Public Accounts Committee on April 3rd, 2024

[The Chair, Conservative, John Williamson]

Good morning, everyone. I call the meeting to order.

Welcome to meeting number 111 of the House of Commons Standing Committee on Public Accounts—

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Mr. Chair, I have a point of order, much to my chagrin.

[The Chair, Conservative, John Williamson]

Go ahead, Mrs. Shanahan.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

It's about the procedures of our committee and the meetings scheduled in weeks when we should be spending time with our constituents. We did receive a work plan for the meetings this week, but we only got it this morning at 8:43 a.m. I would remind you that normally members should be in their ridings this week to work with their constituents.

It's not really how this committee usually operates. Normally, we do confer and the meetings are not unilaterally planned by the chair. Now that we have our work plan, I hope that from now on we won't have any surprise meetings like the ones this week.

Thank you very much.

[The Chair, Conservative, John Williamson]

Okay. It was more of a political speech.

Ms. Shanahan, I took the courtesy of having the clerk instruct everyone about these meetings, plus the work plan came out today, but before that, the notice of the meeting came out both at the end of last week and yesterday.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

I have a point of order, Mr. Chair.

[The Chair, Conservative, John Williamson]

Ms. Khalid, I'm addressing a point of order right now. Why don't you just hold on a second? I'll finish up with Ms. Shanahan and then hear your point of order. When I turn to you, I'll address your point of order just once, and then we can deal with it later if you would like.

Ms. Shanahan, the work plan is not, of course, a notice. We had a subcommittee meeting on this. Your representative on that subcommittee was welcome to brief you on what was discussed. I've sent Ms. Yip a note today so we can talk about it tomorrow or wait until next week. The preference is to wait until next week.

Ms. Khalid, go ahead on your point of order, please.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Chair, I object to your calling Ms. Shanahan's concerns political. I think we have worked very well through consensus on issues in this committee in the past. We are a non-partisan or a multipartisan committee, and it's not fair for you to make those objections, Chair.

[The Chair, Conservative, John Williamson]

Thank you.

Ms. Khalid, all committees are—

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

I'm sorry, Chair, but I'm not done.

[The Chair, Conservative, John Williamson]

This is not a point of order, Ms. Khalid; this is a statement.

All committees are multipartisan. This is one that is also opposition-led. We had a subcommittee meeting on this, and I gave everyone what I thought to be suitable notice and I received no objections beforehand. I am now on the floor, which is disrupting the meeting. This is not a point of order, so I'm going to move on. You will be in a position to make a further statement when it is your time.

I will say that my email works even when I'm not in committee, and members are of course welcome to work either through me or through their representative on the subcommittee.

The idea, to Ms. Shanahan's point, that today's working calendar represents the first that any of you have heard of this is false. There was unofficial notice given a week ago as well as the official notification at the end of last week, and then yesterday as well.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

On a point of order, Chair, my intervention was more about how I hoped that we would now follow the work plan and the subcommittee discussions, and that we would have no more meetings called unilaterally by the chair.

Thank you.

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

Chair, if we're just offering points of order, I would like to make a point of order that I hope we don't have points of order that aren't actually points of order, such as those from the previous two speakers.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Barrett.

I was taking Ms. Shanahan's last comment as a tying a bow on her previous comment, and I will now continue the opening process of welcoming our witnesses. Then we'll get to the rounds of questioning.

Just for the record, everyone, the indication I have is that the preference from members is for us to review the Tuesday subcommittee work at the end of the meeting.

Without further ado, 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 by using the Zoom application.

I remind everyone that all comments should be addressed through the chair.

Pursuant to Standing Order 108(3)(g), the committee is resuming consideration of the Auditor General's Report 1, 2024, entitled “ArriveCAN”, referred to the committee on Monday, February 12, 2024.

I'd now like to welcome our witnesses. From the Office of the Auditor General, we have Andrew Hayes, deputy auditor general; Sami Hannoush, principal; and Lucie Després, director. From the Canada Border Services Agency, we have Darryl Vleeming, vice-president and chief information officer, and Jonathan Moor, vice-president, comptrollership branch.

