Public Accounts Committee on April 3rd, 2024

[Andrew Hayes]

Prior to their testimony.... We received a letter from them before we tabled our report—

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

Did they supply you with any additional documentation to verify their numbers, which were actually closer to $11 million?

[Andrew Hayes]

As I said, we received the letter. We built our estimate on the basis of the documentation and the financial system at the CBSA, among other evidence that we—

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

Did they offer to supply you documentation in their possession that established the $11-million figure according to their records?

[Andrew Hayes]

In their letter, they did offer to provide us information if we required it. However, as I said, our estimate was based on not just what semantically some contractors are suggesting was the build for ArriveCAN; it was for the entire picture of ArriveCAN.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Brock. That is your time.

Next up is Ms. Khalid, who is joining us virtually.

You have the floor, please.

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

Thank you very much, Chair.

Thank you to the witnesses for appearing today.

Mr. Moor, you talked in your opening remarks about lessons learned. Well, those lessons have cost taxpayers millions of dollars. It includes the behaviour of bureaucrats and Conservative insiders like David Yeo from Dalian. Perhaps we can take a step back and try to understand what exactly happened here and how we can make sure that the public service is accountable to Canadians with this very important issue.

Can you please help explain to us the function...or what the comptrollership branch at the Canada Border Services Agency really does?

[Jonathan Moor]

I'm very happy to explain. I was not personally responsible for ArriveCAN, but as a member of the CBSA's executive committee, I am accountable for the failures. We have already taken note of those failures and we have already started to deal with them.

In terms of ArriveCAN, it was managed by the border task force. Actually, the comptrollership branch was mainly focused on managing the internal task force during the COVID pandemic. These were very, very difficult times. People were crossing the border to return back to Canada, and we were told that we could catch COVID from touching documents. Our number one priority initially, working with PHAC, was to get the e-form up and running. That cost about $80,000. The comptrollership branch involvement in this one was really around making sure we had the funding available for that.

We recognize the comments made by the Auditor General. In year one, we did not have an accounting code, so we were not identifying the ArriveCAN cost separately. That is one of the reasons we have different cost estimates included in the numbers. In fact, that is also recognized in the OAG report itself, in paragraph 1.24. It identifies that $53 million was the estimate for the OAG for the public health component, with a further $6.2 million included for the customs and immigration declaration. We recognize that in year one we did not have the information available to us, so those were estimates in both cases.

That was our primary role in terms of the first year. We were looking after the finances, but we were also working extensively on the internal task force.

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

Thank you. I appreciate that.

Now, you said that you were not personally involved in the development of the ArriveCAN app, but perhaps you can provide us with a high-level overview of what kinds of lessons or topics are covered in the mandatory retraining of staff at the CBSA as part of your response to the Auditor General's report.

[Jonathan Moor]

The first thing I would say is that we have to look at the two or three lines of defence.

The first line of defence is based within the information, science and technology branch. It was responsible for the ArriveCAN app, for the development and operation of that application. We have over 1,600 delegated financial officers within the agency, and about 900 of those are based at headquarters. Quite a large number of those individuals are based in the border technologies innovation directorate, which was directly responsible for the development of the app and also for the contracting functions, working with PSPC.

What we were doing there was looking at the failures of the first line of defence. We have no doubt that there were failures in the first line of defence in terms of governance, oversight and record-keeping, and all of those things are lessons we have learned. They're also, potentially, subject to investigation to look at whether there was any wrongdoing in some of those failures. We recognize that there were failures, but we're not entirely sure of the exact reasons for those failures—whether they were from the stress of the pandemic or whether there was any wrongdoing included with that. We should wait for the investigations to conclude on that matter.

The second line of defence is where the comptrollership branch is involved. Every year, we take a sample of about 5,000 non-pay transactions to see if they are being properly processed. On average, we find about 9% to 10% have errors. That is not satisfactory to us; our target is less than 5%. We were very disappointed to see the Auditor General's report, which identified that 18% have those errors. We are looking into the reasons for that, and one of those reasons is that there wasn't a separate cost centre code. There was an administrative error in that the individual invoices were not being coded to the right account because we didn't have a separate code.

Those were really the basic functions of the first and second lines of defence.

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

Thank you, Mr. Moor.

Mr. Hayes, with all of this coming to light, are there any lessons learned here with respect to contracting within your own office?

[Andrew Hayes]

We take the contracting responsibilities at our office very seriously and we are rigorous with our contracting. What we have learned from this audit and have implemented in our office is more awareness around conflict of interest declarations.

I would also say that we're increasing the awareness of all of our managers of the importance of making sure that documentation is kept in a very accurate way.

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

You've taken concrete steps going forward with respect to conflict of interest in your office.

