Government Operations Committee on Feb. 14th, 2024

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

I'm going to ask you the questions I asked you—

[The Chair, Conservative, Kelly McCauley]

I'm afraid that is our time.

Mr. Bachrach, you have two and a half minutes, please.

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

Thank you, Mr. Chair, and thank you, Ms. Hogan, for your responses so far.

We're getting to this question of whether this is a situation specific to the ArriveCAN app and specific to the conditions of the pandemic, or whether this is something more systemic throughout government procurement. If we recall the circumstances by which the ArriveCAN app drew people's focus and attention, we see that it really started with the public health components of the app. Now we're talking about potential misconduct when it comes to procurement.

In your view, is this something that is likely to be a problem across government procurement?

[Karen Hogan]

I can't really speak to that, because this audit was really focusing in on the procurement process around ArriveCAN. I can tell you that the procurement ombud, who recently released a report, looked at procurement at the Canada Border Services Agency and raised similar concerns. I will tell you that our recommendations were rather quite aligned. When I read his report, I think I was left with the impression that he was as perplexed as I was about the lack of documentation at the Canada Border Services Agency around procurement.

If you have two seconds, I believe that Andrew Hayes would like to add something, if possible.

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

Sure.

[Andrew Hayes, Deputy Auditor General, Office of the Auditor General of Canada]

Yes, I just want to add that it's interesting that the procurement ombud did suggest in a recommendation that PSPC should retract the authority of the CBSA to issue task authorizations. That's a pretty significant recommendation. I think that when the president appeared yesterday at the public accounts committee, she mentioned the fact that actions that she described as a “belt and suspenders” were being taken to address what might be issues that could be a bit broader. She's taking a different approach, which might be more severe right now.

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

I would like to ask one more question. My colleague, Gord Johns, brought forward a motion to expand this committee's outsourcing study to look at government contracts being given to the big six consulting companies: Deloitte, KPMG, McKinsey, Pricewaterhouse Coopers, Accenture and Ernst & Young.

Can you tell me about your office's plans for such an audit? Is this something we can expect to see in the near future?

[The Chair, Conservative, Kelly McCauley]

I'm afraid the answer will have to be in the near future, because we're out of time. Perhaps we can get back to it in your next round.

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

Thank you, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Next, we have Mr. Genuis, for five minutes.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Auditor General, we have in front of us a devastating audit showing outrageous cost overruns, rigging of contracts, a serious absence of documents, and the breaking of ethics rules on a sole-source contract for an app that didn't work and sent at least 10,000 people falsely into quarantine. This is the “arrive scam” app scandal. It adds to things we already know about résumé tampering, waste, cozy relationships with useless contractors and, in some cases, activity that was clearly criminal.

What we do not yet know fully is the motivation animating the people involved in this scandal. None of this was necessary, and none of this was normal. There's no plausible excuse for what happened.

Why do you think they did it?

[Karen Hogan]

I'm unable to answer that question. That's something an RCMP investigation would likely answer if it were to look into this matter.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Did you see any indication of what was motivating the people involved in these actions, other than those who made money from it, I suppose? What about the people inside the government?

[Karen Hogan]

I believe the public servants were responding to a need. There was a need to improve the efficiency at the border, and the ArriveCAN app, as we reported in 2021, improved the quality of the information that was gathered at the border as travellers were coming in.

The ability of the government in—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

I'm sorry to jump in. It's because of the time limit.

I understand that explains the perception around having some kind of an app, but in terms of the way they operated specifically, the choices that were made around documentation and rigging, did you have any indication of what might have motivated those choices?

[Karen Hogan]

When we spoke to individuals, they often told us that it was the pandemic. They were just trying to respond to a need. In my view, an emergency is not a reason to throw the rules out the window. You should still follow good procurement practices.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Essentially, those are the same excuses we're getting from the government right now. I agree with you that this was not adequate.

We have an internal investigator looking into this now, apparently. This internal investigator is subject to the authority of the president of the CBSA and has acknowledged that he is not independent.

What failures does this audit point to, specifically, in the actions of the president's office?

[Andrew Hayes]

In terms of the audit findings, I'll answer this quickly.

The failure of senior management will be in the lack of oversight and monitoring. We mentioned that there wasn't a budget set up at the beginning. It's very difficult to monitor whether a project is on time or on budget when you don't have a budget.

Senior management should have been watching this.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

There's no way senior management could say, “Oh, well, there were a couple guys at mid-level.” You're saying there's an expectation of oversight. Can you confirm that?

Can you also advise what expectations you would have had of PCO in terms of ensuring the proper processes along the way?

[Andrew Hayes]

I would agree that senior management should be watching what's happening in the organization, whether that's the chief information officer or, on a project that's spending a lot of money, the executive committee.

In terms of the Privy Council Office, at this point we wouldn't have had expectations it would be watching this, except for the fact that, because of the nature of the pandemic, it would have been wanting to see that there was a way to collect information at the border in an efficient manner.

It's understandable, because this was under the agency's authority, that CBSA should have been responsible and accountable for how this happened.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

The department and the minister were responsible. You would have expected, because of the nature of the pandemic, there would have been some questions about the process from PCO. Obviously, it was not its primary responsibility.

[Andrew Hayes]

This was the responsibility of the Public Health Agency of Canada and the Canada Border Services Agency.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you.

Ms. Hogan, in your time working in this area as Auditor General, would you say this is the worst you've ever seen?

[Karen Hogan]

Well, it's definitely very bad record-keeping and financial record-keeping. It's not the worst financial record-keeping I've ever seen—to have invoices that clearly did not have sufficient information to be able to validate that the services had been received, and then where to record them and what project to charge them to.

I testified yesterday about how we had to go through many journal entries at times, which didn't really say much, to get to the original journal entry to find the source documentation, to then be able to trace it to a task authorization and see if it was linked to ArriveCAN or not. With that kind of record-keeping.... It shouldn't be that difficult to find out where money went and what it should be charged to.

[The Chair, Conservative, Kelly McCauley]

Thanks.

We have Mr. Jowhari, please.