Mr. Hayes, you'll be given up to five minutes for your opening remarks, and then we'll turn to the CBSA.

Without further ado, you have the floor, Mr. Hayes.

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

Mr. Chair, thank you for inviting us again to discuss our report on ArriveCAN.

I would like to acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinabe people.

I am accompanied today by Sami Hannoush and Lucie Després, who were responsible for the audit.

Our audit of the ArriveCAN application looked at how the Canada Border Services Agency, the Public Health Agency of Canada and Public Services and Procurement Canada managed the procurement and development of the application, and whether they spent public funds in a way that delivered value for money.

You have heard the Auditor General emphasize how deeply concerned we are by what this audit didn’t find.

We didn’t find records to accurately show how much was spent on what, who did the work, or how and why contracting decisions were made, and that paper trail should have existed. Overall, this audit shows a glaring disregard for basic management and contracting practices throughout ArriveCAN’s development and implementation.

Government organizations needed to be flexible and fast in responding to the COVID-19 pandemic, but they still needed to document their decisions and demonstrate the prudent use of public funds. In this audit, we found disappointing failures and omissions everywhere we looked.

Public servants must always be transparent and accountable to Canadians for their use of public funds. An emergency does not mean that all the rules go out the window and that departments and agencies are no longer required to document their decisions and keep complete and accurate records.

This concludes my opening remarks. We would be pleased to answer any questions the committee may have.

Thank you.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Hayes.

Mr. Moor, I understand that you have an opening statement. You have five minutes, please.

[Jonathan Moor, Vice-President, Comptrollership Branch, Canada Border Services Agency]

Good morning, Mr. Chair and honourable members of the committee.

I'd like to thank the Auditor General and the procurement ombud for their reports, which have identified some important lessons for us all.

The Canada Border Services Agency has already implemented a number of actions to address their recommendations. At the onset of the pandemic, the CBSA was focused on protecting our borders while maintaining the flow of essential travellers and trade. The agency needed to adapt its operations at a time of considerable uncertainty over health risks.

The need for ArriveCAN arose quickly when it became clear that the manual, paper-based processes for tracking the contact tracing and health information of travellers did not meet the needs of the Public Health Agency of Canada. PHAC asked the CBSA to assist it by developing a digital form, and the first version of ArriveCAN was released six weeks later. Over the following two and a half years, the CBSA responded to the changing health requirements set out in over 80 orders in council by releasing 177 different versions of the app.

The agency has estimated that the border health measures related to the ArriveCAN app cost $55 million, including a number of non-IT costs, such as over $6 million for the Service Canada call centre.

The Auditor General and the procurement ombud reports have identified a number of very serious weaknesses in procurement and internal controls processes. We have accepted their recommendations, and our management response plans are already under way.

I would like to highlight a few of those actions aimed at strengthening the agency's governance and assurance functions.

We have strengthened the first line of defence by requiring all HQ staff with financial delegations to retake four procurement training courses to help them better understand their responsibilities.

Given the weaknesses in procurement oversight, we have established a new executive procurement review committee to strengthen the second line of defence by reviewing all contracts and task authorizations over $40,000. We have also established a new procurement centre of expertise, which is developing an ongoing program of quality assurance reviews to ensure compliance with the directive, with a particular focus on the need for proper record-keeping.

Our management response plans are aligned with the plans of other government departments, as developing the ArriveCAN app was a shared responsibility. The agency leveraged PSPC's contracting authorities for over 30 of those contracts and Shared Services Canada's for seven contracts. The CBSA was the contracting authority for the remaining four contracts.

In the first year, the agency was responsible for managing the development, enhancement and operations of the ArriveCAN app on behalf of PHAC. However, no new funding was received in the 2020-21 financial year. The costs were coded to a general COVID-19 pandemic measures account, which would have included other pandemic-related expenditures, such as personal protective equipment and cleaning. The agency did establish a dedicated financial code in the second year when funding was provided by PHAC and by Immigration, Refugees and Citizenship Canada. In hindsight, it should have been created much earlier.

