Canada, during a press conference on March 20.
“Fraud undermines our ability to ensure value for money on behalf of Canadians. And the department will continue to proactively detect and investigate all suspicions of fraud.”
According to a government briefing, Public Services and Procurement Canada (PSPC) discovered through an investigation that three subcontractors were fraudulently billing 36 different government departments for various contracts for work completed under the same period of time. The scope of PSPC’s investigation involved billing schemes between 2018 and 2022, according to the department.
A department official told reporters that PSPC was investigating between five and ten other individuals, but would not give more details due to the investigations being ongoing. The official said if elements of criminality are found, they will also be referred to the RCMP.
Mr. Duclos said after the allegations were discovered, PSPC took “swift action” to suspend the security clearances of the subcontractors and refer them to the RCMP. While Mr. Duclos said he would not give too many details on how the alleged fraud occurred due to it being under investigation, he said the storing of billing in a paper format had allowed incidents of over-billing to occur.
New Procurement Regime
Mr. Duclos said the federal government’s current procurement regime, which has been in place since 2015, does not currently allow it to take action against a supplier “accused of serious offences, such as fraud or human trafficking, violations of the code of conduct for procurement, or conviction under federal environmental laws.”
Additionally, the current system does not allow measures to be taken against a supplier debarred in other jurisdictions. As such, the federal government is launching a new Office of Supplier Integrity and Compliance (OSIC), which will replace the existing framework.
Mr. Duclos said the OSIC will allow the federal government to “better respond to wrongdoing and further safeguard the integrity of federal procurements.” PSPC will also introduce additional measures to enable it to take “quick action” against suppliers of concern, including broadening the scope of offences that can lead to debarment or suspension, including offences under the Criminal Code.
Treasury Board President Anita Anand also announced a series of measures to strengthen oversight of government management practices, including a new risk and compliance mechanism to analyze government-wide trends, and a horizontal audit that the Comptroller General will undertake next month across several departments.