Government Operations Committee on Oct. 24th, 2023

[Parm Bains, Liberal, Steveston—Richmond East, BC]

In leading this team, right from the outset you're not thinking that you have any recommendations on what you can do differently right now.

[Minh Doan]

Based on the allegations at this time, I do not know what changes would be required until the investigations are complete and the findings are shared.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

You didn't know who made the decision, so what trade-offs would be required to achieve the outcome.

[Minh Doan]

As Ms. O'Gorman mentioned, some of the contracting training has been done, or continues to be done for CBSA, to remind them of their duties and accountability. In terms of awareness, my managers and senior executives are subdelegated to make certain decisions, and I expect them to abide by the code of conduct and the code of values and ethics. I also expect them to raise anything that requires my attention, regardless of authorities.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you. Those are all the questions I have right now.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Bains.

Witnesses, thank you for being with us. Again, just as a reminder, on the items Mr. Johns and others asked for, it's three weeks maximum unless otherwise noted by Mr. Genuis, which is 30 days from today.

Colleagues, we're going to suspend to allow for our witnesses to leave, for new witnesses to come on and for sound checks. We are suspended.

[The Chair, Conservative, Kelly McCauley]

Colleagues, we are back in.

Welcome back, Mr. Conacher. You're a long-time friend of this committee. Will you be doing an opening statement?

[Duff Conacher, Co-founder, Democracy Watch]

Yes, I will.

[The Chair, Conservative, Kelly McCauley]

We'll start with a five-minute opening statement from you and then five minutes from Mr. Terrazzano. Please go ahead, Mr. Conacher.

[Duff Conacher]

Thank you, Chair, and thank you to members of the committee for the opportunity to talk on this important situation and the issues surrounding it today.

I will be making a written submission to the committee just to follow up on these remarks today and on your questions, which I welcome.

I actually wanted to start by referring the committee to the June 2021 report by your colleagues on the Standing Committee on Access to Information, Privacy and Ethics, entitled “Questions of conflict of interest and lobbying in relation to pandemic spending”. This report was filed with the House in June 2021, almost two and a half years ago. The recommendations in it have not been acted upon, and the government continues to delay taking these effective actions to prevent conflicts of interest and secret, unethical lobbying in spending decisions. Therefore, unethical lobbying and excessive government secrecy, as well as unethical big money influence and unethical decision-making in spending, are all legal in federal politics.

There are huge loopholes in several key laws that allow for all these things to be legal. As well, the enforcement is so weak that Canadians are more likely to get caught parking their car illegally anywhere in Canada than politicians and government employees are likely to get caught violating key ethics and spending rules.

As well, the penalties for illegal parking are higher than the penalties for serious ethics and spending violations by federal politicians and top government officials and government employees.

The system is the scandal. It's not surprising that it encourages dishonest, unethical, secretive and wasteful actions, and this dangerously undemocratic and corrupt system must finally be cleaned up by closing all the loopholes, increasing transparency and making the ethics rules and enforcement of penalties much stronger.

To specifically focus on this situation, the fact that you can actually legally lobby in secret with no record is one loophole that has to be closed, and the way to do it is to reverse the onus, so that for all government employees, officials, politicians and their staff—everyone involved in politics—if someone communicates with you with respect to your decisions, then you register it. That's the way to close all the loopholes and have all communications registered.

Those communications should be up on a registry. The Access to Information Act should require a duty to document all actions and decisions and also proactively disclose it. That will end excessive government secrecy.

Finally, as you have studied extensively, whistle-blower protection needs to be extended to everyone in Canada, not just government employees, so that suppliers can blow the whistle and be protected from retaliation by the system that the Integrity Commissioner runs. Of course, that system needs to be strengthened very much, as you have examined and reviewed, and hopefully Bill C-290 will end up making some of those key changes. If not, it's just another area that needs to be addressed.

I'll leave it at that, and I welcome your questions.

Again, I would just refer you.... In your deliberations on recommendations to prevent another ArriveCAN situation from happening, I think you should review again the June 2021 report of the Standing Committee on Access to Information, Privacy and Ethics, which was aimed at addressing questions of conflict of interest and lobbying in relation to pandemic spending.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Conacher.

Mr. Terrazzano is next, for five minutes, please.

[Franco Terrazzano, Federal Director, Canadian Taxpayers Federation]

I'm Franco Terrazzano. I'm with the Canadian Taxpayers Federation. I'm here on behalf of hundreds of thousands of Canadians who demand answers for the $54-million ArriveCAN scandal.

Why does everything always cost taxpayers more? Who is going to be held accountable, and why is everything as clear as mud?

It cost $80,000 to launch the app in 2020, and then, in July 2022, Canadians were told the cost had jumped to about $26 million. A couple of months later, Canadians were told the cost had jumped again, to $54 million, and then independent techies said the cost of building the app should be around $250,000—a quarter of a million dollars.

Can you see why taxpayers are mad?

Every time we turn around, we are told ArriveCAN costs more. Who is going to be held accountable?

If I told my boss I was going to do something for $10,000 and the actual bill was $100,000, I'd have to polish up my resume. Taxpayers are out $54 million because of the ArriveCAN app. Which bureaucrat is out of a job? Which bureaucrat is even out of a bonus?

Every year, about 90% of government executives get a bonus. What happened at the Canada Border Services Agency, the Public Health Agency and Public Services and Procurement Canada?

We're going to break some news right here at the committee, because we're going to talk about some documents we just got back from an access to information request. In these three government departments involved in ArriveCAN, the total compensation paid out to executives increased by $40 million between 2019 and 2022. That's a 31% increase. The average compensation for these government executives went from $193,000 to $204,000.

The Prime Minister himself said the procurement process for the ArriveCAN app seems highly illogical and inefficient.

