Government Operations Committee on Feb. 14th, 2024

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you, Mr. Chair.

Ms. Hogan, you talk about the 177 versions of the ArriveCan application in your report. You say that 25 of the 177 versions were major, and that there was no documentation of the results or processes.

What about the other 152 versions? Do you have any data on those versions? How significant were they? What were they for? Who made the changes and who asked for them?

[Karen Hogan]

Of the 177 versions of the ArriveCAN application that were released, we examined the ones that were considered major, so those that included substantial changes. We would expect the 25 versions to be well-documented, but for half of them, so 12, there was no documentation of user testing. Of the remaining 13 releases, only three were well documented, and the documentation was incomplete for the other 10.

We did not examine more releases, because we found that the best practices we expected would be followed when changes are made to an application's software and a new version is released weren't.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you.

I want to make an analogy.

For the past two days, people have been asking whether the application was useful. We've been given data on the economic situation, the sharing of information and medical equipment that was received. You even said that it worked, that the application was useful.

Say I buy a Lada for $59 million. Yes, it gets me from point A to point B. It serves the intended purpose. Did I get my money's worth, though, considering that I could've bought one for $12,000?

Is that the rationale we are being given, here? We bought something that works and that does what it's supposed to, but we paid $59 million for it. It does the job, but the price tag is hefty.

[The Chair, Conservative, Kelly McCauley]

I am afraid we don't have time for a response, apart from a yes or no, so perhaps in Mrs. Vignola's next round....

Mr. Bachrach, please go ahead.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

To go to my previous question from the last round, I wonder, Ms. Hogan, if you could provide the committee with an update in response to the letter the committee sent. This was stemming from my colleague Mr. Johns' motion concerning the department's “make-or-buy decisions” and the Treasury Board's cost guidelines in the context of OGGO's ongoing study on outsourcing. Would it be possible to receive a response from your office?

[Karen Hogan]

I'm not exactly sure what you're referring to. I haven't received a letter or a notification, but we always respond to letters we receive from the House of Commons.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Okay. Perhaps we'll follow up outside of this meeting. My understanding was that a letter was supposed to have come from the committee, requesting a particular audit.

I wanted to raise another issue. I think one of the most troubling revelations to come out of this larger inquiry into ArriveCAN has to do with something that's outside the scope of the audit that we're talking about today, and that is the charging of commissions by subcontractors.

We understand that those commissions can be between 15% and 30%. You've made comments about value for money for the Canadian public. If there are two layers of subcontractors working on these projects and each of them charges a 30% commission, then all of a sudden you're in a position where more than half the money is going to people who don't necessarily do any work on the actual project.

Now, it seems like this is something that we need to get a better sense of, and I wonder if you, as Auditor General, can point this committee in a direction in terms of how we can investigate further this issue of commission charged by subcontractors who don't do any work and the cost that is imposing on the public purse.

[Karen Hogan]

There are many hypotheticals there. I guess what I would tell you is that this is why a competitive process is really important. Having competition and many vendors bidding for the same work enhances the opportunity to reduce the price and to guarantee that the Government of Canada gets the best value for money.

Right now, contracts and subcontracts are allowed in the procurement vehicle for the Government of Canada. What I would expect to see is that the essential requirements that are in a main contract are then carried through to the subcontract, and it would be the responsibility of the public service to make sure it happens—for example, that security clearances are carried through to subcontractors and that skills are carried through, but that monitoring rests with the public service.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Go ahead, Mrs. Block, please.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Mr. Chair.

Madam Auditor General, notwithstanding the glaring mismanagement that you have pointed out and the gross waste of taxpayers' money, we continue to be deeply concerned with what we believe may be corruption within the department when it comes to the awarding of contracts. In the course of our study of ArriveCAN—and I'll perhaps follow up on what my colleague Mr. Bachrach was questioning you about—we have had extensive issues with scrutinizing subcontractors. We know that we do not have the ability to scrutinize them in the same way that we do contractors. We have also learned from departments that the scrutiny of these subcontractors is far less strenuous than that of contractors.

In paragraph 1.53 of your report, you mention, “We also found a situation where the agency reached out to a firm—one that did not have a contract with the agency—to complete work on ArriveCAN. A few days later, the firm's resources were added to a task authorization under a contract with GC Strategies.”

This is concerning. It would seem like a ploy to allow GC Strategies to get a cut for the work done by this new resource by putting them on a task authorization underneath GC Strategies and reducing oversight.

Can you tell us the name of the firm you referenced in this paragraph?

[Karen Hogan]

I'm going to have to look to someone else for that answer.

We'll have to look in our audit file, and we can get back to the committee on that.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

I would also ask you to provide us with information about whether or not we received value for money for the work of this company that became a subcontractor for GC Strategies. Again, would it have been cheaper for CBSA to contract that firm directly rather than make them a subcontractor to GC Strategies?

