March 22, 2022
The
Committee met at 9 a.m. in the House of Assembly Chamber.
CHAIR (Wakeham):
Good morning, everyone.
We're
ready to reconvene our public hearing. This morning we are joined by Ms. Lori
Anne Companion, welcome. We'll get started and before we do, I'll just give you
a little update of what we've been telling all of the other people who have come
and shared their questions and answers with us.
We
remind participants that this is a public meeting and their testimony will be
part of the public record. There is a live audio, which will be streamed on the
House of Assembly website at assembly.gov.nl.ca, and an archive will be
available following the meeting.
Witnesses appearing before a Standing Committee of the House of Assembly are
entitled to the same rights granted to Members of the House of Assembly
respecting parliamentary privilege. Witnesses may speak freely and what you say
in this parliamentary proceeding may not be used against you in civil
proceedings.
I will
ask the Clerk shortly now to administer the oath or affirmation to you. Clerk,
would do that, please?
Swearing of Witnesses
Ms.
Lori Anne Companion
CHAIR:
Ms. Companion, we've been
asking all of the witnesses if they would like to have a few opening remarks. In
your opening remarks, if you would kind of give us an indication of what your
involvement was with this particular contract during your time as a deputy
minister, as part of your opening comments, that would be great.
Thanks.
L. COMPANION:
Good morning, everyone.
It's a
pleasure to be here. Lori Anne Companion, I was the deputy minister of
Transportation and Works from January of 2015 until February of 2017. I would
have been a public servant for 34 years. I was a deputy minister for seven years
in total and a member of the Executive for 18 years. I retired November 30,
2019. That was almost two years after this AG report had been started.
I would
just like you to know that I was not involved in the review or the discussions
about the AG's report or the AG's review to provide any factual content or extra
information or anything of that nature. So I'm happy to be here today to be able
to work with the Committee and the AG and the department to be able to provide
any context that I can that was happening during my time.
I have
read this report numerous, numerous, numerous times and when I went to the
department – to give you some context – it was at the end of January, the
contracts, of course, had been long let, the vessels were well under
construction, it was rolling along, things were happening, the meetings were
happening and it wasn't really a major issue for me at that time. There were a
lot of major issues, as it is when anyone moves to a new department – a lot of
issues. But that wasn't a big heartburn issue for me at that time.
So I
was, from that period when the construction was ongoing to when the vessels were
completed, launched and sailed to Newfoundland and when the
Legionnaire was docked in Lewisporte
– and it was still docked in Lewisporte when I left the department in February
of 2017. During my time in the department was when our on-site supervisor
unexpectedly was unable to do that work anymore. We had significant staffing and
human resource issues. We definitely didn't have the kind of resources that you
would want to need. But that is the way it is in the public service. We'd all
want more resources; we'd all want more capacity to be able to do more things.
Our
on-site supervision at that time – and it was the recommendations of my team;
they were very involved in the oversight and in talking to Damen and in talking
to the on-site supervisor when he was there, and working with all of the groups
on a regular basis. It was a big preoccupation. And then when the vessels came
and we were doing our training, the only thing – I thought about it so many
times – what, in hindsight, would I have done differently. Would I have made
sure I would've probably kept my finger on it, tighter? I thought about it so
much. But I think, in hindsight, the only thing I can think that I could have
done differently, or my team really could have even done differently, given the
resources that they had and the way that we were structured, was if I had kept
my finger on making sure the training happened earlier, in January, when that
vessel arrived, and made sure more people got trained quicker.
But the
training did happen. It did happen just over a longer period of time. Then
finally, I think, one of the really significant factors that happened during my
time was – I mean, Max Harvey was the ADM. Max was very competent and very
senior in being able to run this project and being able to do that work. I
counted on him entirely and his advice from a marine perspective.
Then
when Max left us, that was a big change to happen in the middle of a very big
project that we had going on. Max's involvement with the project had been
long-standing. That happened just before I left, that was in October, and then
in February I left the Department of Transportation and Works to set up a new
Department of Fisheries and Land Resources with the government.
I'm
happy to answer any questions, provide any insight and to provide any learnings
that I had in the department about public service, public service delivery,
public service structure. I learned some pretty significant things about when
you're restructuring governments and when you're restructuring departments,
you're looking for ways to find more efficiencies and for things to happen
better. Well, by just putting two branches together under the one deputy and the
one minister doesn't work. I mean, you just don't get your efficiencies.
You
need to dismantle your department and put it back together, and that takes a lot
of courage, a lot of stamina, a big change management process, but that is the
only way that you really get – and I have been involved in four significant
department restructurings. Three of them I led. One I was the ADM and the
support to the deputy; the only way we were able to really get some
efficiencies: You have to dismantle and put it back together in a way that you
get things to happen properly and the way you had envisioned.
That
was one of my significant learnings. The last thing I did before I left the
department, I had an opportunity in December that year of 2016, that the
government was interested in looking at can we restructure; can we find ways to
find more efficiencies. It was a real opportunity that I felt, because it was
clear to me when I was in Transportation and Works– in my short time – that the
Department of Public Works, many years ago, and the Department of Transportation
had been combined and it became the Department of Transportation and Works. But
the Department of Transportation still functioned as the Department of
Transportation and the Department of Public Works still functioned as the
Department of Public Works and there were a lot interdependencies that really
needed to happen.
But we
were really running two departments with one deputy and one minister. So when I
had the opportunity in that December and January that I could restructure, then
I took full advantage of that. I totally dismantled the department and put it
back together so that we would have all infrastructure under one branch,
regardless of if it was bridges, wharves, buildings or vessels. It didn't matter
because the Infrastructure Branch was the project management experts in the
government. And I felt that if the Infrastructure Branch had all of the
oversight for project management, contract management and the project management
processes, then Marine Services would be a client of the Infrastructure Branch
and they would provide the expertise from the Marine perspective, while they
were still running the Marine branch.
Just
like we do with Health. We have Health as a client for the Infrastructure
Branch. They have expertise in hospitals and what's needed and the kinds of
thing. But the Infrastructure Branch has the expertise in project management and
contract management – just as importantly.
So that
was one of my last actions that I took and I'm very proud of that one because it
really did make a difference on a go-forward basis. We were able to develop new
procurement methodologies. We moved on our P3 processes. This group became and
have become – and I think still are and still growing – amazing experts in
project management and in contract management for the government.
CHAIR:
Thank you so much.
The way
we conduct this is basically each Member will take about 10 minutes. We'll put10
minutes on the clock and we'll go through 10-minute sections so everybody gets
to ask a few questions.
So
we'll start with MHA Scott Reid.
S. REID:
Okay. Thank you very much
for attending, I appreciate it.
I
think, given you're a career civil servant, you've got a lot of experience and
I'm happy that you're here because I think you may be able to provide some
insight to some of the questions that I've been asking through these hearings.
I guess
the report outlines some things that went wrong and gave some indications of why
they went wrong. My focus has been to sort of look at going forward, what
lessons can we learn? What are the root causes of these problems and how do we
change to address them in the future? I think your experience may help us get to
answering those questions.
There
are two things I'm particularly interested in that is highlighted in the report
for me. One is the duty to document. I'm interested in terms of – it seems to be
clear that significant documentation throughout the process was not kept. I'm
wondering about that and why and what could be done to improve that? Also, I'm
interested in the idea of the training. My thought is that relates to culture
within the public service. I'm wondering what your thoughts are on that.
I know
the federal government – you're probably aware as well – has done some work in
terms of renewal of the civil service at the federal level and has done things
like service excellence and done things to create a more innovative environment
within the public service. I'm just wondering do you have any thoughts on that,
based on your experience within this department, within the civil service over a
long period of time.
L. COMPANION:
Thank you, Scott.
The
duty to document, I mean, that's been raised many, many times in many
departments. I worked in almost all of the government departments over my
career, I guess what I had found in the Department of Transportation and Works,
is there was obviously a serious documentation issue. But what I can say is that
in my previous departments where I was a senior leader, there were significant
resources dedicated and devoted to information management. So we would have had
information, like in Child, Youth and Family Services. Document control
information management is a big robust part of that department.
In
advanced education and skills: documentation. We had Income Support: big, big,
big programs. There was a big robust kind of division with dedicated resources
who worked with all of the department in that way.
But in
Transportation and Works, it became really clear to me really early that we did
not have that kind of support system in place and the staff were definitely not
able to do that on their own. We had a lot of technical people, a lot of very
specific kinds of jobs that people did. It certainly wasn't a policy shop or a
think tank from that perspective.
The
duty to document has been raised numerous times by the Privacy Commissioner,
concerns from an ATIPP perspective when they go looking for – some of their
constituents are very upset about the lack of documentation.
So I
mean what I did in Transportation and Works – and then I'll talk about from a
global government perspective – very early on is we worked with OCIO – it was
called OCIO at the time – and we did an information management needs assessment
and review. When I restructured the department I put dedicated resources for
information management in place so that we could start to work with our ferry
fleets, we could start to work with our construction depots, the 67 that are out
there, and they really need to have good documentation. So put in some dedicated
resources, that was their only job, to make sure that worked with our
department, trained people, taught them how to do it, put in a new system for
information. I think that's ongoing and I think it's been somewhat successful.
But
from a global government perspective there's not a consistent approach
throughout government, as evidenced when I moved from department to department.
It really, then, is up to the deputy and to the department to ensure to make
that happen. Duty to document is a big government-wide initiative that really
needs to take hold so that we don't end up in a situation where we have to go to
a classification society to get a copy of a document that we knew that we
completed, we just don't have a copy anymore.
So I
think that it's a big government-wide initiative that needs to happen, Mr. Reid.
I think there's been a lot of progress in document management over the last 10
years. It's even seven years ago since I went to the Department of
Transportation in 2015, a lot of things have improved in a lot of ways
throughout the government in that time. But to have a consistent, wide,
government-driven document process is the only way to have it standardized, I
would say.
Training, you want me to talk about training?
S. REID:
Yes.
L. COMPANION:
Definitely.
So
training, I would say that in the department – I'm going to talk about the
department first now, and then I'll talk about government.
In the
Department of Transportation and Works, when I went there, actually training was
happening more in the Department of Transportation and Works than I would have
seen in other areas throughout my public service career. I would say that is
because it was so much more direct service delivery.
So
there was snow school for operators of snowplows. We had a special three-day
snow school that everyone had to go through in order to make sure that happened.
There was a lot of marine training that was ongoing regularly. Mr. Harvey and
his team had developed some pretty impressive simulation training with Marine
Institute, and still work with the Marine Institute. I think that might have
been the first time that happened and it was very, very good, in my opinion.
But
there is always a need for more training. I wasn't overly concerned with the
amount of training that was happening in the Department of Transportation and
Works. It wasn't on my top 10 list that I just could not let go because it was a
very urgent issue. That said, we could do with a lot more training with a lot
more people throughout government.
So
then, from a government perspective, we have the Centre for Learning and
Development, which provides training opportunities for the government. But
unless you reach out, it is kind of a service delivery where you go to the
centre, you get service for training and you take it away. I don't really have
an opinion on whether that is the model that is the right model; I don't really
know. I'm not a certified trainer. I don't know if that is the right approach.
But
that would be my view, that it is a service delivery. I reach out to the Centre
for Learning and Development to help me develop some training. I did it in CYFS.
I did it again in Transportation and Works; we did a lot of training on safe
management practices and a lot of training on various issues.
So it
is a service that the government provides and it is a service that you can
access as a department. Now, whether that is the appropriate model, I really am
not able to identify. But I did use it all the time. Every department I was in,
I used the Centre for Learning and Development and it was an appropriate vehicle
for me to get some new training programs developed and some training issued and
done with the department.
S. REID:
Okay.
J. BROWN:
Thank you, Ms. Companion,
for being here; I appreciate it a lot.
My
first question I would ask goes back to training. In the AG report, it did talk
about how the government did negotiate down training with Damen upon delivery of
the ships. We asked the other DMs and the ADMs about it. I just wanted your
recollections on why that was negotiated down into a more compact training,
seeing as some of the issues that later followed were caused by human error due
to lack of training.
L. COMPANION:
Thank you very much.
What I
will say is the crews were the same crews that ran the vessels now, provided the
service delivery. We had to take them off their runs in order to train them for
these new vessels. The only time we could take them off their runs was during
their off-time and if you look at the public records of public disclosure on
salaries, you will see that some of the most highly paid people in the public
service are the ferry workers. And that is because they work so much overtime.