Will this committee recommend taking bonuses away from executives overseeing the ArriveCAN debacle, or is the message for next time, “Don't worry. You can blow through $54 million and keep your bonus, because there is no accountability”?

The Prime Minister's 2021 mandate letter on public services and procurement said it's supposed to be “open and transparent”, but taxpayers have been left in the dark ever since the beginning, whether that's on the actual cost of ArriveCAN or the details of who was actually working on the app.

The Canadian Taxpayers Federation filed ATIP requests on all manner of ArriveCAN records more than a year ago. As of October 2023, the CBSA has blown through six deadlines with no explanation, and the records we got back are riddled with redactions. There are hundreds of pages—including redactions.

Will this committee make recommendations to improve transparency?

You don't even have to come up with recommendations yourselves. You can just copy the Information Commissioner's recommendations. Require transparency from all agencies or companies the government outsources programs to. Stop abusing exemptions to deliberately keep information from Canadians. For brownie points, implement a sunshine list, like the vast majority of provinces.

Let's put this into perspective. Imagine going to a mechanic. They tell you the bill for a simple fix is $80. They then tell you the bill is $2,600. You get the final bill back and it's $5,400, and the invoice is blacked out. You'd be outraged, but this is how taxpayers were treated with the ArriveCAN app.

We demand accountability. The question for committee members now is this: Who is going to be held accountable for the ArriveCAN scandal?

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you very much, sir.

We'll start with Mrs. Kusie for six minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much, Chair, and thank you very much to our witnesses for being here today.

Mr. Conacher, why do you think it is that the President of the Treasury Board announced last week, after the report came out of the ethics committee, that she was not prepared to make any changes to the ATIP process?

[Duff Conacher]

I don't understand it. It certainly doesn't comply with any democratic or government principles that have been established at the international level. It also breaks the Liberal government's promises in terms of open government that were made back in 2015—it continues to break them, I should say.

The government is focused on and claiming that open data—making some information more proactively available online—is the same thing as open government. Open government is the public's right to access information the government wants to hide. Open data is just making the information the government wants to disclose more available. They're not the same thing.

This government has a record of excessive secrecy, as the Information Commissioner has documented. It has broken all of its open government promises, except for a couple of them.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you for that.

I believe in her press conference, she indicated that she will not be looking at the matter until 2025. Conveniently, that is expected to be the year of the next election.

Next, Mr. Conacher, do you consider GC Strategies to be lobbyists? They've been presented in this scenario as vendors. In your opinion, could they be perceived as lobbyists? Would you consider them lobbyists?

[Duff Conacher]

I would just say that in terms of all the changes I have recommended generally, I would hope that opposition party leaders will, as with Bill C-290, join together and introduce bills to strengthen the Access to Information Act, the Lobbying Act, the Conflict of Interest Act and other democratic government measures. As with Bill C-290, the opposition parties have a majority in the House. They should be passing these bills and daring the Liberals and the Senate to vote against them.

In terms of GC Strategies, first of all, there's not supposed to be any lobbying during procurement processes. You can ask questions of the government institution that's contracting out, and the answers will then go to all the bidders. That is a registry of who asked the question and what the answer was. That's all that's allowed. Otherwise, you're lobbying. You are communicating in respect of decisions.

The big, huge loophole in the Lobbying Act, unfortunately, is that if you're not paid for the lobbying, you do not have to register. If you have a contract that says you're just providing strategic advice and that you're being paid for the advice, but that any lobbying you do is free, then you cannot be prosecuted under the Lobbying Act. You have not been paid for lobbying. It's a loophole that has to be changed, along with several other loopholes, to ensure that all lobbying is disclosed and secret lobbying is illegal. One of the big problem areas in this and many other policy-making processes is that secret lobbying.

As well, if the Lobbying Act doesn't apply to you, you can unethically lobby. You can provide gifts and assistance to the people you are trying to get government decisions from. You're not covered by the Lobbying Act, and therefore not covered by the Lobbyists' Code of Conduct. Until these loopholes are closed, as I said, the system is the scandal. Expect more scandals, because the system encourages them.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you.

Mr. Terrazzano, in a Globe and Mail article published on August 2 of this year, you stated the following:

We want the government to really go a step further and ensure that maximum transparency is built into the contracts and negotiating process. So businesses know, upfront, that if they are going to take taxpayers’ money, then they’re going to be required to be transparent with the public.

Do you agree that subcontractors should be included in ATIP requests?

[Franco Terrazzano]

Yes, absolutely, especially with this, when we're now talking about a total bill of $54 million for a simple app. How do we know it's a simple app? It's because two independent techies were able to build it or recreate it over two days.

I think we taxpayers have every reason to be scratching our heads right now, wondering who's going to be held accountable for this $54-million scandal. I think one of the reasons all of this happened is a lack of transparency.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Do you think government departments should be aware of any subcontracting relationships that stem from the federal funding of private suppliers?

[Franco Terrazzano]

Yes. Sure. I absolutely think there needs to be more information.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

How would you recommend that the federal government increase its oversight into subcontractors without undue administrative burden and to ensure that the federal government is not overpaying for its services?

[Franco Terrazzano]

I have a couple of suggestions.

First, the Information Commissioner, on the Government of Canada's review published in January of 2021, makes a great recommendation for this. Recommendation two is essentially that agencies that are getting these outsourced contracts be subject to access to information. Right now, one of the access to information requests we got back had tons of redactions. The government is essentially using section 16 and section 19 to withhold information that the public deserves.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

In your opinion, what is the impact on Canada's economy when contracts are being given to private suppliers who then subcontract this work, rather than focusing on in-house solutions?

[The Chair, Conservative, Kelly McCauley]

I am afraid that is our time.

Maybe you can answer that in writing to the committee.