Public Accounts Committee on Feb. 20th, 2024

[The Chair, Conservative, John Williamson]

Good morning, everyone.

I call this meeting to order.

Welcome to meeting number 101 of the House of Commons Standing Committee on Public Accounts.

Today's meeting is taking place in a hybrid format. Pursuant to the Standing Orders, members are attending in person in the room and remotely using the Zoom application.

I will remind you that all comments today should be addressed through the chair.

Pursuant to Standing Order 108(3), the committee is resuming its study of Report 1 of the Auditor General of Canada, referred to committee on Monday, February 12, 2024.

I'd like to welcome our witnesses. We have a full house here.

We have, from the Office of the Auditor General, Karen Hogan, Auditor General. We also have with us Andrew Hayes, deputy auditor general; Sami Hannoush, principal; and Lucie Després, director.

It's nice to see you. Thank you for being here.

From the Public Health Agency of Canada, we have Heather Jeffrey, president; Martin Krumins, vice-president and chief financial officer; and Luc Brisebois, acting vice-president, health security and regional operations.

Thanks to all of you as well for being here today.

The two agencies will have five minutes each.

Ms. Hogan and Ms. Jeffrey, you have five minutes.

I'll begin with the Auditor General and then we'll proceed to a round of questions.

It's over to you, Ms. Hogan. Thank you.

[Karen Hogan, Auditor General, Office of the Auditor General]

Mr. Chair, thank you for again inviting us to discuss our report on ArriveCAN, which we released last week, on February 12, 2024. I would like to acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinabe people.

This audit examined whether the Canada Border Services Agency, the Public Health Agency of Canada, and Public Services and Procurement Canada managed all aspects of the ArriveCAN application in a way that delivered value for money. I will focus my remarks today on the role played by the Public Health Agency of Canada.

As I stated last week, problems in ArriveCAN's design, implementation, oversight and accountability began early on. Confusion between the Public Health Agency of Canada and the Canada Border Services Agency about their respective roles and responsibilities for the application led to an accountability void that persisted for close to a year and a half.

Each believed that the other was responsible for establishing a governance structure and neither developed or implemented good project management practices, such as developing objectives and goals, budgets and cost estimates. It's not clear to me how you can responsibly manage spending without a budget or track progress without goals.

The Public Health Agency of Canada was the business owner of ArriveCAN until April 1, 2022. At that date, ownership and responsibilities for ArriveCAN were transferred permanently to the Canada Border Services Agency. In our view, the Public Health Agency, as the business owner, was responsible for establishing the governance structure.

Deficiencies in the Public Health Agency of Canada's management of contracts contributed to our concerns about value for money. We found that the agency awarded a professional services task authorization using a non-competitive approach. We found no documentation of the initial communications or the reasons why the agency did not consider or select other eligible contractors to carry out the work.

We also found that while the original contract included milestones with clear deliverables and pricing, it was later amended and replaced with less specific deliverables to allow for more flexibility. In addition, the agency did not set out specific tasks, levels of effort and deliverables for these contracts in task authorizations.

In support of transparency and accountability in the use of public funds, the Public Health Agency of Canada should fully document its interactions with potential contractors and the reasons for decisions made during non‑competitive procurement processes.

This concludes my opening statement.

We would be pleased to answer any questions the committee may have. Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much, Ms. Hogan.

We'll now go to Ms. Jeffrey.

You have the floor for up to five minutes, please.

Thank you.

[Heather Jeffrey, President, Public Health Agency of Canada]

Thank you, Mr. Chair.

Thank you for the opportunity to appear before this committee today to discuss the report of the Auditor General on the development of the ArriveCAN application.

I'm pleased to join you from the traditional unceded territory of the Algonquin Anishinabe people.

I'm joined today by my colleagues, Martin Krumins, vice-president and chief financial officer of the corporate management branch, and Luc Brisebois, acting vice-president of the health security and regional operations branch.

On behalf of the Public Health Agency of Canada, I would like to thank the Auditor General and her team for their work. We welcome this report.

The development of the ArriveCAN app took place in the context of Canada’s response to the COVID-19 pandemic. The Public Health Agency identified the need for an application of this nature stemming from the public health requirement to put measures in place to reduce the introduction and spread of COVID-19 and its variants into Canada. A series of border measures using emergency orders under the Quarantine Act required the collection of public health information from travellers.

Initially, this information was collected using a paper form. Due to the volume of travellers entering Canada, the paper forms quickly became operationally inefficient, creating a significant backlog of data and contributing to traveller lineups at airports and border crossings. This made it difficult to fully administer the border measures, while still ensuring the essential travel and transit of people and critical goods.