There is so much lack of resources. There are so many needs.
I
wasn't personally involved in the decision to reduce the training, of course,
but, at that time, we continued to deliver those services. There was no
acceptability from the stakeholder perspective that we would reduce those
services in any way, shape or form, or not provide runs, or take the third ferry
out of service so that we could take our staff and provide 10 days of sea trial
trainings or 15 days.
So I
think – and I've thought about it a lot – that the staff did the best they
could. The team did the best they could. That they did as much training as they
could do while providing the services that they had. If we had a separate team
that was able to be trained up and then go and work with the team that's on the
vessel – if we had 15 crew and do that, well, then, we would have done 20 days
of sea training and made sure that everybody was, but that wasn't the
environment. The training was paramount, of course, and there are a lot of
people who have responsibility for the training. It wasn't just the oversight
and the project management team. I mean, the captains have a lot of
responsibility for sign-off.
That
would be the only reason that they would have compressed their training. Now,
they provided some of that training in the future, Mr. Brown, as you would see
in the report and as I would know in the department. When I said at the
beginning that my thought about what would I do different, I probably would have
made sure that we provided all of that training more upfront than as we went
along.
J. BROWN:
Thank you so much.
Another
thing that comes up across was with the builder's agreement there that they had
about the Centre for Excellence. We heard that a few times: the support and
service centre and the Arctic program.
Your
former DM, Brent Meade, said that he was part of the negotiations of that at the
time. Then we spoke with Ms. Tracy King, DM King, and she said during her time
it wasn't discussed. We were wondering during your period of time as DM, was
that Centre for Excellence in discussions or any insight you can give to us what
happened there?
L. COMPANION:
I was definitely aware of it
– definitely. So if I was aware of it, there were absolutely discussions that
happened. I was aware of the commitment of Damen for these industrial benefits
that were going to be provided as the contract became completed. Even though I
was not the person to have those discussions, but I am very much aware that Mr.
Harvey did have those discussions with the economic department – it's changed
name a thousand times, so I don't know what it's called now. But it's the
economic department for the government INTRD or BTCRD at the time.
The
Department of Transportation and Works had no expertise to do industrial
benefits. The only role they could have played would be to provide some marine
information to support the economic department in the advancement of those
industrial benefits, and I believe that Mr. Harvey did his best to reach out to
the economic department and to speak and to discuss the industrial benefits that
we committed to in that contract. But that's what I know.
J. BROWN:
Thank you, Ms. Companion.
Another
thing, too, that came up was progress reports. We did discuss it with Mr. Harvey
and Mr. Meade. A lot of reports that came back to the department were just an
email with photos. There was no written report to go along with them. Why was
this allowed by the department, that we were just accepting pictures of the boat
instead of actual written documentation?
L. COMPANION:
Well, I think, Mr. Brown, it goes right back to duty to document, document
control. Document management wasn't the priority, I will say, in a very highly
service-oriented department; document control was not the priority. In a very
complex environment of running those operations, very significant operations and
doing this significant project, I would say that the pictures provided them with
the information that they felt they needed at that time.
It
wasn't a big issue that the staff would have done, at the time, writing up
reports, that's not how they rolled. They were very operational and I would
imagine that they would have thought that this was an acceptable format as well,
at the time, given what they needed. Could there have been more? Absolutely.
J. BROWN:
Another question, Ms.
Companion: Did you think, at the time, that you were allocated enough resources
and staff in the department to take on such a project, or did you feel that you
had sufficient resources and allocation given to your department at the time to
handle this project or did you feel that it was just kind of brushed over?
L. COMPANION:
I thought about it a lot and in the public service there are not too many deputy
ministers who wouldn't feel, oh man, I need more resources, I need more people,
I need someone to keep their finger on this file, I need some to be dedicated.
But for me, when I went to the Department of Transportation and Works, the
resource needs that we had were not only in project management for the vessels,
the resource needs were significant.
If we
could have gotten the people to do more oversight or more work, then, as the
deputy, I would support a reallocation to do that, but we couldn't find any
people. We had vacancies; we were constantly running our staff – running them,
running them to take care of services to be provided. It wasn't a matter of – I
don't know, I'm sure more money always works for departments; you can always do
good work with it. But the main issue for me in Transportation and Works and
with the oversight and the building of these vessels was that we could not hire
people.
We
couldn't get marine engineers; we couldn't get crew. The oil industry, at that
time in '15-'16, was very hot and there were other jobs that were less onerous
and demanding that paid more money that people went to. So we had a lot of
turnover all the time.
I don't
have access to our vacancy reports or our staffing actions at that time, but I
know in the Department of Transportation and Works, not just in marine
infrastructure, a daily part of my administration was signing staffing actions
to get out there so we could get people for transportation, roads, depots, snow
clearing, for vessels, for all kinds of things.
So I
attribute not being able to provide as much oversight as the Auditor General
would have wanted us to provide to being not able to get the resources.
J. BROWN:
Thank you, Ms. Companion.
L. STOYLES:
Thank you (inaudible).
I guess
we've all had a lot of questions the past day or so.
So you
came in just as the ships were almost completed or completed?
L. COMPANION:
Yes.
L. STOYLES:
I guess when you came into
the department – one of the questions and the concerns we had was because the
boats were still in Romania and there for – well, the
Legionnaire was there for 20 months
for most of the time that you were in the department. So the concerns when you
came, was there more of a – I don't want to say crisis situation when you came
into the department, but from what we were hearing there was a problem from the
beginning with the project manager. They could've had five people in Romania and
there was only one person there. They could've sent other people over. We've
heard over the past day or so that had to do with the cost and we didn't send
them over because we didn't have people to go because it was too expensive to go
and stuff like that.
But
after you came into the department, the concern was the wharf wasn't ready on
Bell Island because – why didn't that happen when the RFP went out and they knew
we were building them and what we were getting? We had all the information but
nobody started to do the work on the wharf to be ready for when it came. So it
was almost two years that the ships were ready. So what kind of red flags came
up in the department?
L. COMPANION:
Thank you, Ms. Stoyles.
So I'll
talk about the ship staying in Romania and I'll talk about the wharf.
So the
wharf: the contract was issued for the wharf. The contractor started the work on
the Bell Island wharf and on the Portugal Cove wharf and they ran into equipment
issues. They didn't have the proper equipment. It was a significant delay. Then
there were issues, I understand, with the pilings that they needed to do some
extra work on.
So the
contract was delayed and, you know, that work was being undertaken by the
Transportation, the roads section and the wharf section of the Department of
Transportation. That contract was issued by the Transportation section and
overseen by our Transportation section.
You
know, that contract was delayed with the contractor and there wasn't anything
that Marine Services, really, could have done about that from having that happen
any quicker. You know, the contract went out as soon as possible after
notification that the vessel was going to be procured.
I feel
what that raised for me and the red flag is that we needed to have a greater
interdependency and a greater collaboration. That's why I restructured and put
all Infrastructure under the one branch. Then Transportation would be a client
of the Infrastructure Branch, Marine Services would be a client and the project
management would happen through there.
The
second thing is the vessel staying in Romania. Well, I've thought about the
vessel staying in Romania and I think it was a godsend in some ways. We kept the
vessel there. We asked for the vessel to stay because we didn't want the vessel
to come over without the wharf being completed. And the vessel stayed and we
were able to – and I was actively engaged in this process with Max Harvey –
extend the warranty for the Legionnaire
so that we would not have the Legionnaire
come and not have its warranty.
We were
able to ensure that anything that happened with the
Veteran, in its working out its bugs
in its first couple of years, during the initial operations, that it was able to
be done with the Legionnaire as well.
I think that proved that.
While
the delay was unfortunate at the wharf, it was very unfortunate and very
problematic for us and very worrisome and a very big issue but, you know, while
that was very unfortunate, we do see the benefits of the changes that happened
to the Legionnaire in its initial
operations.
I mean,
the Legionnaire ran very well once it
came to the Island and once it started on its intended run. The
Veteran, in its first two years of
initial operations, that's when all the bugs worked out. Shipbuilding is complex
and bugs get worked out all the time. But the decision to leave the boat in
Romania was a decision that I was aware of, a decision we actively worked with
Damen on, to make sure that we had the boat in a safe place until we could take
it over and get it on its run.
L. STOYLES:
The other thing you
mentioned, you've stated that you've read the report several times. Do you think
there's something that's missing in the report from the AG, something that you
would like to inform us today?
L. COMPANION:
No, not that there are things missing. There are lots of things that in the
Auditor General's view are different from the department's view. The initial
operation period, the department considered it two years; the AG considers it
three years. And I guess what that does for the report is it just magnifies the
issues that were encountered during the initial operations for the department
when we started the vessel operations.
I spent
a lot of time looking at and recalculating and determining what was the real
percentage of time that we didn't have anybody in Romania when we were building
those boats. There were times when there wasn't somebody for the inspection,
there was time when there wasn't somebody for the oversight and then some days
that there wasn't anybody there and there was time when there were two people
and not two people. So I looked at the AG's report from the perspective of what
was the percent that we didn't have somebody, the on-site supervisor – we had
the delegated regulatory inspection agency doing inspections; we had a contract
with them. We had people going over from the department as much as we could
spare and we could send to go.
So from
my review of the AG's report – because that's the only documents I have – is it
was about 37 or 40 per cent of the time that we didn't have a person on site for
the building of that ship. We had somebody there around 60 per cent of the time;
100 per cent of the time, I don't think that's reasonable either, and somewhere
in between I would think 60 per cent and 100 per cent is the right percentage.
That's what I had to get myself comfortable with when I read the report, what
was the real percentage of time, and that's what I determined.
L. STOYLES:
Were there many staff from
the department, not counting the workers going to inspect it and everything, but
I'm talking about staff that went to Romania? Because I didn't see any of that
in the report that anybody –
L. COMPANION:
Many staff that went to Romania? No, not a lot of staff went to Romania other
than those people who were involved in the report. Max went over for the
commissioning when the vessel was launched into the water for the
Veteran, and I went over because they
needed a female to be the godmother of the
Legionnaire and that happened to be
me. So I went over to do the launching of the
Legionnaire and we met with Damen.
But I didn't need to be going to Romania and I didn't think Max needed to be
going to Romania. Max didn't think so either, because he had regular meetings
with Damen all the time and discussions with Damen on a regular basis.
The
most interactions then I had with Damen were when we ran into trouble. So to
make sure that we extended the warranty, to make sure that the changes to the
Veteran were going to happen to the
Legionnaire, those were my priorities
when we started to run into trouble with the
Veteran as it went into initial
operations.
L. STOYLES:
So Max played a very
important role in, the lead role – would you say Max played the lead role in the
department when he was there?
L. COMPANION:
Oh, definitely. The lead role in the oversight –?
L. STOYLES:
Yes.
L. COMPANION:
Definitely. Max was very qualified. He was a commander in the navy; he had a lot
of experience in marine and a lot of experience in project management. Max was
very, very good and competent in overseeing and leading that team to develop
those vessels.
L. STOYLES:
My time is up, so thank you.
S. GAMBIN-WALSH:
All right, nice to see you,
Lori Anne.
L. COMPANION:
Yes, nice to see you.
S. GAMBIN-WALSH:
Thank you for your time.
I just
want to focus a little bit first on the warranty for the
MV Legionnaire. So we noted that the
warranty began on February 1, 2016, so I heard you say the warranty had been
extended to that period?
L. COMPANION:
The warranty didn't start. We talked to Damen, the minister and Max and I. It
was a very high-level discussion, I will say, about the warranties for those
vessels. The Veteran ran into engine
trouble on the way over, when it was coming. So we definitely, definitely wanted
the warranties extended for the Veteran.
We needed the Legionnaire to stay in
Romania until we had the contract completed for the wharf for Bell Island. And
we did not want the warranty on the Bell Island ferry – the
Legionnaire – to start until it got
to Newfoundland and we took acceptance of that ship.
So what
we did was we delayed accepting the ship in Newfoundland waters. Those were
really important issues to us and we worked pretty hard with Damen to make sure
that in the public interest, in the best interests of the stakeholders and in
the best interest of government that we had protected our investment. And we
were successful in that.
S. GAMBIN-WALSH:
Okay.
