International Trade Committee on March 19th, 2024

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Yes, of course. Please be brief.

[Ted Gallivan]

We had lively internal discussions about the agency's detailed requirements, but ultimately determined those requirements ourselves internally.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Okay. I will come back to my question then.

Did Deloitte resolve the problems identified by the agency in its review of the functional technical specifications?

[Ted Gallivan]

We have a list of concerns and they have nearly all been resolved. We are still working on a small number of issues.

I think you are referring to things that we did not ask for but that, in light of events, should have asked for. We are working towards implementing them in 2025 or 2026.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Are there modules or functionalities that are not working or that will be deactivated with the implementation of CARM or is everything working now?

[Ted Gallivan]

Some Canadian companies and some of our own employees prefer to keep using the old method. To reduce the difficulties associated with changes, we have created procedures to bridge the gap between the status quo and the new system. So there are transitional manual procedures that allow people to continue to operate in the same way. Those people thought it was too risky to implement too many changes in a short period of time.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Before they can use CARM, brokers and service providers in particular have to be certified. They have to submit their system to a series of tests to ensure that communication is effective and the Agency is receiving the required information.

What percentage of stakeholders has been certified?

[Ted Gallivan]

That's a great question. That is in a sense the challenge that brings us here today.

We have three systems that work perfectly. There are other systems that also work, based on our observations. During our trials, we see that the computer programs work because we have tested them. Yet the people who designed them do not want to submit them and receive certification.

It is kind of a game, I think. Some people have computer programs that might work, but perhaps they are waiting for the deadline to have them certified.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

So at this time you do not have—

[Ted Gallivan]

We have three products that work perfectly. We have various other products that are now 75% functional.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Okay.

[Ted Gallivan]

We are working to bridge the gap between 75% certification and 100% certification. There are not many weeks left to get there. As I mentioned, though, we have seen those computer programs during trial periods and know they could be certified.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Is there a deliverable or a document setting out all the functional technical specifications of the system, comments by the agency, and programs affected by those specifications?

[Ted Gallivan]

We have documents detailing the final version of the specifications. We also have records of our internal discussions. Those include the pros and cons, and the final decisions.

So I would say yes in both cases.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Go ahead, Mr. Cannings.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you for being before us once again.

There's a big overarching question I have, that the NDP has, about this and other government outsourcing programs. I think we would all agree around this table that the digital world is something we have to move into. We have a minister of digital government, or something like that. Why do we keep outsourcing this stuff—ArriveCAN, CARM—to a company like Deloitte?

The amount is $500 million-plus, and there are concerns that it will balloon much larger. For that amount of money, we could develop the in-house digital expertise within government to do all that. I see that Canada Post has just sold off their IT section to Deloitte. To me, this is a great disservice to the Canadian public and to the Canadian taxpayer.

I'm just wondering why we have to keep doing this. Why was the decision made to go to Deloitte when we should be developing these services in-house, in the Canadian public service? It would save us money. We could sell it to France, if that were the case.

[Ted Gallivan]

I'll throw it over to Mr. Leahy for the rationale on why it was Deloitte, but I'll say two things up front.

First, the CBSA has already reduced by 25% its reliance on external contractors. We have plans to further reduce our reliance on external IT work contractors in 2024.

I would also like to clarify—although your point remains—that $182 million was paid to Deloitte. The rest of the money was spent by public servants. A hundred per cent of the money wasn't going to Deloitte. It was $182 million to Deloitte. However, We take your point.

Mr. Leahy can talk a bit to the rationale about why it was Deloitte.

[Mike Leahy]

The original rationale was based on capacity within the agency. It was new technology sitting on a new technology platform. How many people did we have in the agency who knew how to do that work? The decision was made to bring in an expert from outside. We're hosting this on SAP. SAP experts are difficult to find. We don't have enough in the agency, so we brought in an expert to do it.

The progression from there is what we're seeing the CBSA embrace or take over—the business functions, such as analytics and how we use the data to do our work. That's a function we're looking at: What does Deloitte do versus what we do? That, I think, is the growth potential. If we could take ownership of business functions where we use the data from CARM or use the analytics capability that came in, the reliance on the consulting firms would dissipate.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

With that $182 million paid to Deloitte, will they not hire any new people to do that? Do they have that capacity in-house? I'm a bit skeptical that they will not be subcontracting out with that money.

Again, this is something we should strive for. The future is there; we're going to keep doing this. We had ArriveCAN, which cost a tenth of this.

I don't know; I'm just putting that out there.

[Ted Gallivan]

Perhaps I can address a couple of points that were made.

In our own system integration testing, we had the question of load: Could we take on a batch file with 10,000 or so transactions? I think that's a case where we saw the added value of Deloitte's global network. We were having trouble with the system performing and chewing through huge volumes of transactions. They were able to tap into Deloitte's global network to bring in people around the world, and then back to the source vendor, SAP, to bring people in.

I think in some instances, it's pretty clear that there's value in engaging somebody who has done something three or four times before to increase the confidence in and reliability of the product, to get there more quickly and, when you have a problem, to increase the workforce. CARM will go live. Deloitte is mobilizing. They have up to 260 people ready to work and they'll have 170 ready to support us. If everything goes perfectly according to plan, they'll release that workforce and the expenditure will drop accordingly. If we need them, they'll mobilize a kind of SWAT force of up to 260 people.

That's difficult to do in government. It's difficult to hire 260 public servants just in case you need them and then let them go after two weeks because you don't.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Much of this work will be done outside Canada, then, like the Accenture situation we had, where it was done in Brazil.

[Ted Gallivan]

Maybe I'll turn to Mr. Leahy to talk about Canada.

[Mike Leahy]

The requirements are such that the services are performed in Canada and the data is stored in Canada, so the Deloitte team is in Canada.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I thought you said you were taking advantage of its global network.

[Ted Gallivan]

When it gets hot, they draw on the global networks and fly people into Canada to work on our product.