Bill C-65 (Historical)

An Act to amend the Canada Labour Code (harassment and violence), the Parliamentary Employment and Staff Relations Act and the Budget Implementation Act, 2017, No. 1

Part 1 of this enactment amends the Canada Labour Code to strengthen the existing framework for the prevention of harassment and violence, including sexual harassment and sexual violence, in the work place.
Part 2 amends Part III of the Parliamentary Employment and Staff Relations Act with respect to the application of Part II of the Canada Labour Code to parliamentary employers and employees, without limiting in any way the powers, privileges and immunities of the Senate and the House of Commons and their members.
Part 3 amends a transitional provision in the Budget Implementation Act, 2017, No. 1.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

I don't think we want to hear from authorities. I think Canadians want to hear from you that you will take responsibility for the use of this company, which is still allowed to be used across government. This is just completely unacceptable.

I will give you some more information, Minister. Perhaps you'll have a better response for Canadians to this.

GC Strategies reached out to the CBSA to create a relationship to sell Botler AI's technology and help it fulfill its obligations under Bill C-65. Let's make the connection. GC Strategies, which was used with the ArriveCAN app, is also being used within this contract. Instead of directly paying GC Strategies, the company it was in communication with, the CBSA decided to pay Dalian and Coradix to pay GC Strategies to pay Botler through an existing contract. This contract was valued at $21.2 million, and was informatics professional services.... It was also used, Minister, for ArriveCAN.

Does this contracting process concern you at all? If it does, what are you doing about it right now for Canadians?

This should be very concerning for you. This has seized meeting upon meeting of the government operations committee.

Please share with Canadians what actions you are taking right now—today—to ensure that we never have another RCMP investigation into this level of potential fraud with the government ever again.

Thank you, Minister.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Did the CBSA president task you or Mr. MacDonald or anyone else with filling the CBSA's need in response to Bill C-65? What was the president's initiative?

[Gord Johns, NDP, Courtenay—Alberni, BC]

Okay.

Did the CBSA president task you, MacDonald or anyone else with filling the CBSA's need in response to Bill C-65? What was the president's initiative on this?

[Gord Johns, NDP, Courtenay—Alberni, BC]

Well, Mr. MacDonald says he had never heard of Botler until November 19, 2019, when he was approached with an unsolicited proposal. However, we know from recorded conversations that Mr. Firth had been communicating with Botler long before that, telling them it was MacDonald who had discovered Botler and wanted their software to solve CBSA's Bill C-65 needs.

When were you aware that Mr. Firth was communicating with Botler on MacDonald's behalf? Were you aware at the time or after the fact?

[Cameron MacDonald]

Mr. Chair, I don't believe Mr. Firth said that, and I think you can check his transcripts. I think Mr. Firth said that he reached out to Botler after speaking to a number of CIOs around town. He had talked to me, and he had understood that Bill C-65 was important. At the time, there were news clips that CBSA had undergone a whole bunch of sexual harassment claims, and that's why I told him that it was one of my priorities.

I want to bring to your attention, since everybody is talking about facts—

[Cameron MacDonald]

I believe Mr. Firth was meeting with multiple departments. Bill C-65 was coming down across the entire government.

I received an unsolicited proposal. My understanding is that they went to nine different departments and did the same thing.

I couldn't tell you.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Can you tell me how GC Strategies knew about...? Well, I assume they followed Bill C-65.

How would they know to put a proposal to you for the AI application?

[Cameron MacDonald, Former Director General, Business Application Services Directorate, Canada Border Services Agency]

Thank you, Mr. Chair and honourable members of the parliamentary committee.

I have submitted the text of my opening remarks, but I'm going to add some words today because of some events last night.

There has been a concerted effort to portray Mr. Utano and me as corrupt. The narrative is compelling, but it's based on untrue allegations. The falsehoods and innuendos have been plastered in the national press. Senior CBSA officials have distanced themselves from us.

Our careers have been put on hold. Our lives have been disrupted.

Last night, I received an email from a Ms. Simmons, someone I do not know. It said that she hoped I would go to jail, and that among other things, I was corrupt, greedy and a sorry excuse for a human being. She hopes I am ashamed and that I will seek redemption.

These are all based on falsehoods. There was no cozy relationship, no conspiracy and no fraud involving Mr. Utano or me.

I'm grateful to have the opportunity to finally present the truth, address the extraordinary allegations that have been raised by Botler AI, and show through facts that you have been misled.

I will begin by providing you with some background on the ArriveCAN application.

During COVID, a serious need arose for a national mobile application to enable Canadians to re-enter the country. CBSA's contracting authority, the finance branch, authorized the sole-source, and PSPC negotiated the terms and authored the final contract. Our innovation team was given fewer than five days to pursue options. Six companies were evaluated. GC Strategies and Deloitte were the only vendors willing and able to satisfy the requirements in the narrow time frame.