So
during the first three years of operation, both vessels had a combined
out-of-service period totalling 607 days in equipment failures, vessel damages,
resulted in unplanned cost to the department totalling $4.2 million. Was the
warranty out, at any point in time, which would have contributed to this $4.2
million?
L. COMPANION:
I don't think so, but I don't recall when, exactly, all of the issues happened.
I did look at the report from the perspective of what was the cost to the public
purse, which is what deputies really focus on. Make sure that it's appropriate
because you're charged with the financial administration of the department. I
did look at, from the perspective of the $4.1 million, and it really cost the
government $1.1 million. Because some of these were covered by insurance, some
of them were covered by warranties and the total out of pocket for government
was $1.1 million during the initial operations of the vessels on a $100-million
project, so I was kind of okay with that. I think that that's a reasonable
expenditure for getting a new service up and running.
With
regard to the 600 days, the AG report indicates that the vessels were out of
service for 600 days, but that includes the period that we had received the
vessel – the Legionnaire – and when
we received it – because Damen really needed their shipyard and they needed that
space for us to take that vessel over. So we said, well, send the vessel over.
We had a space in Lewisporte because we had a big terminal in Lewisporte and
we'll continue to dock the vessel there until the wharf is repaired.
So,
from a transportation perspective, the vessel would be considered to be out of
service until it goes in service on its intended run. So it started service on
Bell Island – it was after I left – I think it was in August of 2017. So from
the department's perspective, we would see that the
Legionnaire was out of service 10 per
cent of the time because it had been parked in Lewisporte and it wasn't out of
service, we just weren't ready to – because their other services were provided.
The Flanders and the
Beaumont Hamel were continuing to
provide the service to the residents of Bell Island for sure.
S. GAMBIN-WALSH:
Okay. Thank you very much
for that.
Can you
recall how potential risks were identified for these vessels and what plan was
in place to mitigate problems should they arise?
L. COMPANION:
The risk mitigation and the contracts were all done when I arrived at the
department.
S. GAMBIN-WALSH:
Okay.
L. COMPANION:
So those thought processes and that had long happened by the time I got there. I
would say that my input and work in the department with regard to risk
management was amplified as we worked through new procurement processes. The
humungous learning that happened in the department about the transfer of risk
and as you move up the continuum and how the transfer of risk is to the builder
and not to the government or the owner. That was a huge learning for us. I think
that the risk management and what we learned during the marine vessel
procurement gave us great resolve – great, great, great resolve – as we
developed new procurement methodologies to do it right, to take our time, to
really assure that we assess risk in a big way and that's what that P3 process
does.
S. GAMBIN-WALSH:
Okay. Thank you.
One
more question: The operating manual, it was four months after the
MV Veteran entered service in April
2016 that a completed manual was actually used. What can you tell us about this
operating manual? Who developed it and how were staff operating? What were they
using?
L. COMPANION:
The staff were using an operating manual. The staff would have worked with Damen
and worked with others and they would have been the people who developed the
operating manual.
S. GAMBIN-WALSH:
Okay.
L. COMPANION:
So it would not be like the
staff would not know how to and what that manual contained, that is not
something that comes from the senior management, it's developed with the team
and what are the appropriate operating procedures. It's very technical. So they
would have definitely developed that operating manual and they would have been
using that manual.
S. GAMBIN-WALSH:
So it would be safe to say
it was a working document?
L. COMPANION:
Totally, totally. The same
people who wrote it would be using it, definitely.
S. GAMBIN-WALSH:
Just one more question. So
these two vessels were very advanced in technology and technological – I've
spoken to some individuals who come in to repair these vessels and they're
talking about the touch screens and things like that. To your recollection was
there anything in place to assist the companies who would be hired to repair
these two vessels?
Like
they're complex vessels, they're new to the market over here. What happened
between the company in Romania and – I understand that in the agreement there
was supposed to be some kind of shipbuilding or something developed here in
Newfoundland and Labrador. What happened to ensure that the companies that we
call in today, when a vessel breaks down, actually have the knowledge to come in
and do the repairs?
L. COMPANION:
That's a very good question.
I really do not have an answer for you in that regard. By the time there were
companies coming in – because for the initial operations period, we had people
coming from all over doing repairs on the
Veteran. But now that they're into normal operations, I will say, and things
will happen, things will occur, I am not sure how that transfer would have
happened.
During
the initial operations, I know that the repairs that were being done were being
overseen by Damen, being overseen by Rolls-Royce, were being overseen by various
inspectors and inspection agencies that we hired. There were very, very
significant experts who were engaged during our initial operations period.
S. GAMBIN-WALSH:
Okay. Thank you very much.
L. COMPANION:
You're very welcome.
CHAIR:
Okay, Lori Anne, I've just
got a few questions. I want to follow up on some of the comments and some of the
questions that my colleagues have asked.
The
extended warranty piece that you were able to negotiate, was there an exchange
provided in order to get that extended warranty? What actually did you negotiate
in getting the extended warranty? Was there something that you didn't get after
that, or how did it work? How did you wind up getting an extended warranty from
the company? Did you have to give up anything, I guess, is the basic principle?
L. COMPANION:
No, absolutely not. We were
able to work with Damen, as I said, at a very senior level to ensure that those
vessels – that we protected the financial investment that the government had
made. No, we didn't – Damen was very committed – and I only knew Damen through
my brief interaction with them in Transportation and Works, but they were very
committed. They had a vested interest to make sure that these vessels were going
to be very good vessels. They were committed with us to make sure that we were
protected for as long as could reasonably be expected. They definitely worked
with us to extend those warranties. That was a very good thing for the public
purse.
CHAIR:
The reason I ask that is
because I noticed in the training piece, when you renegotiated on the training
aspect, you had to make changes to the program in order to accommodate the
additional staff and it wound up with less training days –
L. COMPANION:
Yeah.
CHAIR:
– in order to accommodate
more people.
The
other thing, though, that still I don't have an answer to is the whole question
around this service centre, local partnership and Arctic research centre that
was supposed to be part of this contract.
When
Mr. Meade was here he told us that when he left the department this was a very
active file. When Ms. King was here she told us that there was no talk of it
whatsoever. Something happened and it was during your time as a deputy minister.
L. COMPANION:
Yeah.
CHAIR:
I'm wondering where did this
commitment go, because between that period, from the time Mr. Meade left to the
time Ms. King came, there is no talk of it anymore. I'm wondering between
yourself and the other deputy ministers of the other department, what happened
to this commitment because it clearly disappears, it appear?
L. COMPANION:
Absolutely.
I was
aware of that commitment, but I definitely would say that the Department of
Transportation and Works – Max and others – worked with the economic department
who had an industrial benefits division who were really responsible for the
government's industrial benefits progress for large projects and this project
happened to have an industrial benefit that was going to be allocated.
I would
say, Mr. Wakeham, that the staff in Transportation and Works did what they
could, given the expertise that they would have in industrial benefits, to move
that file forward.
CHAIR:
Mr. Meade, in his comments,
alluded to conversations he had with Mr. O'Reilly, I think it was, in that
particular department – Mr. Alastair O'Reilly. I'm wondering if you had
conversations with Mr. O'Reilly or the DM.
L. COMPANION:
No, I did not have conversations with Mr. O'Reilly regarding that issue. When I
became aware of the industrial benefits commitment that was in the contract – I
mean we had a lot going on, not just in Marine Services, in a very large
department. Max and his team were dealing with the business department on that
file, too. So it was not me, no.
CHAIR:
So, at the end of the day,
though, it appears that this commitment, obviously, was not honoured and it has
disappeared. That's one of the challenges we have in trying to understand the
tos-and-fros. I understand the relationship between two departments, but it
would appear that there's no evidence of what – somebody hasn't been able to
tell us yet what exactly happened to it.
L. COMPANION:
Absolutely. I'm not able to provide you with any insight. I will say that some
of that happens when – so Brent left the department and I went there in 2015,
and I think Alastair left BTCRD in 2016, early in the year. That's why deputy
ministers don't carry files in particular themselves because you need to have
staff who are doing that kind of work and those discussions. Max and the
industrial benefits division of the BTCRD were where I felt were the appropriate
places to have that work.
CHAIR:
But as deputy minister,
would you not have been advised by your ADM of the status of any particular
files such as that one in your regular executive meetings? Wouldn't that be
common practice for you to get updates on something like that?
L. COMPANION:
Absolutely. I talked to Max
several times, but, Mr. Wakeham, I am sure and I feel confident in saying that
that wasn't the main concern for me in Marine Services and the delivery of those
two vessels. That would not have been my mandate. I wasn't responsible for
industrial benefits in the government. I felt it was very important for Marine
Services to be engaged with BTCRD. I had no expertise in industrial benefits, my
team definitely had no expertise in industrial benefits and BTCRD was fully
aware and informed of the need and the commitment in the contract to complete
those benefits.
CHAIR:
And that's exactly what I
was trying to get at, was understanding the relationship between the two
departments and who ultimately became responsible for this piece of the
contract.
L. COMPANION:
Yeah.
CHAIR:
So my next question is a
little different. It goes back to a comment you made around your staff
vacancies. When you arrived as deputy minister, you talked about the recruitment
challenges and the retention challenges. Is it fair to say there were a
significant number of vacancies in terms of the ability to be able to do the
training because of vacancies within the core staffing levels for these ferries?
Did we actually have vacant positions that wouldn't allow for that extra crew,
that time that would've been needed for the crew to be off to do the additional
training?
L. COMPANION:
Well, it's a very good question, Mr. Wakeham. I can't tell you if I had staff
vacancies at that particular time because I don't have those documents.
CHAIR:
Sure.
L. COMPANION:
But I would be able to tell you.
But
what I would say is that we had the crews to run the vessels.
CHAIR:
Right.
L. COMPANION:
We ran the Beaumont Hamel and
Flanders and we ran the Fogo ferry
service, and we were constantly, constantly filling our turnovers. We had
eligibility lists and we had all kinds of human resource processes, and what I
would say about the training and trying to compress it is that the same people
who were running those vessels had to get trained. So we had to take them off
the vessels to put them in training, and they could only be off for a very short
period of time because they had to go back on their scheduled run.
So we
had to find a way – and I support Max's decision in that regard – to get as many
people trained as we could in Newfoundland waters when the boat arrived so that
we could continue to provide the service on Bell Island and the
Veteran and still get our people
trained as best as we could in the time that we had available to train. And I
think that as a deputy minister, if there had been an ability for me to be able
to hire an extra crew to put on that vessel to be able to get them trained up,
then I would have done that as a deputy minister. That's what I was used to
doing. I've run billion-dollar departments and it was constant that you put your
resources where the emergency needs are to ensure that we provide the services.
If I
could have had the people and found the people, then I would have done that in a
heartbeat. It's still an industry issue, being able to find marine engineers,
the people for the crew, the bridge engineers. It's still an issue. When we were
sending people over to Romania, we had to take somebody off the vessel or take
them on their downtime to go when they're off the vessel: put them over there,
do the oversight, come back and go on your run. It was definitely playing
checkers.
I know
it sounds terrible if you say, well, we didn't have somebody there for 40 per
cent of the time. I think it's incredulous that we managed to get somebody there
for 60 per cent of the time, because we really did put so much effort into
making sure that all happened and that the services continued, the oversight was
as good as we could do, given we were in Romania.
CHAIR:
Listen, I just wanted to
thank you, on behalf of the Committee, for taking time to come in and speak with
us today. It's been very informative. That's what we're set up to do. It's about
trying to make sure that on a go-forward basis we find solutions to help people.
Thank
you so much. If you have any closing comments you would like to make, we'd love
to hear them.
L. COMPANION:
No, I really appreciate the
opportunity to come. My son was exposed to COVID last week and I was like oh my
goodness, I really want to go to that Committee meeting. So I really am happy to
be here, Mr. Wakeham, I can tell you that.
Looking
at a report or looking at a document, it's very difficult to understand the
nature of what was going on in the department at the time. I just want to say
that when I went to the Department of Transportation, what was my main concern
about the ferries and the vessels? Well, the tariff was a very big issue for me,
the $25-million tariff. We worked very hard to –
CHAIR:
Yes, (inaudible).
L. COMPANION:
I mean we worked very hard.
