Government Operations Committee on Oct. 24th, 2023

[Larry Brock, Conservative, Brantford—Brant, ON]

Do you agree with me, sir, that a corrupt intent is not an essential ingredient to the mens rea requirement under section 139? In fact, all you need to prove is that it criminalizes deliberate acts that seek to obstruct, interfere or hinder the pursuit of justice. In this case, the pursuit of justice is that Jody Wilson-Raybould had the courage to say that the Prime Minister was not going to influence her and that she was not going to give a remediation agreement to a corporate entity in Quebec that had some serious criminal charges. You can understand and appreciate why—

[The Chair, Conservative, Kelly McCauley]

I'm afraid, Mr. Brock, that is our time.

[Larry Brock, Conservative, Brantford—Brant, ON]

You can understand and appreciate why we wanted to hear from the commissioner. Would you agree?

[Duff Conacher]

Yes.

[The Chair, Conservative, Kelly McCauley]

Thank you, that is our time.

Mr. Kusmierczyk, you have five minutes.

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

Thank you, Mr. Chair.

I have a question for Mr. Conacher.

There are two companies that are sort of at the heart of the allegations, and they're two companies called Dalian and Coradix. The allegations of fraud state that they had submitted in their bids inflated experience or inflated information that would allow them, for example, to get increased per diems or even qualify for the contract.

Mr. Conacher, is this something that happens with regularity in these types of processes? I ask that because, again, this is a very, very serious issue. This goes to the heart of the issue of trust in our procurement process, so I very much appreciate your being here to answer our questions.

[Duff Conacher]

I don't know how regularly that occurs. It is one of the most difficult parts of this situation, I think. How much due diligence has to be done within government before a contract is handed out?

The problem with subcontracting is that it exponentially increases the due diligence burden on the government officials. That's why I think everything should be changed to eliminate these middle people. Just have companies who are actually doing the work bidding on the contract, without all these complicated subcontracting schemes. They are schemes. They will hide something, as a result, which will likely result in some violations of the rules that would not be possible if there was a direct contract with a direct bidder.

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

I appreciate that very much.

I mentioned trust. Again, this issue has been caught. It is being studied right now and investigated. Should Canadians trust the investigation? You already spoke about trusting the Auditor General in her work. Can we trust the RCMP process to get to the bottom of this, in your opinion, from what you've seen in the past?

[Duff Conacher]

As I mentioned, with the SNC-Lavalin situation there have been so many questions raised, with so much excessive secrecy and silence from the RCMP over four years, that we essentially forced disclosure. We forced them to make a public statement about the situation after four years. It shouldn't be allowed by any rule, so I have very serious questions about the RCMP.

The executive mentioned that there's an internal investigation going on and that it's independent. No internal investigation is independent. It's just not. An independent investigation means it's by someone who is actually independent, who is not in the pay hierarchy or the power hierarchy of an organization. That's why we have democratic government watchdogs, but they're all chosen by the ruling party, with very little consultation or input from the opposition parties. It shouldn't be that way either.

All these things need to change. The rules need to be strengthened in enforcement and penalties, or the system's a scandal, and you'll see scandalous behaviour continue.

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

Thank you.

Mr. Terrazzano, if the RCMP does find evidence of wrongdoing in this particular case, what are some of the consequences? Should we expand the scope? When I look at the facts, the two companies at the centre of this issue of concern are Coradix and Dalian. They've had contracts with the Conservative government that date all the way back to 2013, when they received $22.8 million from the Harper government; in 2014, $26.6 million from the Harper government; and in 2015, $27.6 million from the Harper government. The amount totalled $75 million.

If wrongdoing by these two companies, Coradix and Dalian, is found, do you think the RCMP and the Auditor General should expand that investigation to reach back in time and look at those contracts?

[Franco Terrazzano]

When it comes to legal issues, I'll leave the specifics with the RCMP. The Auditor General's report we'll leave with the Auditor General until we see the report.

What I'm really hoping for is that this committee will look forward at how to put in the guardrails to make sure this doesn't happen again, where we get a simple app for a $54-million hit to the taxpayers. I think the best two ways to do that...is to ensure accountability.

Taxpayers are out $54 million because of the ArriveCAN app. Which bureaucrat or bureaucrats will be out of a job? Which bureaucrat or bureaucrats will be out of a bonus? As we look down the road, no matter which party is in power, whether it's the Conservatives, the Liberals, the NDP, the Bloc or whatever party is in power, we can't have the incentive be, “Hey, you can get away with this type of waste. It doesn't matter, because you'll get a bonus.”

[The Chair, Conservative, Kelly McCauley]

That is your time.

Ms. Vignola, you have two and a half minutes, please.

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

Thank you, Mr. Chair.

Mr. Terrazzano, in January 2023, you wrote an article expressing skepticism that the federal government’s internal review of ArriveCAN would lead to meaningful changes.

I wholeheartedly agree with you that there should be a checklist before someone is allowed to receive a bonus. Bonuses aside, what would make an internal review truly effective and lead to real accountability?

