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March 22, 2022

PUBLIC ACCOUNTS COMMITTEE

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.

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.

we'll start with MHA Scott Reid.

S. REID:

Okay. Thank you very much

for attending, I appreciate it.

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.

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.

training, I would say that in the department – I'm going to talk about the

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.

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.

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.

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.

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.

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.

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.

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.

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.

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. W e 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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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,