BTCRD was also involved in that discussion and that issue because they had a
trade division. They were the ones who were writing the letters and doing that
kind of thing. As we moved through and we got close to the vessel coming, we
couldn't bring those vessels into service without having that tariff rectified.
It was a very big issue for us at that time.
So, to
Max's credit, he discussed with the agency, who we had to pay that money to, if
we could work out an arrangement where we could pay over a period of time so
that we could give ourselves some time to still try and get that remission to
happen. We probably paid a couple of months of $100,000 or $110,000, and then I
remember the minister and I very active and very engaged in that $25-million
issue and we were successful. We managed to get that remission for that ferry. I
look at things like that which happened at that time that were well worth the
effort and the energy and the time.
I'll
just say in my closing remarks that I think a lesson learned from my time for
the government, I think we go there, we do our part and we try to move the
needle forward. Everybody does a little bit and you find the department as you
find it. Tracy found it as she found it from me. I found it as I found it from
Brent. You accept it, you move on and you try to do your little piece.
I think
my big learning that I see from my time in Transportation is for future
governments or for future deputy ministers or for future ministers is about
trying to find efficiencies when you're looking at the big structural issues in
government and not making the mistake of just adding A and B and hoping that it
is going to be C. You have to take A and B apart and develop a new A and B. I
think that would be my last comment that I would make.
CHAIR:
I appreciate that. Thank you
so much, again.
L. COMPANION:
You're very welcome.
CHAIR:
Thank you.
We'll
take a short recess now while we wait for the next witness.
Recess
CHAIR:
Welcome back to our public
hearing.
We're
now joined by Mr. Cory Grandy, the deputy minister for Transportation and
Infrastructure, and John Baker, the assistant deputy minister. Welcome,
gentlemen.
The
format, I'll go through some of the housekeeping things, and then we'll get
started. Firstly, to remind you that this is a public meeting and your testimony
will be part of the public record. The live audio is being streamed on the House
of Assembly website and an archive will be available following the meeting, and
Hansard will also be available on the
House of Assembly website once it's finalized.
Witnesses appearing before a Standing Committee in the House of Assembly are
entitled to the same rights granted to Members of the House of Assembly
respecting parliamentary privilege. Witnesses may speak freely, and what you say
in this parliamentary proceeding may not used against you in any civil
proceedings.
Shortly
I'll ask the Clerk to administer the oaths or affirmations. You'll be invited to
basically make an opening statement and, included in that, you can tell us a
little more about your roles, particularly as it relates to this particular
project. Our Committee will basically follow the same format as you might see in
Estimates. We'll do 10 minutes each and then we'll probably do another round of
10 minutes each.
Now I'd
ask the Clerk if you would administer the oath or affirmation.
Swearing of Witnesses
Mr.
Cory Grandy
Mr.
John Baker
CHAIR:
So in getting started, Cory,
can we start with you or start with John, whoever you would like to begin?
C. GRANDY:
Thank you to the Committee
for the invitation to participate in this process today. Like most public
servants, answering questions at a public hearing is not an activity that I
relish. But the role of the Public Accounts Committee and the process is very
important and certainly something that demands our respect and attention. In
that regard, we're happy to be here.
I've
never met a senior public servant that didn't want to make a positive impact
with the work that they lead. If the things that we say here today can help
inform the Committee in its work, then I will call that a good day.
I've
been a member of the executive team in the Department of Transportation and
Infrastructure, and previous versions of it, since September of 2012. At that
time, I was appointed assistant deputy minister of the Works Branch. I was in
that role until 2017.
In
2017, we undertook a significant department reorganization, and I think other
witnesses here this week have spoken to that. I'll probably speak more to it
again as we go through your questions. Following that reorganization in 2017, I
served as assistant deputy minister responsible for Infrastructure and then as
associate deputy minister until September of 2020 when I was appointed deputy
minister. It's in that capacity that I speak to you today.
It is
only since September of 2020 in my role as deputy that I've had accountability
for Marine Services. In the eight years prior to that, my executive roles did
not include Marine and I did not have any direct involvement in this particular
file. So in that regard, I think it's important to note that I won't be able to
provide any direct insight to what happened on this file during those particular
years; however, I will be able to speak to you on how we are managing other
initiatives and projects in the department.
While
this report was specific to the procurement and construction of the two ferry
vessels and the recommendations in the report were largely specific to marine
procurement and operation, I think the findings in the report can have broader
value to our department. In many respects, it validates some of the changes that
have taken place in the department over the past number of years, particularly
as it relates to project development and project execution.
Having
said that, I am joined here today by our assistant deputy minister responsible
for our Air and Marine Services Branch, John Baker. John joined our executive
team in October of 2016. In the timeline of what in is in the subject matter of
the report, John was not in the department for the procurement and construction
period of those vessels. The Veteran
had gone into operation in December of 2015 and the
Legionnaire arrived in the province
in the months following John joining the department and then it later went into
service in August of 2017. So John has a wealth of marine knowledge and
experience and, between the two of us, we should be able to address any
questions you have regarding current Marine operations.
Mr.
Chair, if I could, before I finish with my opening comments, I do want to
acknowledge, if I can, the witnesses that have already spoken yesterday and this
morning. If people are keeping track of the timelines and some of the timelines
that I just went through in my own career, you will note that I have had the
privilege of working with each of those executive team members in their various
capacities in the department. Two of them were ADM colleagues and three of them
were my deputy, to whom I reported. I have a deep respect for all of them.
The
department has been in what seems like a near constant state of evolution during
the past 10 years. All three former deputies you have heard from, Mr. Meade, Ms.
Companion and Ms. King, have all made a significant and positive contribution to
that evolution and I am proud to have been part of that with them. I am also
very proud and honoured to be in the deputy role and to be able to move that
forward and continue to make improvement. As the current deputy, I would like to
thank them for their impact over those years and for their support for me.
CHAIR:
John.
J. BAKER:
Thank you, Mr. Chair.
I have
been involved with the marine industry for approximately 29 or 30 years. I got
started out with Marine Atlantic and then when the North Coast and the South
Coast was passed over to the province, I came with the transfer. I was with the
province at that time and then I ended up with a break in between. In 2016, I
came back again, so I have been here since that.
Yes, I
have been involved with the vessels on the different services. I'm quite
familiar with the services. The Veteran
was already in service and I guess hearing and later reading some of the issues
that she had coming into service. Then shortly after I got here, the
Legionnaire came into service.
Fortunately enough, when the Veteran
had some of the issues that they found, they were corrected on the
Legionnaire prior to coming across
the water. That was much of a plus for the
Legionnaire and the department, of
course.
The
Legionnaire went on the Bell Island
service on August 1 and the Veteran,
of course, went on the Fogo service on her arrival. We found that since that
time, they've been working very well with regard to manufacturing defects on the
two vessels. We did have some issues and I'm sure that they will want to be
addressed here today. We'll be here to answer your questions to the best of our
knowledge.
CHAIR:
Thank you so much.
We'll
start a round of questions starting off with MHA Scott Reid down at the end.
S. REID:
Thank you very much for your
co-operation and attendance today. We certainly appreciate your insights and
knowledge, as people who have been involved with this for a long while. We
appreciate your service to the public over the years.
This
report has outlined some problems that have arisen; it's given us some insights
as to how they've come about. We've interviewed some of the people who have been
in the department in the past. Now we're up to talking to the people who are in
the department there and can give us insight into how things have changed, and
what is currently happening in the department.
There
are two things I've been concentrating on. As I've listened to the questions
from the other people, there's another one that I've sort of added and I usually
ask in a broad way. In terms of your answer, I'd like your insights into –
because part of the exercise here in what we're doing is looking at how things
have changed and how the information here leads to a further evolution on what
the department is doing.
So I
want to get some insight into what's happening now, in terms of two or three of
the issues that have been sort of identified; one is the duty to document. Some
of the other people have said it's not something that's top of mind; it wasn't
as prominent in this department as other departments they've been in. So I'd
like to know what is done to change the problems that have been identified here
in terms of duty to document.
Another
issue is – and there seems to be some explanation for the training and the
amount of training, but I think there's evidence in this report that there
wasn't really a culture of innovation and change management. The federal
government has gone through a process of public service renewal and service
excellence and things like that. When I hear some of the issues that were here,
I wonder if they're related to – and wondering do you see that as a problem or
is that something that needs to be addressed.
The
other issue that's come up is in terms of the industrial benefits and how, in
this case, it seems to have fallen off the table. I'm concerned about that
particular issue, but I'm also concerned about the broader issues of how does
the department look at industrial benefits from procurements that they do and
services that they provide. How do they interact with the economic development
department in government and how do they help identify opportunities where it
would be beneficial to have a service provider here in the province or things
like that. I'm just looking at how top of mind that is and how that's
operationalized now.
So
those three things, I'll give you time to respond there.
C. GRANDY:
I'll start, Mr. Reid.
Thank
you for the question. Certainly lots of great topics in that.
I'll
start with your first one: duty to document. I think across government it's
becoming – to use your words – more top of mind all the time. It is a state of
continuous improvement. I think the department is better at it today than it
would have been seven years ago, 10 years ago. I would like to think that
whoever occupies these positions in another seven years would say that they've
improved it even still; it's a state of continuous improvement.
Going
back to 2015, the Office of the Chief Information Officer embarked on a process
to help departments strengthen its information management protocols and
processes. So our department participated in that process, starting back in
2015, identifying what our weaknesses were, gaps and ways to improve. That has
been an ongoing effort since that time.
I would
think that in 2017 – and, again, I made reference earlier to the reorganization
that happened in the department in 2017. That included some strengthening of the
team responsible for information management. We've been working with the chief
information officer to continue to build our records management system to make
it work better for the department and to provide training to staff who use the
records management system, so that we don't have situations – or I should say
fewer situations – where we have the information and now we can't put our hands
on it. I think there's been a great improvement on those systems and the
development of those systems.
It has
also become a priority of the division within the Infrastructure Branch that is
leading on what are these major initiatives. I make reference to some of the
health care projects that we're doing through public-private partnerships, as
well as other complex procurements around the public radio system procurement
that we've recently led, ICT services procurement that we're leading.
The ADM
responsible for Infrastructure and the director under that position makes
document retention very important. I think we've come a long way since 2015 when
we started embarking on these exercises with the Office of the Chief Information
Officer. There's always room for improvement, of course. I'll use the phrasing
it's continuous improvement; it's something that we'll always strive to be
better at.
You
mentioned training. I'll very quickly – and John may want to follow up on this
later. I think it's important to note that in Marine Services, we operate under
a federally regulated umbrella. We are very careful to ensure that we follow the
training requirements as established by Transport Canada as the regulator.
I think
what we've heard in the report, and what you've heard from other witnesses, is
that it was a challenge to train a new crew while they were still responsible
for operating a vessel on the existing vessels. So in the case of Fogo Island,
for example, the Veteran came in. It
was replacing the Winsor on that run.
The Winsor still had to operate. The
Winsor crew was going to take over
operation from the Veteran crew.
Trying to keep that going while training – so if we were to do this again today
that would obviously have to be something that would be a topic of conversation,
how do we do that?
There's
no simple answer to it because in a perfect world you say, okay, well, let's put
a temporary crew on the existing vessel while your permanent crew are learning
to operate the new vessel. That assumes that you can get them. That industry at
that time is not too different from what the industry is like today. It's hard
to find those individuals. That's not unique to our operation, that's an
industry problem. We're tuned into that industry, particularly on the Canadian
front. There are other entities that are struggling as we struggle to attract
and retain. It would be simple for me to sit here today and say that if we had
to do it all over again, we would do it a lot better. That's what we would
strive to, but I wouldn't want to oversimplify how we would do that because it
would certainly be a challenge.
You
mentioned change management. Again, making reference to our organizational
change in 2017, if we were procuring new vessels today, I think it's fair to say
that we wouldn't be tasking the operating branch that John is responsible for to
lead on that procurement. I think it's fair to say that if we were doing this
today under our current structure, we would have a team under what is our
Infrastructure Branch and, in particular, in the division of Infrastructure
Planning and Procurement. We would have a team appropriately resourced to
lead on that. The Marine operations branch would be a client to us the same way
that a health authority is a client to us if we're building a new long-term care
facility.
Under
that structure, I think it's important to note that we have a very robust
governance structure that we use for project development; we refer to a project
steering committee. If I can use the example of a health care facility. The
steering committee would be composed of the deputy of Transportation and
Infrastructure, the deputy of the Department of Health and Community Services
and the CEO of the applicable health authority. That steering committee forms
the governance for project execution.
