Government Firewall Security and Free Hosting

Hello,

I am working as a temporary with the Canadian federal government on a
project that involves collaboration with other departments and
non-government entities.  Turns out the security policies are quite
tight and they do not run majodomo in the department or allow anything
like that.

I want to arrange an email discussion list that works just like this
list (I think).

Anyone have experience in similar situations?  Did it work to use an
external hosting service and are there any good free (or nearly free)
ones?