I am very proud of my employees, colleagues, and frontline border services officers who served Canada throughout the pandemic. We acknowledge the very serious deficiencies and welcome the lessons learned. We are now focused on addressing the recommendations that have already been made.

We would be pleased to answer your questions.

Thank you, Mr. Chair.

[The Chair, Conservative, John Williamson]

Thank you very much.

We'll begin our first round of questions now.

Mr. Brock, you have the floor for six minutes.

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

Thank you, Mr. Chair.

Good morning. Thank you to all the witnesses for your attendance today.

My first line of questioning will be for the Auditor General's team. Anyone can answer.

A couple of weeks ago, in mid-March, we heard from both Darren Anthony and Kristian Firth, the two principal owners of GC Strategies, also known as “Government of Canada strategies”, who picked apart the findings in the Auditor General's report.

Specifically, Mr. Firth said his reputation had been damaged by “false information” in what he called an “inaccurate” report by the AG and that—quoting—“virtually everything reported about my company in the media and stated about me and my company has been false.” He said that his company was paid $11 million for the ArriveCAN, disputing the Auditor General's findings that GC Strategies received almost double that, $19 million. He blamed the discrepancy on flaws in the government's financial systems.

We then heard from his partner, Darren Anthony, who, surprisingly, simply parroted everything that his partner had said. He didn't even take the time to actually read your report and didn't take the time to read the report of the procurement ombudsman, but had no problem stating that everything was categorically false. Specifically, he said the Auditor General's findings were inaccurate. He said that the reports from both the AG and the procurement ombudsman, which found serious problems with ArriveCAN contracts, were wrong and admitted again that he had not read the report.

I'm sure this is not the first time that the AG's team has learned about these particular statements. I'd like to provide an opportunity for you to respond on how you feel about these particular statements.

[Andrew Hayes]

Thank you for the question.

I'll start with the findings. We're confident with the findings that we provided to Parliament in our reports. We have a rigorous audit process to make sure that the facts and information we provide are accurate.

With respect to the estimates, we did provide an estimate in the report around the overall cost, and we identified an amount per contractor. There are some facts that absolutely cannot be disputed. In particular, it is a fact that the contractors were paid the amounts that we listed in our report. I should say that they received at least those amounts. Some contractors received more.

What is really at issue is whether or not those amounts should be attributed to the ArriveCAN app versus work on another IT project, and this is where the problem of poor record-keeping by CBSA raises confusion and leaves these open questions. Ultimately, in our report we mentioned that the poor record-keeping led us to have to build up an estimate. We used the CBSA's financial systems, the contracting documents and other evidence to build up this estimate.

It is important to remember that our estimate includes more than what was spent on building the app. It also includes amounts for the implementation, maintenance and other associated costs, and this is because Parliament asked us to look at all aspects of the ArriveCAN app. The shortcomings in the documentation and the weak controls made it very difficult to precisely attribute costs among these elements of ArriveCAN, but ultimately, any number that is provided, whether it's the CBSA's or ours, is an estimate, because of the poor record-keeping.

I'll stop there.

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

Okay. Let me understand that correctly.

On the approximately $19 million you attribute to GC Strategies, are you saying that there is room to interpret that as being a combination of ArriveCAN contracting and possibly other elements of contracting with the CBSA?

[Andrew Hayes]

Yes. In our report, we did state that it is possible that some amounts attributed to ArriveCAN were not for the application, and indeed, when the CBSA provided information to the government operations committee, there were some amounts in the records they produced there that we didn't consider to be for ArriveCAN, and there were amounts that we have considered to be for ArriveCAN that the CBSA disagrees with.

Ultimately, though, we were confident enough with our estimate to put it in a report to Parliament.

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

Were you confident enough to say that the estimate could have been actually higher than $19 million?

[Andrew Hayes]

It could have been higher and it could have been lower. I can't be precise. I mean, it is an estimate, after all.

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

Okay.

Notwithstanding the comments of both Firth and Anthony at the committee some several weeks after the release of the AG's report, did you hear directly from Firth or Anthony prior to their testimony?