I was not involved in the GC Strategies vetting. Two options were presented to my superior, then vice-president and chief information officer, Minh Doan. Minh Doan specifically rejected Deloitte as an option. Deloitte had, in fact, been my preference. As a result of the direction given to proceed by Mr. Doan, GC Strategies was recommended to the contracting authority. I was the director general of innovation. The decision was never mine to make.

For 12 months, until May 2021, I led the team responsible for the development and expansion of the ArriveCAN application.

During my participation, all task authorizations provided to GC Strategies were met, on time and on budget.

Prior to my departure, I provided a costing for ArriveCAN. It was $6.3 million. This was shared with my colleagues and supervisor.

Botler AI's allegations against me are unfounded.

Most complaints are opinions. Under the slightest scrutiny at this committee, they began to collapse. They told this committee they believed their chatbot would make them $26 million a year. Their disappointment has turned into a campaign of baseless accusations against Mr. Utano and me.

The facts are these: In 2019, Dalian Enterprises competed fairly for a general services IT contract. On November 19, 2019, I received an unsolicited, jointly branded GCS and Botler proposal for Bill C-65. The HR department was the client and decision-maker for the work with Botler. A feasibility study was asked for by CBSA that had six parts. There was never a pilot in scope. My VP instructed me directly to help them deliver an executive-appropriate presentation. I advised my VP that CBSA would use an existing contract. The proper contracting processes were followed. PSPC has validated this.

I have had an unblemished reputation in the public service for 23 years. I have competed openly for every single promotion I have ever received, starting from an entry-level position as a student. My actions have always been guided by a commitment to the public interest. The allegations that have been painted are incomplete and inaccurate—a misleading narrative.

The reality, along with the accountability of the leadership of CBSA.... The result is that my reputation and the careers of good public servants are being shattered.

I thank the members of the committee for the opportunity to share the facts openly and honestly.

[Kristian Firth]

We had subsequent meetings with labour relations at Correctional Service Canada and other ones, so we would go there and Miss Dutt would ask specific questions. The whole time on their website [Inaudible—Editor], they were completely compliant with Bill C-65, so we knew that the solution could do that, and there were subsequent meetings we had in other government departments with labour personnel to identify if it would fit within there.

I do remember several meetings, whether it was Correctional Service Canada or Shared Services Canada, with labour relations people, and that's how we identified that it would be suitable.

[Kristian Firth, Partner, GC Strategies]

Thank you, Mr. Chair, and good afternoon.

I am grateful to finally have the opportunity to correct the mistakes, omissions and falsehoods that have been voiced at and by this committee, and in the newspapers, over the past number of weeks.

The first one is with respect to my summons. I readily accepted the committee's invitation to appear, as I did last year, when I was the first to show up and testified for over two hours. I told the committee that because of parenting responsibilities this week, I could be available for one hour, but the committee preferred the two hours I'd be available the following week. I was portrayed as a reluctant witness who was playing hard to get. This is actually far from the truth.

Without this opportunity to appear here today, GC Strategies would continue to be bound to the confidentiality agreement with Botler that was conveniently presented to me for signature right before it started feeding the media with information. It wasn't out of choice that GC Strategies remained silent after learning of the numerous allegations made by Botler, especially being on the other side with contradicting information.

I welcome the opportunity to again explain my business and the contracting processes for government departments that have existed for several decades. The system has outsourced many contracting functions to the private sector. I was not around when this practice was established, but presumably the belief was that a competitive private sector could operate better than an increased bureaucracy.

The system provides that only qualified private sector vendors can bid on and receive government contracts. Becoming a qualified private sector vendor is not easy or quick. Many checks for security and reliability are required. GC Strategies has been a qualified vendor since 2015. There are between 600-700 such qualified vendors in Canada, competing on a daily basis to provide services to government departments and agencies.

These vendors range from very large companies that do work in-house to smaller vendors, such as ours, that put teams together on a case-by-case basis. This competitive system forces qualified vendors to continually deliver quality services at competitive rates, or they would simply not be able to secure work.

Because we rely on teams on a case-by-case basis, it is imperative that we cultivate relationships with service providers and advance their interests. However, we also need to maintain connections with departments to understand their needs and understand where the market is heading.

That is my business, and I'm proud of it, as I'm sure all other vendors in Canada are proud of theirs. You may not like the system that is in place. You might think the government can do the job better itself. You may not respect our work, and that is your right.

I, like all people running a business, make mistakes. We try to learn from our mistakes, but, in all honesty, we'll likely make more. GC Strategies made a mistake by sending the wrong version of the resumé, which ended up being submitted to the Government of Canada for the task authorization; however, this regrettable mistake was not intentional, and it in no way determined the awarding of the contract.