So if
we were to do a ferry, you know, I think we'd have to think about who would form
that steering committee, because, in that sense, the department becomes its own
client. I think there's a joke about lawyers in there somewhere about people who
have a client for themselves. Anyway, so we had to be careful of those pitfalls.
But you
made reference to industrial benefits and, again, it's tricky I guess to
theorize what would have happened in this situation in terms of our current
structure but I think it's fair to say that for that aspect of industrial
benefits, the deputy minister of the business department, or whatever name at
that time, would sit on that steering committee. I think that type of governance
structure would have helped to ensure that something wouldn't fall through.
As
you've heard from witnesses in trying to trace what happened from one deputy to
another deputy inside of the government, and I think the steering committee
structure that we use in project governance today would help with that and help
ensure that there's clear priorities and who's responsible for those priorities
in that governance.
I
think, Mr. Reid, that addressed the topics that you've raised but if there's any
follow-up, certainly.
MR. REID:
Yeah. Okay.
MR. BROWN:
Thank you both for
being here. I'm glad that you accepted our invitation to come and speak to this.
The
questions I do have are – the first one is with the recommendations made in this
report to your department, I know two of the three are applicable to your
department. My first question to ask is: Are you in the current process of
implementing those recommendations or some form of implementation of those
recommendations at this time?
C. GRANDY:
So I think in the first
answer to that question, I think it's important to note that we're not – there's
currently no project that would involve the construction or the acquisition of
new vessels. So, you know, in that regard, there's no direct applicability to
ferry vessel acquisition, but I think in how we've changed – and again I'll make
reference again at the risk of sounding like a broken record – our
reorganization in 2017, we are already well on a path to deliver on projects
that hits to some of the recommendations in the report.
I made
reference earlier to some major projects that we're using: public-private
partnerships, P3s. That is something that we have been learning about for the
past eight years, I think, that process for us, that learning curve, started
back in 2014 or even a little bit earlier.
That
method of procurement, I know P3s can be a very polarizing topic for a variety
of reasons, but to strip away some of that ideological polarizing that goes on
opinion, to strip that away for a moment, what we have learned is how to
appropriately address risk in major project development and to ensure that risk
is retained or inherited by the entity that is best able to address that risk
and manage that risk.
So in
that type of structure – if I can, I'll just use a building as an example –
through a public and competitive open process, we retain one entity to design a
facility, build a facility and then maintain that facility for an extended
period of time. By tying those three activities together you have less
interfaces and less opportunity for risk as you move from one stage of
development to the next stage of development. We're seeing the benefits of that
on our major project development. It is something that we're very proud of and
feel that we're having quite a bit of success.
If we
were to procure these vessels and we could turn back the clock or we were to
start this process again for a ferry vessel or multiple ferry vessels, I think
we'd have to be taking a close look at what method of procurement do we want to
use and what model of project delivery do we want to use. There are all sorts of
options available to us in the industry and we would closely examine those,
which is what we do for new facility development. We would closely examine those
options and provide recommendations from there.
J. BROWN:
Thank you, Deputy Minister.
Every
single individual that did appear for us so far used the analogy that they were
like running on a treadmill when it comes to what was on the go in the
department, especially at that time. They talked about lack of resources, lack
of human resources and that for some of these, between operating the vessels,
but also at the time of project management and they had so much on their plate,
they didn't have enough people to delegate tasks to.
I just
want to ask: Is your department currently addressing these issues, internally,
because it seemed like these individuals – prior to your work – they seemed that
they were overworked.
C. GRANDY:
Great question. I smiled as I listened to some of the previous witnesses use the
analogy of the treadmill. I can't promise I'm not going to get a little
emotional as I talk about it because it is – that's exactly what it's like.
You
come to work in the morning in this department – because it's so broad and it's
so many lines of business and it's so operational – and you think you know what
you're going to encounter. You're not in your office, you're not in your chair,
you haven't taken your coat off and something else has happened that takes you
in multiple different directions. So I really appreciated Mr. Meade's analogy
when he referenced it yesterday morning. I suspect that's an analogy I'm going
to be using for a while.
I think
one of the biggest things that we've done on major project development is that
we make no apologies for the resources that we do retain. It's interesting that
we are sometimes criticized for contracts that we have with external
consultants. But I think that is one of the major keys to our success: we have
gone out and we have retained the expertise that we need in order to lead on
these major procurements.
We've
done that through open procurement processes. Again, I'll make reference to the
P3 projects. We have retained procurement and financial advisory services. We've
retained external legal advisory services to augment those services that are
provided by the Department of Justice and Public Safety, specialists in these
fields so that when we are developing the contracts – we refer to it as project
agreements – that we have a very strong foundation to draw upon the expertise
that exists outside of government to ensure that we are protected. I think that
is certainly key to our success on these major projects, when we go out and get
those external consultancy services.
I think
what we've heard in the report – and a former executive has spoken to it – is
there have been times when we've been operating files off the corner of our
desk, that you are the operator of something and now you're also going to be the
procurer of something that is going to augment your operation. By having
dedicated staff that are to lead these major initiatives, and going out and
retaining external expertise to augment what we have internally and not just
throwing it on the branch that is operating or the client that is operating
whatever it is, in this case, Marine.
J. BROWN:
Going forward now, after
hearing some of your former colleagues, is there any thought from your expertise
that maybe there should be some stops put in place to prevent piling and piling
upon current employees and individuals within the department? Because it seems
that a lot of things get pushed to the side, or things do not get followed upon
or, obviously, the worst of all, burnout of employees. Are there any thoughts
that maybe this could be changing going forward, that we don't pile on to
employees and cause things that obviously we saw in this report?
C. GRANDY:
I think that issue is
something that haunts every senior leader, every deputy, every ADM in the
system. It's the risk of – and I'll use your word – burning out or exhausting
the people that you count on every day. I don't think I've met a deputy or
chatted with a deputy that doesn't struggle with that. It's a great question. I
don't know that I have a magic bullet solution to your question because you're
always trying to find that balance.
Again,
though, I'll go back to what I said in your last question, that we can't be shy
as leaders to put forward the backstop. If you're developing something, it has
to be a full team. Now, what is a full team? I think as leaders in our current
fiscal environment – and I just don't mean in the past couple of years. Again,
I've been in the department since 2012 and that first budget I was part of in
2013 was a rough budget. Folks in the system would know what I'm referring to in
terms of the decisions that we had to make.
So
you're always, as a leader, trying to make that judgment call between how do I
keep my expenditure in running the department as low as possible without
jeopardizing success on the service delivery? It is a constant balancing act.
Whenever we look in the rear-view mirror you can say that maybe I could have
done that one a little better. But I think now, when we are putting together –
again, I'll make reference to the major projects. The full project budget
includes the team that you think is necessary. We're doing our best at ensuring
that our total project budgets have enough resource that we can get that,
whether that is an internal body or whether that is an external body.
J. BROWN:
Thank you, Deputy Minister.
C. GRANDY:
I hope, Mr. Brown, that addresses your question.
J. BROWN:
Perfect. Thank you, Deputy
Minister.
L. STOYLES:
Thank you both for coming
and thank you for your service to our province.
I
certainly want to talk about moving forward and the action plan, but before I do
that, I want to talk about the briefings you would have had when you came into
the department. This was one of the biggest projects, I guess, that the
department had taken on, especially when you look at the cost of not building
just one vessel but building two vessels.
I want
to go back to when you came into the department and the problems that happened.
You have the report and I'm sure you have read the report. You looked at what
happened in Romania and how we didn't send enough staff. Maybe it was a money
issue that we didn't send. But we heard this morning that deputy ministers and
assistant deputy ministers went to Romania.
Red
flags came up in my mind when you think that it would be more important instead
of sending the staff, the ministers and the deputy ministers and the people.
When I hear that they didn't have enough staff to send and they sent staff over,
I just want to hear what your views are on that, to hear how the briefing went
when you came into the department and the concerns. Because now you have the
problems to deal with, you have all the breakdowns and you're dealing with all
of that. I am just wondering about what happened when you came?
C. GRANDY:
So I'll speak for myself and John might want to add some comments on when he
joined the department in 2016. In my case, when I became deputy in September of
2020, these issues were long behind us in the department. The
Veteran went into operation on the
Fogo run in late 2015 and the Legionnaire
later on the Bell Island run in 2017. Most of those – I won't say most, I think
all of those bugs, in terms of the initial operationalizing of the ferries, were
behind us. So there were no particular briefings that I would have received in
September 2020 related to the Legionnaire
and the Veteran because it was behind
us.
L. STOYLES:
So there was never any talk
– moving forward, in my mind, I assumed you would have been briefed on what had
happened. Eventually, we're going to have to do this again to move forward. So
there was not a report there saying the dos, don'ts, maybes, what not to do
here?
C. GRANDY:
Not specific to this issue. I think any transition between deputies, as deputies
move, particularly in a department as wide and as broad as Transportation and
Infrastructure, that there is no succinct briefing that would ever bring you up
to speed on every issue. I know that on the face, that might sound alarming or
incredulous, but I think we can't lose sight of the fact that we are well
supported from a management structure, underneath the deputy and underneath an
ADM in that organizational chart. We rely every day on the professional
expertise of the directors, the managers and the employees that make up the
various divisions of our department.
I say
on a regular basis. I wouldn't sleep at night if I didn't trust the team that
was underneath us to deliver the very important services in the department.
That's where the strength in any department is. You can have strong executive
leaderships, and that's obviously very important, but on a day-to-day basis,
when it comes to the provision of services, it's the employees and the
management staff that those employees report to. That's where the strength of
the department is.
I'll
take this opportunity to say that, as deputy, I have incredible reliance and
faith in that team to be able to execute on the services, whether that's
delivering on a project, whether that's flying the air ambulance or whether
that's delivering the mail in our department. It's the strength of team.
I
wouldn't want it to be alarming to the Committee that there is no succinct
briefing that would happen from an outgoing deputy to an incoming deputy.
There's some of that, certainly, and I think an outgoing deputy will make known
to an incoming deputy what the hot issues are of the day; but again, to go back
to your question, there was nothing specific to this file that I would have been
briefed on. Now, John's situation was a little different.
J. BAKER:
I think you're referring
probably to some of the incidents that were witnessed on the
Veteran, some of the mechanical
issues. While I can't speak too much to the first two issues on the thrusters
because that happened prior to me coming on board, but I can speak to the third
thruster and the engine, which reported as human error.
Yes, we
were given full explanation as to what happened there. It was unfortunate
because the captain on the first incident with the third thruster and the chief
engineer on the engine, we did the investigation and once our findings were
found, it was passed over to human resources.
L. STOYLES:
Okay.
I guess
the other part of the thing was there were concerns on the training, because a
lot of the staff were working and couldn't get the time and that. I understand
labour issues and things like that. I'm just wondering, coming into the
department and having to deal with all that, I guess, lessons learned – I'm just
wondering, moving forward, what the plan would be?
J. BAKER:
If I might add to what I was
saying earlier is that both the chief engineer and the captain at that time had
gone through full training of the vessel when she arrived over here, and it was
just very unfortunate that it happened but they had gone through the full
training program.
L. STOYLES:
So the other concern then
was safety issues on the vessels and that once they arrived and that – did you
want to speak to that: safety issues on the vessels? I understand, in the
report, there were some concerns about safety issues with the staff.
J. BAKER:
Safety issues?
L. STOYLES:
Yeah, in the report it
talked about safety issues.
S. REID:
Particularly related to the
(inaudible). I am not sure if that's –
L. STOYLES:
Yeah, the ramps and the
things like that wasn't –
J. BAKER:
All right, the safety issues. I misunderstood what you were saying there.
L. STOYLES:
Sorry.
J. BAKER:
On the ramps, there is an
issue which we are trying to mitigate now and for a while. In order to get the
preferred angle on the ramps during a maximum high tide, the vessels are not
able to ballast themselves enough to be able to achieve that preferred angle.
And we've been working with the manufacturer of the ramps and the only
recommendation that they're coming back with is that we install, what we call,
linkspan docks or mechanical jogs, whereby they're adjustable. They go up and
down.