At the request of the Public Health Agency of Canada, the Canada Border Services Agency developed an application to digitize this process. This was critical to Canada’s ability to monitor, rapidly assess and respond to COVID-19 as it evolved. It allowed the Public Health Agency to better model COVID-19 spread, severity and trends; to identify variants of concern and travellers from higher risk countries; and to initiate exemptions for essential workers. It informed border measures and subsequently facilitated the safe resumption of international travel.

While the Auditor General concluded that the speed and quality of the information collected were greatly improved by the ArriveCAN application, the report outlines serious areas of concern in relation to the processes and controls around the application's development.

The Public Health Agency of Canada fully accepts the recommendation that the agency should document interactions with potential contractors as well as the reasons for decisions made during non-competitive procurement processes. We are strengthening our existing guidance and supporting tools, and putting in place training with respect to these file documentation requirements.

The recommendation directed to the agency also calls for a process to be put in place to ensure compliance with the requirements of the contracting policies. The Public Health Agency is updating all of its quality assurance protocols to ensure that these requirements are fully and consistently met.

Finally, the findings point to the importance of formally documenting roles and responsibilities at the outset of a project, rather than at a later stage, as was the case with the ArriveCAN application.

We believe this finding to be particularly important in the context of an emergency response, and it is being incorporated into our preparedness and contingency plans for future emergencies.

Thank you. I look forward to your questions.

[The Chair, Conservative, John Williamson]

Thank you very much.

I will now turn to our first questioner.

Mr. Barrett, you have the floor for up to six minutes, please.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

The Auditor General said, “the Public Health Agency of Canada did not develop project objectives and goals, budgets and cost estimates, assessments of resource needs, or risk management activities.”

Ms. Jeffrey, did you develop a budget for ArriveCAN?

[Heather Jeffrey]

There was governance established around ArriveCAN, but it focused on the public health deliverables and the nature of the border measures that needed to be put in place and operationalized through the app. There was no overall project established as should have been the case in IT projects.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

There was no budget. Was there a projection of the expected cost?

[Heather Jeffrey]

There were initial contracts put in place, but incrementally, as you are aware, those contracts were added to and were administered in sequence. There was no overarching budget that covered those costs.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Do you believe this failure to have a budget is the reason that the cost of this project ballooned to at least $60 million for taxpayers?

[Heather Jeffrey]

When we look at the situation in Canada in March 2020, we see that it was a novel pandemic, and the timelines and the nature of the response that would be required were not known. This was an evolving situation. I recall when we looked at—

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Okay. I appreciate your response, though it is not an answer. You will have noted in the Auditor General's report that the pandemic was not an excuse or justification for the rules to be thrown out the window. Your agency owned this app for almost the entirety of the pandemic, and you never developed a cost estimate for it.

Did you do any performance reviews on it quarterly, every six months or every year? Did that happen?

[Heather Jeffrey]

The operations of the app were evaluated through our governance structure, which included the director general, ADM and deputy management committees on border services. We assessed the operational results of the app as we went.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

But the cost to Canadians was never included in a single review by your department. Is that correct?

[Heather Jeffrey]

The documentation of the cumulative cost was not part of the documentation of that governance. That's correct.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Who is the minister ultimately responsible for the Public Health Agency of Canada?

[Heather Jeffrey]

The Public Health Agency of Canada is part of the health portfolio and reports to the Minister of Health, but the contracts that were put in place were put in place—

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Who was the Minister of Health who oversaw the development of the ArriveCAN app?

[Heather Jeffrey]

The ArriveCAN app was jointly developed between the Public Health Agency and the Canada Border Services Agency.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

During the time that the ArriveCAN app was first developed, who was the Minister of Health?

[Heather Jeffrey]

At the outset of the pandemic, the Minister of Health was Minister Hajdu.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

The Auditor General said that your agency was responsible for setting the governance structure, as you referenced, which are the rules, procedures and processes for ArriveCAN. This was your duty at PHAC. Is that correct?

[Heather Jeffrey]

Yes.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

If PHAC is part of the health portfolio, and the Minister of Health was Minister Hajdu, then, as the minister, she's responsible for this major failing. There was no good news in the Auditor General's report for the government, for the ministry of health or for the Public Health Agency of Canada.

Do you recognize that this is a major failing, this $60-million boondoggle?

[Heather Jeffrey]

We certainly recognize that the failure to put in place formal project governance at the outset of this project led to inadequate oversight of the project and meant that the costs were not appropriately tracked as they were developed. We have put in place numerous measures to ensure that this does not happen again.

There was a large public health emergency—