In short, the CBSA had pre-qualified the owners of Botler to do the work, as they were the only two resources with knowledge of their software. Botler was approved before any resumé was submitted or a task authorization created. This is all relevant to the specific events surrounding Botler.

Botler was a client I recruited because I thought it could fill an important need for the government's compliance with Bill C-65. I thought its specific product would be useful for many departments. I spent the better part of two years working with Botler and introducing it to various departments. The CBSA was one of them, but there were many more. I was even working with Botler to get it qualified as a vendor, so it could fulfill contracts directly, eliminating the need for vendors like GC Strategies.

The Botler pilot was delivery based, so Botler would get paid only when it delivered. It delivered the first two deliverables and was then paid everything it was owed. At no time did GC Strategies ever receive money for those deliverables that we did not immediately pass on to Botler.

Botler stopped delivering what was required of it, and the CBSA terminated the contract. I was asked to gather from Botler all new work that was done prior to termination and submit that to the CBSA for a review and payment. Nearly two months passed. At that point, Botler submitted the remaining four deliverables, along with an invoice. The deliverables were then submitted to the CBSA, and they were not approved. The documents were unreadable, and once a version came through that could be evaluated, the CBSA determined the work to be substandard, and it refused to pay.

That leads us here today.

Let me be clear. The Botler pilot project was in no way connected to ArriveCAN. GC Strategies made no money whatsoever after working with Botler for two years, including the pilot. GC Strategies, Dalian and Coradix each had their own individual contracts to complete work on ArriveCAN. At no point did GC Strategies work with or act as a subcontractor on Dalian or Coradix's contract for ArriveCAN. All work done for the ArriveCAN app by GC Strategies was done using our own contract.

Thank you.

International Trade

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Madam Speaker, it is always a pleasure to rise in the House to speak on behalf of the fine constituents of Calgary Midnapore, especially on such an important issue that truly affects their tax dollars.

I want members to take a moment and imagine a Lifetime movie that includes the elements of identity theft, forged resumes, contractual theft, fraudulent contracting and collusion. Members do not have to imagine this Lifetime movie, because it actually exists. It is the ordeal behind ArriveCAN.

ArriveCAN was created for $54 million. Experts have said that the app could have been created with simply $200,000 over a weekend. Instead, $54 million was spent on the app. Of that $54 million, $11.2 million went to a company called GCStrategies, and $4.3 million went to two companies called Coradix and DALIAN. I will add that these companies have actually received $80.3 million from the federal government over a significant period of time. It is very concerning that these companies would receive these large amounts of funding for the $54-million app.

Originally, this was an issue brought to the government operations committee last spring. I will say that the government tried to dismiss it. It tried to write it off as “nothing to see here”, and our objective at that time was just to try to get value for money for Canadians. As we have found out, it has become so much more than that. It has become a search for the truth. This was broken by The Globe and Mail's Bill Curry, when he broke the story of the RCMP's investigating this CBSA contract. The fact that GCStrategies, the group central to the creation of ArriveCAN, is the central player in the scandal leads to a lot of concerns.

The company at the centre of this is a small company called Botler. It originally did some work for the Justice Department. It was eventually reached out to by GCStrategies, the company at the centre of the ArriveCAN scandal, to do a pilot for Bill C-65, relative to sexual misconduct.

According to Curry's article:

The developers said they were first approached by GCStrategies's managing partner, Kristian Firth, via LinkedIn in late 2019. Mr. Firth said he was reaching out on behalf of his ‘client,’ who he later said was the CBSA's then-director, Cameron MacDonald.

[They said] they were shocked to discover that after interacting with GCStrategies and Mr. MacDonald for months, the funding for their software was approved through an agency contract with another company—Dalian—without their knowledge. They said they had never heard of Dalian at that time and never worked with any Dalian employees.

They said they later discovered that Coradix had submitted forms to the agency about their work experience without their knowledge or permission. For instance, [one of the employees] said a two-month summer internship at Deloitte on her résumé was inflated in an invoicing points form to say she had 51 months of experience working for [an] accounting firm. Years of experience is used in federal contracting to determine whether a contractor qualifies for [those positions]. It is also used to calculate per diem rates.

The story starts there, but it does not end there. GCStrategies' Mr. Firth also told these two employees of this company that:

...he could act as a broker to secure a contract with the agency. He also promised he could open doors for them to land contracts with other departments or have [their] software approved to use across the entire public service, which would be a substantial contract. He explained that he would do this for a fee that is contingent on successfully landing government contracts.

This company went on to record conversations with Mr. Firth. Those recorded conversations show Mr. MacDonald directed Botler in February 2020 to “‘please work with [Mr. Firth]’ and ‘let [Mr. Firth] work his magic.’”