[Karen Hogan]

As we noted in that paragraph that you started quoting, the last few sentences state that it was unclear why there wasn't a contract entered into directly by the Canada Border Services Agency, and, as a result, it's likely that the CBSA paid more for those resources than they would have if they had contracted directly with the vendor.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

I'm going to go back to your mandate as the Auditor General. I had the privilege of working with you on public accounts in my role as chair of that committee. I understand that your role is to take a look at the processes, rules and policies that a department puts in place to conduct its work and that you audit those processes, policies and rules.

I guess what I am asking you to comment on is that I think we really do need to delineate the difference between the responsibility to know, which would be the minister's responsibility, and the responsibility to act, which would be the responsibility of the deputy head or those who fall within the organization underneath them.

Do you believe that ministers ought to have known what was happening in their departments during the pandemic? Perhaps they weren't responsible for what happened, but did they have a responsibility to know?

[Karen Hogan]

In my view, that's a matter that a minister and a deputy minister should be having a conversation about and agreeing on the matters on which briefings should occur. I think every department and every minister might have a different view or a different expectation. That should be outlined and clear between the deputy head and the minister.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

[The Chair, Conservative, Kelly McCauley]

Thank you.

Mr. Kusmierczyk, go ahead, please.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you, Chair.

In your report, Ms. Hogan, you talk about value for money. The three pillars of value for money are “the consideration of economy (minimizing cost), efficiency (maximizing output), and effectiveness (fully attaining the intended results)”. Your findings demonstrate to us that the conditions were not there for Canadians to have trust or confidence that they were receiving maximum value for money. We didn't have strong record-keeping, as you mentioned. Strong oversight was lacking. You recommended reducing dependence on outsourced IT specialists especially, over time, and more competition.

Is that, in a nutshell, what the report is saying—that the conditions were not there for Canadians to be confident that they were maximizing value for money in this instance?

[Karen Hogan]

I think in this instance, the resources weren't available at the beginning of the pandemic. That's why outsourcing was a reasonable decision. There are times when turning to a vendor makes a lot of sense, but a long-term dependency shouldn't be there.

We concluded that the app was effective, as I mentioned in 2021, but it was not efficient or done with due regard for value for money. The things that were missing were basic elements that traditionally we see in the public service. Many of my recommendations are very obvious recommendations, I would say. It's unlike us to issue such obvious recommendations. The policies exist. The rules exist. The good practices are typically followed. We would have expected to see that happen here, even though it was an emergency.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

I completely understand. I think you have full agreement with those around the table here on the major significant shortcomings that we saw when it comes, again, to record-keeping, oversight and competition. The conditions were simply not there to make sure that Canadians could get fair value for money.

I did want to talk about effectiveness for a second. I have a unique vantage point as an MP in a border community. ArriveCAN was very important in our community to guarantee the free flow of goods across our border, specifically across the Ambassador Bridge. Every single day, $400 million in goods cross the border on the Ambassador Bridge. About a third of all two-way traffic along the U.S.-Canada border goes through that crossing. We're talking about 1.4 million trucks per year, or 10,000 trucks daily. These trucks carry everything, such as car parts that allow our factories to operate and folks to go to work. They carry medicines for hospitals and health care, including vaccines. They carry food and basic vital resources for our communities.

ArriveCAN allowed the free movement of goods. You yourself mentioned that had there been a paper-based system, it probably would have ground the traffic to a halt on that border. This allowed for the free flow of goods during the pandemic.

Has that been taken into consideration in your analysis of value for money for Canadians? Again, we're talking about over a billion dollars’ worth of trade that every single year goes across that border, which the ArriveCAN app allowed to cross seamlessly during the height of the pandemic.

[Karen Hogan]

I would tell you that this was effective in that it allowed border officers to be able to physically distance. It improved the quality of information that was collected from travellers. It sped up the process at the border. I would tell you that those 10,000 individuals who were told to incorrectly quarantine probably don't agree that it was effective.

However, even though it was effective, it doesn't mean you should pay more than you should have for an app. There's a difference between being effective and getting good value for money.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

However, was it effective in terms of allowing that seamless movement of goods—140 billion dollars' worth of goods—across that border crossing every year? Was it important to maintain that free flow of car parts, vaccines, medicine and food across the border?

[Karen Hogan]

I can't really comment on that. When we were looking at the border measures, it was around the health measures that were being imposed at the border. ArriveCAN sped up the ability to verify that individuals entering the country were vaccinated and had done a COVID test. It also improved the ability of the Public Health Agency to follow up with those who should be quarantining, to confirm whether that was happening or not.

We didn't look at how the border was managed and whether it impacted the flow of goods in or out. Our audit did not go that far in 2021.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Kusmierczyk.

Mrs. Kusie.