If you're going to mention sunshine lists, could you please explain what they are, for the benefit of those following today's proceedings?

[Franco Terrazzano]

Yes, a sunshine list just discloses the compensation of the top earners in government, to see how that trend is increasing year over year.

As I mentioned, the vast majority of provincial governments implement a sunshine list for transparency 101 for taxpayers. I think that is a good, transparent movement for all Canadians at the federal level.

What would make an internal study from this committee as good as possible? You mentioned the bonuses. I mentioned the bonuses earlier. I think the committee needs to identify which government employees were responsible for the wrongdoing, where we went from $80,000 to $26 million to $54 million. Who was responsible?

Above that, why weren't other government employees, especially those at the top, saying anything when the costs were $80,000, $800,000, $8 million, $18 million and so on?

Beyond that, I really do believe that an immediate step to improve transparency is to just take the recommendations from the Information Commissioner, published in January 2021. Specifically, recommendations 2 and 4 are with respect to agencies that get these types of contracts being subject to the Access to Information Act. Recommendation 4 is that government employees or institutions can't skirt the access to information requests with section 19 when it doesn't apply.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Terrazzano and Ms. Vignola.

We'll go over to Mr. Johns.

Before you start, please, could you read into the record the information you requested earlier, so we have it properly on the record?

I won't take away your time. Go ahead, please.

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

Thank you. I asked six questions, so please be patient.

First, on September 27, 2021, Botler informed the CBSA that it should immediately stop payments to the contractor and request a refund of any amounts already paid. The question was, what did CBSA do in response? We didn't get an answer, so we asked for that to be tabled.

The next is whether GC Strategies is named on the Botler task authorization. They didn't answer.

Did the CBSA suggest that payments for this task authorization should flow through Coradix to GC Strategies and then finally on to Botler?

How much did the CBSA grant in additional contracts to GC Strategies, Coradix and Dalian after the report on September 27, 2021?

Has the CBSA ever consulted legal services with respect to Botler's allegations? She couldn't answer.

Those are all for Ms. O'Gorman to report back to the House within 30 days.

This for Mr. Doan: How many projects with GC Strategies, as either a contract or subcontract, were approved during your term as CIO of the CBSA, and what is the total value of those contracts?

It's 30 days, too, for Mr. Doan.

[The Chair, Conservative, Kelly McCauley]

Thanks.

Please go ahead with your two and a half minutes, Mr. Johns.

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

Mr. Conacher, thanks to Ms. Dutt and Mr. Morv, we've also had access to an email they received from Mr. Firth of GC Strategies. It's absolutely outrageous.

Mr. Firth tells them, “Corradix/Dalian [were] brought in as a pass through and they demanded 15%.... Your cost, plus 15% for me and 20% for Corradix etc., it rose to close to $500k!!”

He describes how CBSA was “pissed” at the resulting price increase. He says he wasn't going to tell Botler about the Dalian middleman at all. He thought he could leave them “none the wiser”.

Personally, I cannot be convinced that Dalian was necessary to facilitate this work when the party doing the work didn't even know they existed. On top of that, Mr. Firth is so confident that he can get Botler additional government contracts that he appears to offer to waive his fee for this contract and recover it from future ones.

This is all public information.

He says he's willing to remove himself from the deal. He asked if Botler wants him to “recover from Corradix” or “let it slide and look out to the next one to recover”. He mentioned a possible future contract with CRA.

If Mr. Firth is indeed suggesting that Botler pay him for his work on this project out of a future contract, would that be an example of contract performance fraud?

What other concerns does this raise for you, Mr. Conacher?

[Duff Conacher]

Yes. The other concern it raises is essentially saying it's a contingency fee payment of future contracts that I will get from you, and you'll pay me then a slice of that contract, essentially, as a success fee. That is illegal under the Lobbying Act. That's the other concern it raises.

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

In terms of your overall response to this, when you see it, what are your thoughts in terms of what needs to change to never allow this to happen again?

[Duff Conacher]

It's increasing the capacity of the public service internally, but also increasing the accountability of the public service. If people internally are going to be handing out these contracts as opposed to using these middlemen, who are really lobbyists.... The ones who are getting the contracts and subcontracting are really acting as lobbyists, who build these relationships and then are the gateway—

[The Chair, Conservative, Kelly McCauley]

Mr. Conacher, I apologize. We have to cut you off there, because we're down to our last few minutes. Maybe you could provide in writing the rest of your answer.

We have just a tiny bit more time. We are going to go for two and a half minutes each to Mr. Genuis and then to Mr. Kusmierczyk.

Please go ahead, sir.

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

First, I have a follow-up on our request for information. It was mentioned that six DGs worked for Mr. Doan.

I would like to request the names of those individuals as well as emails sent to or received from them using the words “Firth”, “Anthony” or “GC Strategies”, from March 2022 to the present. I'd like them from the department within 30 days.

Is there agreement from the committee for that request?

[Some hon. members]

Agreed.

[The Chair, Conservative, Kelly McCauley]

That's fine. Thank you.