“The conversations also reveal that Mr. Firth described Mr. MacDonald, in November, 2019, as a friend and said, 'I've been with him his whole career in government.' Mr. Firth referred to various senior public servants as friends.”

“They said they were asked by Mr. Firth to start working on the project even though they had yet to...sign a contract.” We get into the fraudulent contracting piece here. “For months, [the two employees] said they were repeatedly denied answers when they asked Mr. Firth for a contract so their legal team could review it.”

When called to appear last year before [the government operations committee] to answer questions related to ArriveCan, [the topic of discussion today], Mr. Firth said his company had invoiced $44-million in federal contract work with more than 20 different departments over the past two years. He said his company has no stand-alone office and just two employees—himself and Darren Anthony. Neither of them perform IT work themselves. Instead, they hire subcontractors to do the work in exchange for a fee of between 15 per cent and 30 per cent of the contract values.

“You asked me for advice on the key question of 'why GC Strategies' [since the government to determine why they had chosen GC Strategies] but I also think we are all grappling with 'who selected GC Strategies,'” he wrote...

“Mr. MacDonald's e-mail comments on suggested answers for the executives. The draft answers appeared aimed at convincing MPs that no single person was responsible for selecting the company.” Yet we know someone selected GC Strategies.

Mr. MacDonald “set up meetings for Botler with the Canada Revenue Agency, Correctional Service Canada, Global Affairs, Shared Services Canada, Transport Canada, Treasury Board and others in an effort to have the software approved as a government-wide project to all public servants.”

This is the crux of the concern for myself and my Conservative colleagues. When we are talking about ArriveCAN, it is a $54-million app, which, experts say, they could have done for $200,000. Here we have the company that received $11 million trying to arrange contracts across all of these other government departments.

“During this outreach, Mr. Firth introduced them to another consultant named Vaughn Brennan, who Mr. Firth said had extensive government connections in Ottawa. Mr. Brennan recommended that they send and e-mail to [the Deputy Prime Minister] from Mr. Dutt's e-mail account.”

In addition to the breadth of this fraud, we are concerned about the level at which individuals were complicit and informed.

“The contract for Botler to provide its services was not a direct contract between Botler and the border services agency. In fact, Botler's company name was not mentioned at all, nor was GC Strategies. Instead, the agency relied on a contract with Dalian and Coradix.”

“In a separate subcontracting document between Dalian and GC Strategies, which is not a direct contract with the government, GC Strategies is listed as a subcontractor to Dalian...along with an independent contractor named Patrick van Abbema—are listed as consultants.”

Unannounced to you as Coradix/Dalian were brought in as a pass through and they demanded 15% for doing so, CBSA were pissed at the overall pricing and threatened to pull the contract,” Mr. Firth wrote in an e-mail. “Your cost, plus 15% for me and 20% for Coradix etc, it rose to close to $500k. I was not prepared to slow the process down and stop our first client from purchasing so I removed myself from the equation completely and gave them a 15% discount.

“By September, 2021, Ms. Dutt and Mr. Morv [of Botler] had had enough and filed a formal misconduct complaint via the Sept. 27, 2021, e-mail to Mr. Utano and another agency official they had been dealing with.”

I will add this initial complaint was ignored, so they had to go on and do an additional complaint as well.

“They learned that the original contract through which their services were obtained was through an existing contract for IT services.”

“Like with ArriveCan, the border agency had turned to a general standing offer contract for IT services and added a specific request...”

“Through their research, [they] found that Dalian was submitting invoices and receiving payments...”

To summarize, in the words of Ms. Dutt:

This is about something that affects every single Canadian, every single taxpayer dollar that is taken from ... hardworking Canadians who are already struggling financially, that is given and spent through contractors through improper means. And I think that Canadians have a right to know what’s going on with their hard-earned money.

That—

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Okay.

What work did Dalian complete in the building of the program to help the CBSA fulfill its obligations under Bill C-65?

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

That's a no. Thank you.

Can you provide the contracts you signed with GC Strategies for the programs set by the CBSA to fulfill their obligations under Bill C-65, otherwise known as the Botler project?

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Okay.

Were you hired by the CBSA in order to help them fulfill their obligations under Bill C-65?

[Ritika Dutt]

Yes and no. Essentially, when we were contacted, we were contacted for a Government of Canada project, and the pilot for the CBSA was a means to the final end, which was the enterprise rollout. It was always the goal of the CBSA to be the pathfinder that rolled out the solution for Bill C-65 to the entire government.

Our standard price was $60 per user per year. GC Strategies said that he would add a 20% markup but, in fact, added a 30% markup to that suggested price. That brings it to $78.

The CBSA would then use their own procurement vehicles. I believe they said they wanted to put out an ACAN, the reason being that they could add an infinite amount of funds to that ACAN so that they would then be able to sell that markup, whatever they would add on top of $78—