As a
matter of fact, we're obtaining some drawings on those now because we would have
five docks to deal with – three in the Fogo service and two on the Bell Island
service. Those would be similar to what the
Flanders is using right now on the
Bell Island service.
L. STOYLES:
Okay.
Thank
you.
S. GAMBIN-WALSH:
Thank you, Cory and John,
for your time here today.
As a
Committee we've been reading about and hearing about operational delays, service
disruptions, substantial unplanned costs during the construction and the
operating and the initial operating of the vessels. So that's what we've been
hearing about the last day or so.
Cory,
you've been there for 18 months now. So since you've been there as the deputy
minister, how many days have these vessels been out of service?
C. GRANDY:
So I don't have those facts right in front of me. John, I don't know if you have
any of those stats immediately available to you to be able to answer that, Ms.
Gambin-Walsh.
S. GAMBIN-WALSH:
Okay.
C. GRANDY:
I'll start by saying this: In the current year, in '21-'22, both vessels, the
Legionnaire and the
Veteran, came out for their five-year
refit. So that is not a result of anything in particular in terms of the
failing; it's just part of that regular refit schedule that's in that regulated
industry. So I think to answer that question in the current year might be a
little bit skewed because they were out of service for that extended refit
period.
I'm
going by memory here now, which is always dangerous with me. I think in the
previous fiscal year it was a relatively low number of out-of-service days, and
two days and 40 days come to my mind. John, I don't know if you have any
recollection of that.
J. BAKER:
I can add to that. In the past fiscal, due to the pandemic, we were faced with
taking four of our major vessels out for their five-year refit, which a
five-year refit is an extensive refit. So they all had to come out the same
time.
We look
at the machinery on the Veteran and
the Legionnaire, the machinery is you
go by your five-year cycles or your 10-year cycles and you do certain things.
When Class had a look at our two vessels and did their survey on them, we're
exempt from a doing a teardown on our engines. As a matter of fact, they even
took away using the date on them and gave us by hour, the number of hours on our
equipment.
So I
can speak for the last few years, that we've had a very good relationship with
Class and with Transport Canada on those two vessels. And yes, we have some
issues there because they're so sophisticated with what we call the board
systems and some of the boards give out and we have to replace some of the dials
on them that gave out. Those boards are not always on the shelf; therefore, you
might consider it not a major issue, but it is an issue that could prevent us
from carrying on with the service. This is some of the things that we deal with,
but nothing to the extreme.
S. GAMBIN-WALSH:
Okay, thank you.
What is
the actual plan, like in the department, for unexpected down days?
C. GRANDY:
Right now, we have two swing
vessels that are available for when we have a boat out of service. It's a
constant movement when vessels are coming out, particularly when they're coming
for an extended period due to their refit schedule, but, of course, we all know
that emergencies, unexpected failures happen as well. So I think the broad
answer to your question is there are two swing vessels that are in our inventory
to be able to supplement when we have a boat out of service.
S. GAMBIN-WALSH:
Okay, thank you.
In an
ideal world, we aim to mitigate risk by ensuring the crew that are hired to work
on these vessels have the training equitable to the technological advancements
or are trained and tested before employed on these vessels. Job qualifications
for these advanced vessels; we need these crew that are trained. How did the
department address this? How are you addressing it today?
John
just alluded to the technology on these vessels. So they're advanced vessels and
we have heard from previous deputy ministers, because we've asked the question,
were they too advanced for the time? The answer we've received is no. This is
2022, it's a go forward. They're the proper vessels for what we need on a go
forward, but we didn't have the staff who had the training because this was new
technology. How can we address that on a go forward when we're trying to fill in
these positions or rehire new crew?
C. GRANDY:
I'll turn it over to John in
a second just to speak to some of the more technical matters of qualifications.
I'll
say, again, there's no real magic bullet; we're in a competitive industry for
staff. When I say competitive industry, we're competing with other entities;
we're competing with private. We're in a constant state of recruitment. We use
eligibility lists to help supplement full-time positions when we have a need in
the system. It is a near constant exercise to keep that eligibility list of
employees available so that we have someone to call when we have a vacancy.
I
should probably turn it over to John now and let him speak to some of the more
technical matters in terms of the qualifications in the various roles that we
have on various vessels.
J. BAKER:
Of course, first, when a vessel first came into service, they were trained by
the shipbuilder's crew that they had on board. What normally happens is that
crew that they had there was supplied by the shipbuilder and no doubt part of
the contract, they would be relied upon to train that crew and they would not be
satisfied – because at the end, they would have to sign off on each of those
crew members, whether they felt they were qualified or not.
So once
the crew members were felt to be qualified and the shipbuilder's crew signed off
on them, then on a go-forward basis you hire a crew member by their tickets, by
their certificates. You hire a captain by his ticket. You hire a mate and you go
by their classification and their tickets. Same thing with a chief engineer. So
that person or persons would come on board and they would spend some time on,
what we call, familiarization and then the current captain on board or the chief
engineer on board would have to sign off on them when they felt they were
capable of picking up their duties.
S. GAMBIN-WALSH:
Okay, thank you.
So what
about the companies today that we procure to repair these vessels, how is
knowledge transferred to these companies?
C. GRANDY:
I'm going to turn it over to John to speak to the issue of original equipment
manufacturers, but that is a key piece to maintaining our vessels. In the world
of open procurement for repairs and refits to our vessels that is something of
keen interest to me, but I will let John speak to how we manage that from an OEM
perspective.
J. BAKER:
Well, first of all, I guess
– and Class has picked up on it very deeply, as well, as of late that we try to
deal with the OEM – the original equipment manufacturer – most of the time
because they're familiar, they have the OEM parts and they are relied upon. Now,
I mean, if we have a certain engine – and I'll just give you one name – if we
have a Cat engine, I mean, if we go out and put it out to tender for some parts
for that engine, I mean, they would normally have to go back to Cat to get it
because you're not going to buy it off the shelf of one of the other local
distributors.
So what
we'd find is that they would buy it from Cat and bring it in and have to put
their markup on it before they sold it to us, to the department. Yeah, we try to
work with the OEM as much as possible for that.
As I
said, you're looking at you don't want your vessel cutting down in the middle of
stream because of a cheap part that you put on board.
S. GAMBIN-WALSH:
Okay, thank you.
Thank
you very much.
CHAIR:
Thank you.
I
think, John, I might start with you on a couple of quickies. Just to follow up
on that particular point from my colleague.
When a
vessel incurs a problem, for example, how does the problem get identified,
normally? It is something that comes up on the screen and it tells you you have
a problem with this particular part, or this particular engine, or is it sent
locally to be serviced? In order to determine what you actually need to order,
who makes that determination?
J. BAKER:
That would be identified
first with the chief engineer on board.
CHAIR:
Chief engineer on board.
Okay, so then they would source out the particular component?
J. BAKER:
Then they would relay to our
superintendent of marine engineering and then he would – if the issue can't be
resolved on board, then the superintendent will go to his contacts to rectify
it.
CHAIR:
You made reference to
familiarity with the vessel. The process that you have in place now is if any
new crew member is hired – the captain, mates, engineers – the first part is the
orientation. They're hired based on their tickets and then the second part of
that is an orientation to the vessel. So before they actually take control or
start work on the vessel, they are given the full orientation that they require
and then it has to be signed off by the appropriate person on that vessel.
J. BAKER:
That's correct.
CHAIR:
So that reassures us that
the actual training now to basically keep that vessel running, those people are
being fully trained before they actually take operations of the vessel?
J. BAKER:
Yes, the current captain on board or the current chief will have to sign off on
that, put his signature to it, and we would have a document that tells us that
that chief or that captain feels very confident that this person is qualified to
take it on.
CHAIR:
Some of your predecessors
that have come before the Committee, Mr. Meade talked about having full
confidence in the contract, in it being a good contract; Ms. King talked about
it being on time and on budget; Mr. Harvey talked about the fact that they were
built by a world-class shipbuilder and made a comment that they would last the
province for a long time. I wonder, do you agree with those type of comments?
J. BAKER:
Well, I guess I can't speak very well about it because I have no dealings with
the shipyard and with regard to the vessels themselves, it will certainly depend
on their maintenance periods and how well they're cared for. Even if you have a
maintenance problem that doesn't fall under Class, that's either now fix it now
or pay me more later. So yes, vessels will do you a long time. I mean, we have
one vessel in service now that's over 50 years old and running well. So they can
last you a long time as long as they're well maintained.
CHAIR:
And one other comment you
made, and my colleague here was talking about the number of down days or
downtime right now in the last couple of years for these vessels. There appears
to be a significant reduction in the amount of time out of service compared to
when the vessels were originally purchased. Is that the trend?
J. BAKER:
Those vessels, from what I understand, from hearsay and from some of the notes
that I read and also the auditor's report, I'm sure that the shipbuilder felt
very disappointed and probably very ashamed as to the problems with the
Veteran. Because they were only five
days out when they had to go back and replace an engine.
Then,
when they tried their journey again, before they got fully across, they had to
go into a port and they lost their generator and they had to put on a mobile
generator. Then, when they got here, they had the thruster problems, which took
them a while to get to the root cause of it. So, yeah, I'm sure that the
shipbuilder – and from some of the correspondence I read – were very
disappointed and ready to go beyond which they extended further warranties
because of the issues that the department was faced with.
CHAIR:
The Auditor General's report
points to a lack of – what I would call – their training issues but human issues
when it comes to some of the reasons why the vessels were out of service for a
particular time. I think you alluded to some of that yourself. Is it fair to say
that the training or the lack of training contributed to any of those downtimes?
J. BAKER:
For the major issues that I'm fully aware of, the first two thrusters that
failed, from what I can read and understand of were manufacturers' faults.
Because, you know, if a bearing is not oiled, that bearing is not going to last
very long. So then they had to modify it and make sure that there was a new line
going through the bearings to keep it oiled.
So
that, in itself, was a supplier issue. The other two issues that we were faced
with in 2017, as I mentioned earlier, on the human error side, they were fully
trained the same as the rest of the crew when the vessels came over. I know,
specifically, the chief engineer was very quickly to own up to it and say I
messed up. I screwed up and I am willing to take whatever's thrown at me because
it shouldn't have happened.
CHAIR:
Okay. Thank you.
Cory,
maybe you can answer this one better. One of the recommendations of the Auditor
General, it says, is to “establish and follow a project management process for
the procurement of vessels which follows leading practice and gives particular
attention to risk management, onsite supervision, document management and
training.”
So if I
take out the words “of vessels” and simply follow this recommendation for the
procurement which follows leading practice and gives particular attention to
risk management, onsite supervision, document management and training, is there
a document in the department now, a manual, some kind of template, which follows
this recommendation?
C. GRANDY:
In our department and, in particular, in the Infrastructure Branch, we have
subsets of project types and methodology, so there are different answers, Mr.
Chair, to your question.
For
example, on the design and construction of new schools, for example, and smaller
projects – when I say smaller projects, I am still talking about tens of
millions of dollars, but those types of buildings – there is a document that we
refer to as the PMDA manual, Project Management & Design Administration manual.
The current version of that which we are using for those projects is a 2014
document. We are currently in the process of a review. We would expect later
this calendar year that we will be finalizing and publishing, for our internal
use, that document again as a 2022 version for those types of projects.
Those
are projects that we deliver in, what I refer to as, the more traditional
delivery methods, not P3. So that is a very active document and it is in a
constant state of revision, but we are in the middle right now of a relatively
major overhaul of that document.
In the
world of the P3 projects, again, I made reference earlier to the external
expertise of procurement advisors that we use. We utilize those external
consultants to help guide us on best practice when it comes to that type of
delivery model and feel very well supported in that.
It is
also very important – and again when I made reference earlier to the project
agreement on those types of projects, and it is the project agreement that
bundles together under one umbrella, design, construction and a long-term
operating period. That project agreement – we refer to it as the PA – is very
detailed and defines the roles of the various entities and how we interact with
those entities underneath that project co-umbrella of designers, builders and
facility maintenance operators.
That
document, that project agreement, that contract in and of itself would dictate
the roles and responsibilities and a very defined process, as we go from the
procurement period right through to year 30 of an operating period. So I think
with the external advisory services that we retain, we have those bases covered,
certainly, as it would relate to the recommendations in our report.
CHAIR:
When you mention the P3
projects one of the things that comes to light that was one of the
recommendations here is that whole part about on-site supervision. Is that part
of what you do in your P3? Is there somebody from the department who is on site
providing the supervision of these P3 projects?