[Andrew Hayes]

Yes, we have.

Indeed, we always have an annual process for conflict of interest declarations. We have increased some of that awareness work by sending out reminders to our staff and by raising with staff the fact that the clerk has issued a report on values and ethics in the public service. There is also training available for our staff that we always encourage.

[The Chair, Conservative, John Williamson]

Thank you very much.

I now turn the floor over to Ms. Sinclair‑Desgagné for six minutes.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Thank you, Mr. Chair.

I would also like to ask Mr. Moor some questions, to start with.

Mr. Moor, you're the vice-president of the Comptrollership Branch. You've had that title since 2018. So you were responsible for financial oversight at the Canada Border Services Agency when all these events took place between 2020 and 2021, including the awarding of contracts.

Do you feel that you did your job properly or that you simply did your job?

[Jonathan Moor]

Thank you very much for your question.

I believe I did my job well during the pandemic. It was a very difficult period in time. I was appointed in January 2018, so I was there for the entirety of the pandemic.

It was a very challenging time for the agency as a whole, as I have said previously. I was responsible for the internal task force, which was primarily based on our employees: making sure they had PPE available to them and making sure that we were managing the work-from-home directive and managing all of the internal functions of the agency.

I was not directly responsible for the border task force. However, I did have oversight in terms of the finances, as I said before. I was responsible for ensuring that we had sufficient funding to manage the border task force activities, and I was also responsible for the second line of defence, as I previously described.

I'm very proud of what we did during the pandemic. I know that we made mistakes and I know that we've learned lessons from those mistakes. They were mistakes in the context of an operational crisis for us, with people coming across the border where we had to manage difficult situations.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Mr. Moor, every country in the world went through this crisis. Few paid $60 million for an app like ArriveCAN.

In some self-respecting countries, there is financial oversight, especially in large organizations comparable to the Canada Border Services Agency. Those in charge of that oversight do their job to prevent employees from going to events with companies and keep contracts from being awarded non-competitively to companies with two people. That kind of oversight exists in a lot of places.

You mentioned that you had a supervisory role in this. I believe that someone who has a supervisory role has a duty of responsibility and an obligation to be accountable. You have to be accountable to taxpayers, who paid far too much for an app.

In fact, you signed a letter sent in the spring of 2020, which argued that GC Strategies absolutely had to obtain a contract for a three-year term, and requesting that the emergency exception be applied. There's already a problem there. If it's urgent, we're not going to allocate millions of dollars over three years. Instead, we'll wait and see what happens. If ever there's an emergency and a contract has to be awarded, we may proceed quickly, but it will be a contract for a small dollar amount.

How is it that a person in charge of oversight can send a letter asking for an emergency exemption to be applied, when Mr. Utano's advice was to award a multi-million dollar contract for three years, which was much higher than the cost of the app in the first place? How do you justify this letter sent in May 2020?

[Jonathan Moor]

There were a number of different questions in there.

We do not have details about other countries, but we do understand there were also significant costs involved in managing travellers across borders in other countries, in particular in the Border Five and the European Union.

I want to come back to the national security exemption letter.

I recognize that I did sign that in June of 2020. That was at the request of PSPC, to allow them to put in place the second contract with GC Strategies. They had already done the first contract with GC Strategies, I think in March, and they needed to do a second contract. As I referenced at the OGGO committee last week, we identified a supplier that had successfully implemented a modern tool for risk assessment. As I identified last week, that was a company called Lixar.

What I have learned since last week is that Lixar was actually working in a strategic partnership with GC Strategies, so I accept that the testimony of the PSPC deputy minister was correct in that this letter directly led to the second contract with GC Strategies. That is what the national security letter was used for. Only one contract was let under that national security exemption letter; the others were let under the PHAC-originated national security exemption letter.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

However, in a letter that was provided to the committee, you insist that GC Strategies be the company chosen under the exception. You insist that GC Strategies be the company that receives millions of dollars. Okay, that was for the second contract.

Do you remember the value of that contract? Do you have that information at hand? What was the value of the second contract awarded to GC Strategies?

[Jonathan Moor]

I do, but I would also like to say that I did not in that letter insist on GC Strategies. That was a decision made by the board of technologies and innovation directorate. I was not aware of their name, and actually the letter does not mention the name of an individual company.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

No, but you mentioned that, for security purposes, a contract had to be awarded quickly. That was for the second contract with GC Strategies. You've just confirmed that.

[Jonathan Moor]

I agree. In total, three contracts were issued by PSPC, all through a sole-source agreement under the cover of the national security exemption.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Exactly.

[Jonathan Moor]

The second one was issued with an initial value of $4.4 million. The total expenditures after contract amendments amounted to $11.1 million.