Auditor-General Karen Hogan responds to a question on her office's report on ArriveCan during a news conference on Feb. 12 in Ottawa.Adrian Wyld/The Canadian Press
The RCMP says it is assessing this week’s Auditor-General’s report into spending on the federal government’s ArriveCan app, which found a troubling disregard for basic management practices and flagged concerns about interactions between private consultants and public servants.
Auditor-General Karen Hogan also told MPs Wednesday that she met with the RCMP to discuss her report’s findings before it was released and is prepared to hand over relevant documents upon request.
The Globe and Mail first reported in October that the RCMP is investigating allegations of contracting-related misconduct at the Canada Border Services Agency.
That investigation is looking into allegations brought forward by Montreal software company Botler, which did not work on ArriveCan but worked with border agency officials and private-sector contractors who did work on the app, including GCStrategies, which was singled out multiple times in Monday’s audit report.
Conservative Leader Pierre Poilievre sent a letter to RCMP Commissioner Mike Duheme earlier this week asking the national police force to expand its existing investigation to include the Auditor-General’s findings.
The RCMP has never said it is investigating ArriveCan directly, but in a statement to The Globe Wednesday afternoon, RCMP Sergeant Kim Chamberland said this week’s ArriveCan audit report is being assessed.
“The RCMP is aware of the Auditor General’s performance audit report on the ArriveCan,” the statement said, adding that the force acknowledges receiving Mr. Poilievre’s letter.
“The RCMP is assessing the available information, including the Auditor General’s performance audit report and will take appropriate action. The RCMP takes all complaints it receives very seriously and any decisions taken are reflective of the thoroughness, diligence and independence of our actions,” she said.
During a committee appearance Wednesday afternoon, Ms. Hogan said she met with the RCMP to inform them of her audit’s findings, but did not specify when the meeting took place.
“I met with the RCMP, yes, and I talked to them in generalities about our findings because our report had not yet been made public, and said to them once it was made public, if they would like to have access to our file to see our evidence that they should send me a production order,” she said.
Ms. Hogan’s report found the federal government spent about $59.5-million on contractors to build and maintain the smartphone app for cross-border travellers.
The report sharply criticized the government’s record keeping, saying it was so poor that the total amount is only an estimate and that the CBSA disputed whether all of that was directly spent on the app.
The audit report raised several concerns about the government’s interactions with GCStrategies, which has won millions of dollars in federal contracts across several departments since 2015.
The CBSA previously said the IT staffing company received about $11-million for work on ArriveCan. The Auditor-General says the total was $19.1-million, followed by $7.9-million to Dalian Enterprises Inc. and $7.9-million to Amazon Web Services Inc.
Both GCStrategies and Dalian told MPs during parliamentary hearings that they each have just two employees. They describe themselves as IT staffing companies that win contracts and then find subcontractors to perform the work in exchange for commissions.
Kristian Firth, the managing partner of GCStrategies, told MPs he typically charges a commission of between 15 per cent and 30 per cent of the contract value.
He also said he and his business partner Darren Anthony work from home, have no standalone office and do not perform IT work themselves.
For the third day in a row, the political fallout of Monday’s audit report dominated Question Period.
Mr. Poilievre described GCStrategies as a company that is “headquartered in the basement of a tiny cottage.”
“They got IT contracts even though they admit they do no work,” he said. “WTF?”
After being admonished by the Speaker for unparliamentary language, Mr. Poilievre claimed the salty acronym stood for “Where’s The Funds?”
Prime Minister Justin Trudeau replied that the Auditor-General has highlighted some very concerning questions that need to be answered.
“That’s why we’re expecting and supporting all relevant authorities to follow up on these irregular contracting and this perhaps breaking of the rules. This is an important issue. And that’s why we’re taking it seriously,” he said.
A failure of management, 'glaring disregard' for policies, controls and transparency and dismal efforts to track spending drastically drove up the cost of the much-maligned ArriveCan app, Auditor-General Karen Hogan said on Feb. 12. The app met with frustration from travellers and the opposition Conservatives, who blamed the app for long waits at the airport and glitches that ordered fully vaccinated people to quarantine.
The Canadian Press
The Auditor-General’s report and last month’s ArriveCan report by Procurement Ombudsman Alexander Jeglic have highlighted major shortfalls in the federal government’s record keeping and the spending details that are made public.
The debate widened Wednesday over the fact that the government publishes two sets of conflicting information when it comes to spending on federal contracting.
The LaPresse newspaper published a report Wednesday stating that GCStrategies has won $258-million in federal contracts since 2015. That figure relies on entries in the federal government’s pro-active disclosure database of contracts worth more than $10,000.
However, federal departments such as the CBSA strongly caution against using those figures as spending totals, given that contracts are often “up to” amounts. The figures can also lead to double and triple counting, as the same contracts reappear in the database because of amendments and more specific task authorizations.
Border agency spokesperson Guillaume Bérubé said Wednesday that the figures published in the database, which were cited by LaPresse and used by Mr. Poilievre in Parliament, cannot be added up to determine total spending amounts.
“These procurement actions overlap, they can’t be added to determine the total value or total number of contracts allocated as doing so will result in double counting,” he said in an e-mail.
Staffing companies such as GCStrategies frequently win large, generally worded contracts to provide IT services, but then must also receive “task authorizations” that fund specific projects through the larger contract.
The Procurement Ombudsman’s report included extensive criticism about the information provided via pro-active disclosure. It found that information was missing in 41 per cent of the cases that were reviewed and found 16 cases in which the contract number was not accurate.
“Inaccuracies in proactively published information inhibits transparency and the usefulness of this information to Canadians,” the report found.
Because of the issues with the pro-active disclosure database, The Globe’s reporting has focused on figures published in the audited public accounts, which are the official, audited final numbers for what was spent in each fiscal year.
The public accounts show federal departments spent a combined total of $58.7-million with GCStrategies between the fiscal year that began April 1, 2016, and the fiscal year that ended March 31, 2023.
During that same period, $229.5-million was paid to Coradix and $95.5-million went to Dalian.
For illustrative purposes, a Globe review of the pro-active disclosure database found 182 contract-related entries for GCStrategies, totalling $238-million; 542 contract entries for Coradix worth a total of $527-million and 272 entries for Dalian worth $282-million. There were 83 joint entries for Coradix/Dalian worth $58-million.
These entries include contract values and amendments. This can lead to inflated total contract values.
Late Wednesday, members of the government operations committee approved a motion calling on the Auditor-General to audit all spending related to GCStrategies.
Procurement Minister Jean-Yves Duclos told reporters in French Wednesday that “all contracts with GCStrategies have been suspended,” but he appeared to be referring to the November decision that only applied to the border agency.
“The good news is that many things that the Auditor-General has asked us to do have already started to be put in place since November, when the Canadian government understood that the there was a flagrant lack of good accounting, good management and sharing of information with respect to ArriveCan,” he said.