C. GRANDY:
Simple answer is yes. That is done in a different way. That type of on-site
supervision is different in a P3 structure, relative to how we do it in a more
traditional structure but, yes, that resource is there. It is not the role of
the department to manage that – well, I'll say it a different way. The risk of
bad workmanship on a traditional project is higher than it is on that type of
structure where the same entity is going to maintain that building for you for a
30-year period.
I think
that is one of the elements and there are various elements that – I love talking
about this stuff – that I could speak to in those projects. But that long-term
operating period is one of the pillars that give that model strength, because
the entity that is designing it for you and building it for you is also the
entity that's going to maintain that facility and keep it in a constant state of
renewal for a 30-year period. I use 30 years as an example. That's how we're
structured, our current P3 projects.
The
other element that is within that, the industry refers to it as – as we're
paying for that over the 30 years, we refer to it as an availability payment. We
only pay if the facility is available to us. Or if elements of the facility
become unavailable to us, because of a maintenance issue, well then, there's a
deduction in the payment. So in a long-term care facility, if there's a wing of
resident rooms that becomes unavailable because of an electrical failure or a
plumbing failure, then there is a deduction in the monthly payment that is made
to that entity.
Just by
that structure of a project agreement, they're very incentivized to ensure that
the facility is built to the highest standards, because they can't afford for
the facility to become unavailable or for a room to become unavailable. There's
a lot of strength in that structure.
S. REID:
Thank you.
I'm
just going to circle back to some of the questions I had asked earlier and maybe
build on some of the comments that have been made related to questions that have
been asked here and some recurring themes that I see coming up. I'm going to put
out a number of questions again.
I just
want to get back to the issue of training. There's evidence in the report that
even when people attended the training – and I understand that the trainers had
to sign off. But there's evidence from emails that are presented in the report
that the people doing the training didn't think that the people – let's put it
this way, they weren't that engaged in the training.
I'm
wondering does that highlight a learning culture issue within the department,
possibly within government overall? I'm just looking for some comments in
relation to that. If that is an issue, how has it been addressed or how could it
be addressed?
Also,
the other issue there is in terms of the difficulty of getting staff and
experienced people and things like that. I certainly understand that when an
industry is hot, it's difficult to get some people and things like that, but I'm
hearing this issue come up in relation to even heavy equipment operators and
things like that, the difficulty in getting these people.
When I
talk to some of these people they tell me – I'm wondering why is government not
a preferred employer for some of these people? That's what I'm wondering. Again,
I'm wondering is that part of a cultural issue within government, within the
departments? That's a difficult question. I'm asking it because I think we need
to think about it, we need to face it, we need to address it and we need to have
some possible ways of dealing with it.
I
think, as well, what's our human resource plan? Do we have a succession plan?
Are a lot of our employees reaching close to retirement? Is this going to become
more of a problem for us going forward and thus require more attention? That is
something I am concerned about.
Also,
in terms of economic development and the connections with that economic
development, I'm wondering can you provide me with some concrete examples of
major projects where we have changed in such a way that we're getting more
economic benefits from the things that we're procuring. Can you provide me with
a few examples of where that is actually happening?
Also,
this issue of being on a treadmill has come up in a number of people that I have
been talking with. I've worked with the government in certain positions before;
I've sat in on executive meetings so I certainly understand that. Part of my
experience teaching at the M.B.A. program and learning about management
techniques and things like that, I also wonder what the root cause of that is.
What is being done to address the root cause of that problem where people seem
to be running on a treadmill? What is government doing – I guess, maybe a
broader question is whose responsibility is it to address that?
Also,
just to circle back to the training, there were some reports that were done from
the Human Resource Secretariat, I believe, in relation to the training that was
done and the issues resulting, maybe from a lack of training. I'm wondering what
were the recommendations in those reports and how they were acted on?
I'll
just leave these out there and you can address those.
C. GRANDY:
Absolutely.
You
asked very heavy topic questions. Great questions. We could spend a lot of time
– and we should spend a lot of time beyond the time we have here today talking
about these things. They are very heavy topics and I am trying to think where to
begin.
I don't
think I'm telling any secrets when I say that we don't have – and I think fair
to say government doesn't have – a huge succession plan that recognizes our
aging workforce. We're aware of it and there is no easy solution to it. I think
recognizing the problem is certainly the very first part of it.
Again,
in a department like ours, we're very broad and a lot of operating arms. You
made reference to heavy equipment operators and our plow drivers. Similar to
what we talked about earlier in Marine, we have near constant ads out looking to
replenish our eligibility list so that we have people to call upon when we have
a short-term need or a long-term need. And we're staying abreast of it; we
haven't had any major breaks in service delivery as a result of that, but it is
something that we're always cognizant of and we would love to have a better
solution to it.
Again,
it's not unique to our department; it's not unique to Newfoundland and Labrador.
Myself and Minister Loveless recently participated in an FPT session where this
was a topic of conversation. It was specific to truck drivers and that supply
chain problem that exists across the country. But that's the same resource that
we're drawing upon for our plow operators and heavy equipment operators. So it's
certainly a national problem or a national challenge and it's something that
we're keen to, but what the solution is, I don't think that's in front of us
today.
I'm
going to go to your last one; you talked about the root cause of that treadmill
scenario. I can only speak about life inside of Transportation and
Infrastructure. Similar challenges exist in every department, I think, as I
speak to my colleagues across the system. But it's one of the reasons why, as an
executive team, we try our best – and it is difficult to do it in our system,
but we try our best to stay out of the deep weeds so that we can try and manage
on a more strategic level, as you would expect an executive to be able to do.
And it
is a daily challenge. On my most frustrated days, I would say to my assistant
outside my door we should just change the phone number to the executive office
as 1-709-POT-HOLE, because that's what happens: People want to make their
complaints direct to the deputy, direct to the minister's office. I get it. As a
government, we have to be open, we have to be excellent at public service
delivery, but we should be managing that at the appropriate level.
One of
the initiatives that we are looking to do this year is to – we have a 24-hour
dispatch system for winter maintenance when we're in snow-clearing mode during
the winter season. We're looking at expanding that to at least an eight-hour a
day, year-round scenario so that someone has a number that is not the minister's
office to report a road condition.
I hope
that will make some difference on being able to let us rise above that
day-to-day minutia. We're never going to stop it because, again, full respect
for the fact that an elected official needs to be accessible to the public, but
we get mired down a lot in those weeds, and it's been a constant conversation of
mine since I became deputy, what types of things can we do to let us rise above
that so we can actually operate at an executive level. If other folks have ideas
and thoughts on that, I would love to hear them and I think other deputies
across the system would love to hear them.
I think
the other thing that you mentioned, Mr. Reid, is economic development, and I'll
just use this as one example. It's a strategy that we've been using on our P3
projects whereby once the successful proponent for a project has been
identified, we've had, as a requirement, that that successful proponent hold
what we refer to as business-to-business sessions with the local community. We
have seen the fruits of that. When we make that large entity open their doors –
it was difficult during COVID, but open their doors physically or virtually, to
be able to create that atmosphere where a local supplier or a local vendor can
meet that larger entity and form those business relationships.
So I
think that is certainly one thing that we've done and we've done successfully.
We've heard that we've had good feedback from the local industry on that. We
also have a very positive, close working relationship with the Newfoundland and
Labrador Construction Association and we work with them to help form those
partnerships between smaller vendors, smaller supplier and the larger
contractors.
I know
it would be great to spend a lot of time talking about some of those things.
They're very weighty subjects and very important ones.
J. BROWN:
(Inaudible) thank you,
Broadcast team.
I only
have one question to ask right now about this and I do thank you for everything
that you've guys have spoken about. I know it's some deep stuff and we're not
going to change the world tomorrow, but we're making a start here. The only
thing I ask, going back and after hearing everything that – I'm sure you've been
tuning in to your former colleagues and stuff who were speaking and everything
like that. It seems that it's not just a government industry, but it seems to be
a problem there because I've talked to some – like, it was a problem when I was
in a previous life, in the mining industry. It's a transfer of knowledge between
individuals, the outgoing and ingoing.
The
only thing I ask is to take under consideration: Will you guys take under
consideration of some sort of plan to transfer knowledge between an outgoing and
ingoing? And I know in this world of government, it's including outgoing and
ingoing governments and stuff like that and sometimes there is some shake-up
within the departments as well. But some kind of plan or some kind of knowledge
transfer that we don't find ourselves in the situation where we're dropping
projects that were actually beneficial and could be possibly completely by
accident, but take into consideration a way that things are documented and
transferred that things don't fall to the wayside. That, we hope, it would
actually have been carried out to completion.
C. GRANDY:
Yeah, I think the point you are making is very on point and I think that maybe
your suggestion is larger than us as Transportation and Infrastructure, but it's
a very valid point. I will say again, though – I made reference to it earlier –
that I think our department structures across government are designed at that.
That transfers happens because there's a much bigger team than just the deputy
and the number of ADMs that a department might have.
I'll
just say again that the strength of the team at the director level and the
manager level and at the individual employee level, that's where our strength
comes from and that's where most of the things, MHA Brown, don't get missed.
Obviously, you know, that's not a perfect system and there are times where those
types of things will happen and I think maybe that's something that we'll have
to ponder as executive and broader than TI will have to ponder in terms of how
better to improve on that.
J. BROWN:
Thank you, Deputy Minister.
I
appreciate your time.
L. STOYLES:
Thank you.
Like I
said, again, I know one of the reasons I started off asking the questions in the
beginning was about training and how much you were informed. In the report here
it says that there were supposed to be – the engineer was supposed to go for six
weeks of training and they only did three weeks of training. So, obviously, if
the boat builder felt that they needed six weeks there and they only got three,
obviously, they didn't get the full training package, so how can they come back
and direct a ship when they don't have the full training?
I just
wanted to make sure, as Jordan said, moving forward that there needs to be a
good, strong plan put in place to document the dos and don'ts. That's very
important. I just wanted to highlight that as he did. That was one of the things
I had.
The
other thing that came out, you talked about how difficult it was getting staff.
Is it that they're not available or is it a cost that we're not paying the
market value? I'm just wondering if you could talk about that for a bit.
C. GRANDY:
I think the simple answer is there's not enough in the industry, so I think a
big part of that is they're just not simply available. It's not that they don't
necessarily want to come work for us.
Now, I
have to be honest, I've never done any market analysis to compare our rate of
pay in the industry relative to private, specific to the marine sector. John may
have, may be able to speak to that in a little greater detail, but I will say
that tends to be a problem across government positions generally, that there are
other employers that can pay differently and private employers have different
ways to compensate and perhaps have more flexibility inside a large government
system and a large pay classification system. It is sometimes a challenge to
compete.
Sometimes we get very fortunate that I think one of our best marketing tools
when it comes to recruiting talent is Newfoundlanders and Labradorians want to
come back home and sometimes in positions right across our lines of business, we
will get very fortunate that when we're recruiting that you will find someone
who has very valuable experience that they've obtained outside of the province
and they just want to come back home. So I think we've seen instances of that in
the sector where people want to be closer to their hometown, and I guess that
with our marine services in rural Newfoundland, that provides that sometimes as
well.
Now,
John, I don't know if you can speak to the (inaudible)?
J. BAKER:
The short answer, I guess, is it's an industry-wide problem. We get weekly
reports from the Canadian ferry operators and there's an ad in that every week
from BC Ferries looking for crew. We're very fortunate that we're able to keep
going without missing any runs, but they have missed runs for the lack of crew.
I've had some discussions with some senior management with Transport Canada in
the marine sector and they tell me the same thing, they're having a big problem
trying to get sufficient crew to keep their vessels going. So it's an
industry-wide problem.
L. STOYLES:
So moving forward, we all
know we live on an island and we're going to be having vessels for an awful long
time. I mean, the communities are very much alive in rural Newfoundland and even
on Bell Island. Of course, we also know the weather plays, when you're on the
ocean and that, a big part in that as well. But waiting for the ferries and the
lineups and all that that all of us deal with when we travel around the province
getting off and on the Island, I know your department really doesn't deal with
the cost of getting on and off of the Island, but it's not only getting off and
on Newfoundland, it's all the little communities around and even going to
Labrador, sometimes is a challenge, especially in the wintertime.
