Amazon: Standing Committee on Government Operations and Estimates—June 10, 2022

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Business with Amazon

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Background

On April 1, 2020, Public Services and Procurement Canada (PSPC), on behalf of PHAC, signed a 1-year $5 million contract with Amazon to get health care professionals the PPE and supplies they need to protect themselves and continue caring for Canadians during the COVID-19 pandemic. Canada Post and Purolator were delivering the equipment to provinces and territories as subcontractors of Amazon.

At the time, PHAC needed a robust technology solution to facilitate the ordering of PPE by multiple provincial and territorial health establishments. The Amazon technology, with its easy-to-use interface, was well-suited for such work.

Following the signature of the contract, the Government of Canada significantly increased the volume of supplies purchased, both internationally and domestically. In addition, the provinces and territories requested a more centralized distribution of PPE, where PHAC distributes supplies directly to each province and territory rather than to multiple individual health establishments. This change in approach therefore negated the main benefits that Amazon and its technology were providing.

As PHAC needs had evolved, the agency required a major logistics service provider to increase its capacity and establish a longer term end-to-end logistics, storage and distribution network.

As Amazon was not able, at that time, to manage the import, receipt and handling of PPE prior to order fulfillment, the Government of Canada and Amazon agreed to suspend the contract. In June 2020, the Government of Canada and Amazon mutually agreed to keep the contract in place without activity and costs until its expiry date of March 31, 2021. Overall, approximately $200,000 was spent under this contract, with the vast majority going to Canada Post and Purolator for deliveries.

Note that PSPC has no record of any additional contracts that the department has put in place with Amazon, as a common service provider or as a department. Of note, departmental officials will place orders for lower dollar items using departmental acquisition cards, however it is not possible to aggregate data on these decentralized purchases by vendors.

Amazon web services and Canada Post

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Background

On April 1, 2022, TVA shared a news report, stating that expenditures related to Amazon web services increased, both for the Government of Canada and the Government of Québec. It states that, across the federal government, over the last year, the federal government spent $24.6 million on services provided by AWS.

At Government Operations Committee, on April 29, 2022, member of Parliament Julie Vignola (Bloc Québécois) asked Minister Tassi the following question:

“Last year alone, the federal government signed contracts totalling $24.6 million with Amazon web services, which is about $2.4 million more than the annual amount it invests in Canada Post. That's not counting other contracts from 2011 to 2020 and those with the Canada Border Services Agency.

Is it normal for the federal government and its agencies to do business with American companies instead of a Crown corporation? Doesn't this send the message that the Crown corporation is not even competitive enough to serve the government properly?”

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