I just
wanted to if you wanted to have some kind of comment on that before we conclude?
C. GRANDY:
So I haven't raised it yet today, but I think what speaks to some of your issue
is that the department is currently undertaking what we refer to as a market
sounding in Marine Services and we're getting nearer to the end of that process.
But that's a process where we've invited – it's basically an invitation to
stakeholders in our Marine Services to be able to come to the department with
suggestions, ideas about how we can improve Marine Services and improve the
efficiency of how we offer the service.
I think
in our boardroom that we've said to each other that we spend $80 million a year
on Marine Services in this province. There is a segment of the population that
is unhappy with the level of service that we are providing and there is a
segment of the population that is unhappy that we're spending $80 million at it
and want it to be less.
Our
current step is to be completely open and ask for input into that. Like I said,
we're nearing the process of that and we're going to here from ferry users;
we're going to hear from private industry in the sector; we're going to hear
from the unions that our employees fall under. We'll have to take that under
advisement and try and plot a path forward.
L. STOYLES:
One last question, more or
less a comment I guess: We've announced that this is Come Home Year 2022, I'm
just wondering if the department has talked about putting extra times in, extra
ferries on, not only getting off of the Island but in the communities. A lot of
people, hopefully, when people come here they're going to want to go to Fogo,
they'll want to go to Bell Island and they're going to want to Change Islands.
Hopefully, they're going to want to go to Labrador as well.
I'm
just wondering what the plan is and when we look at the impact of COVID over the
past number of years and people haven't come home and now they want to come home
and as you stated, most Newfoundlanders want to come home. This is an
opportunity in this coming year for them to come home and we know we've reduced
the cost of coming off and on the Island, but are we going to look at reducing
the cost of the other ferries and the extra transportation.
C. GRANDY:
From a capacity point of view, I think that on the vast majority of our runs we
don't have a capacity problem. I think I have a lot of confidence that we have
enough room on our current runs to be able to accommodate folks who will come
home and visit the province this year. I think that is evidenced by the fact
that – and it has been publicly reported on numerous occasions, that we have a
high rate of vessel usage where the vessel runs empty or near empty so I think
in the first instance, yeah, I have confidence that the capacity is there.
Last
year we had a scenario, because of the refit schedule of the vessels we were
unable to supplement the Fogo Island run with an additional vessel. I think that
in years past that has been a practice of the department to include a second
vessel for the busiest months of the season. Last year, we were unable to do
that because we didn't have – we had boats that were in refit.
We'll
be in a better position this year, based on where we're to on our refit schedule
for our vessels and our vessel availability. I think that is a service, in
particular, that has had capacity issues.
I think
you asked me about the cost of – there is no plan right now in our budget to
decrease the fees. I think strictly from an official's point of view, I think we
feel that the cost of the ferry service on the interprovincial ferry service,
not referring, of course, to Marine Atlantic, that's not us, that would be the
federal government, but on our own service, that the cost of service is
certainly not high, relative to what it cost us to operate. It's subsidized 90
per cent and higher by the provincial government, so I wouldn't foresee the fee
as being an inhibitor to use of the ferry system.
L. STOYLES:
Thank you.
S. GAMBIN-WALSH:
My final question is under
Recurring Vessel Ramp Issues. It is in the spirit of the fact that what the AG
and team found, using the Canadian standards in auditing, based on the documents
that they had available to them and what I have been hearing here, based on the
interviews, is a little bit different.
It's
page 36 and 37. I'm just going to read two things here. “Observations from these
reports included: Since it is annoying, the crew is eliminating the proximity
alarm by lifting the magnet arm away from the sensor.” On page 37, “… they could
not provide evidence that the issues have been addressed. We observed the alarm
sounding during a site visit of the MV
Legionnaire in both February and September 2019.”
What
are your thoughts on that? First of all, the crew eliminating the proximity
alarm and, second of all, that there were observation of the alarms going off on
two visits?
C. GRANDY:
Can I take that first, John?
J. BAKER:
Okay.
C. GRANDY:
John can speak to, I think,
some of the specifics on the technical side, but, I think, I will take this
opportunity to – Mr. Wakeham, I think I heard you say it in your opening
comments or at some point in time earlier this morning that for the most part
every employee wants to come to work and do a good day's job. That's not your
direct quote but I think that was the sentiment that you – and that is certainly
the case for the vast majority of employees.
But
there is no secret internally amongst executives that have served in the
department and people that we talk to that what is – with so many employees,
with a large number of employees, if the vast majority of them are excellent and
want to do an excellent work, there's always a percentage – it's not unique to
our department. I think any employer would say the same, there's a percentage
that is not as excellent. And human resource management, I'll be quite honest
with you, is the thing that bothers me to my core the most as deputy. We have a
recurring regular HR meeting where we discuss issues involving discipline of
employees and it's the thing I find hardest to manage, because not every
employee is excellent or want to do excellent.
The
vast majority are. I said earlier, and I'll say it again, I wouldn't sleep at
night if I didn't trust the people that are working for us to do their very
best. So it is concerning to me, as deputy, when I read that type of comment
because why would someone not want to follow the process or the operating
procedure. It is a concern.
Now,
I'll turn it over to John to talk about the specifics of that because in some
instances there are reasons why an innovative employee needs to do something
that is maybe not in strict adherence to an operating procedure. So there may be
instances where those judgment calls are what we want an excellent employee to
do.
I did
want to say, for the sake of the Committee, that human resource management is an
ongoing issue that, as executive, we have to manage.
John,
I'll turn it over to you.
S. GAMBIN-WALSH:
Thank you.
J. BAKER:
You speak of the ramps and
the alarms. That's further to what I was explaining a little earlier with regard
to the vessel not being able to ballast itself enough – able to get the
preferred angle of the ramp and with regard to this one, like I mentioned about
the – suggested that we install linkspan docks so that we could adjust them up
and down. That's where we are on that. As a matter of fact, at the present time,
we're getting some drawings done up on those now to see what we can do about
that.
On the
other one, it was observed to be repositioned with the vessel ramp down on the
concrete shore ramp. Yes, we laid a ramp down on the concrete ramp dragging
across the concrete surface, and then they said the southern shore ramp in
Change Islands. Well, Change Islands, we're not there very long. We're just
there for as long as it takes to offload and load.
But I
will elaborate a little bit on where they do leave the ramps down because it's
their way of getting on and off the vessel, the crew members, even after their
ADSS is finished. But we've suggested, now, that they, instead of leaving the
ramp down on the concrete dock, that they block it with some wood so that the
ramp is up off the concrete and not dragging, but that's where we are on the
ramps.
And,
again, like I said, it's going to be hard to eliminate, I guess, the sensor
going off until we get a position where you can do some modifications to our
docks.
S. GAMBIN-WALSH:
Thank you very much.
CHAIR:
Thank you very much.
I'm
going to finish up with just a couple of quick questions. Again, the first one
will be on the training piece. There was a reference in the AG report to cutting
the number of training topics so more people could attend. The AG report spoke
about the shipbuilder's complaints about trainees were disinterested and ill
prepared to handle these vessels. The AG report says some senior officers did
not attend training.
So my
question is: Is the department confident, now, that all employees who need to be
trained on vessels operations have now been fully trained and tested to ensure
they know their systems?
J. BAKER:
Yes, Sir.
CHAIR:
Excellent. That gives us
some confidence that those issues that were identified have been fixed. You also
alluded to a process that's already in place for any new employees that come on
now, that do that orientation and sign off.
J. BAKER:
As soon as they do their familiarization from the current captain that is on
board, yes, we believe in that captain and we put our faith into him and they
feel very strongly about their duties and their responsibilities. So once they
sign off on that new officer coming on board, yes, we do have faith in him.
CHAIR:
Thank you.
My next
one, Cory, is back again around the comments around the project management
process and the on-site supervision piece. I think that is critical in a lot of
the projects that you are responsible for, especially P3 projects, because the
idea on having on-site supervision, obviously, allows for deficiencies to be
identified much sooner than at the end of commissioning when we see delays in
things happening.
If you
just comment again on the on-site supervision part because while we're not going
out to purchase more ferries at the moment, it is just knowing what your process
will be and what you're currently using and adopting. If you could just comment
on that.
C. GRANDY:
Yeah, absolutely. I think we do have on-site supervision and I'll read between
the lines on your question. I think we have had a recent incident of a delay
relative to expected project delivery. I will say that was not the result of not
having on-site supervision in the project that I am thinking of. We have a very
competent and detail-oriented project lead that was very close to the details of
the project.
So it
certainly wasn't a lack of oversight or lack of on-site presence that would have
led to that. That particular example that I am thinking of was an extreme
disappointment, to us as well, that we were not able to deliver that project on
schedule as we had anticipated. But I will say, again, that the strength of the
project agreement and the model helps us in that regard.
CHAIR:
That is the important part,
is to ensure that, on a go-forward basis, you have those things in place. I
appreciate that.
My
final comment is again coming from the AG's report and may or may not be able to
be addressed; we have talked about it a lot with previous witnesses. One of the
things is this commitment letter that was made when the contract was
renegotiated to add the second vessel, the
MV Legionnaire, and one of those
commitments that were made was to – and I'll quote right from the AG's report:
“Enter into a partnership to open an arctic research center in the province. As
part of this commitment, the shipbuilder indicated they would invest a minimum
of $0.5 million to $1 million over three years. They also indicated that if the
commitment was successfully established, they estimated the creation of 30 to 50
person years of employment and would contribute approximately $2.4 to $4 million
to the Newfoundland and Labrador economy per year beginning in 2016 and $12 to
$20 million over the succeeding five years thereafter.”
Of
course, it never happened; that's the challenge we have. But the AG went on to
say: “As the department with the lead relationship with the shipbuilder, we
would have expected to see evidence to show that the Department of
Transportation and Infrastructure had worked with the Department of Industry,
Energy and Technology to ensure the commitments from the shipbuilder were fully
explored. We did not find this evidence.”
As a
Committee, we have struggled to get answers to that question. The first witness
we had, Mr. Meade, had said when he left, it was still a very active file. Ms.
Companion didn't recall; it was over at the ADM level. Ms. King said when she
arrived, there was no talk of it anymore. So again, it's very concerning that a
significant opportunity appears to have been missed. I don't think that we're
satisfied that we have an answer to that question. I don't know if you can add
anything to it to help us out or if we've just got, to be continued, so to
speak.
Thank
you.
C. GRANDY:
I understand your question and would understand the concern. I think from my
capacity as current deputy, my answer is very similar to Ms. King, that it
hasn't been a conversation that I've been part of as an active file with that
contract. It's not a great answer, but it's the honest answer.
So I
can't speak to what did or didn't happen during that time and during the audit
period and how that contract was executed. But I made reference to it earlier
and I'll make reference to it again – and it's theorizing, of course, but if we
were employing a project governance structure on this project similar to how
we're administering the project governance structure for our other major
initiatives, I think that that steering committee structure that would've
included the deputies and other supporting officials, on all the elements of the
project, there would be a lot less opportunity for something to go missed, if I
can call it missed.
I'm not
even sure I should be using that word, because I don't know enough about what
happened and didn't happen to know if “missed” is the appropriate verb in that
case or not; but again, I think over the years we have developed this project
governance structure, that we have a lot of faith in, to ensure that all
elements of a project – because building something is only the beginning. The
life of a facility or the life of an asset, whatever it is you're procuring,
that's where the real money is. We get caught up in what it cost to build
something, but it's the operating period is as important, or more important.
Anyway, the governance structure that we employ is meant to capture that and
capture all elements of a project.
Obviously, I think, as we've heard and we read in the report, there was a
sharing of that responsibility between two departments, and maybe a more
formalized governance structure would have helped. I think that's what I would
offer to the Committee at this point in time.
CHAIR:
Thank you for that. It is
something the Committee will take under advisement.
I want
to thank John, yourself, and Cory for coming today and providing us with some
detailed answers, things that we had not heard before, and I really appreciate
it. It certainly has helped us a lot, I suspect, and I speak on behalf of my
colleagues, but again, thank you so much for making the time and coming to have
a chat with us.
C. GRANDY:
Thank you.
J. BAKER:
Thank you.
CHAIR:
The Committee will now pause
and perhaps reconvene after as a Committee to have a chat about next steps. We
will end the public portion of the meeting right now.
Thank
you.
The
Committee adjourned.