Public Accounts Committee on April 4th, 2024

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

On that last point you made, you said they were well known among the community. How did they come to be well known among the community? Was it because of their nature as a subcontractor? Would people go to GC Strategies looking for work?

[Hartaj Nijjar]

They were well known with respect to doing work in that space. My answer wasn't directly with respect to them being sort of a prime for subcontracting work.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

I'm trying to understand, and I hope you can sympathize with Canadians who are trying to understand, this relationship. How is it that non-competitive contracts were awarded to three groups in particular that were known to each other and that you said were known amongst the community? I'm trying to understand why this network exists. Is it because of GC Strategies, as a conduit for subcontractors, because of their knowledge of subcontractors, that they could secure government contracts? Was that known to the community? Was that also well known?

[Hartaj Nijjar]

At the time, sir, KPMG were asked to subcontract with GC Strategies. As I mentioned earlier, we would have been more than happy to contract through the CEPS vehicle, and we would have—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

I'm sorry. Can you repeat that last part? Were you directed to work with GC Strategies?

[Hartaj Nijjar]

Yes. We were asked to work with GC Strategies. We would have been more than happy to—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Who directed you to work with GC Strategies?

[Hartaj Nijjar]

It was the CBSA.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

So the CBSA directed you to participate in a non-competitive contract.

[Hartaj Nijjar]

The CBSA asked us to submit a proposal to GC Strategies for the cybersecurity piece of work. We submitted a proposal. At the time, our assumption—again, being asked to submit a proposal—was that it was an ask that may have gone to others as well.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Did you or anyone in KPMG raise a concern about the use of a non-competitive contract for the purpose of this work, knowing that you're a firm of auditors?

[Hartaj Nijjar]

At the time, we were being asked to submit the proposal by the government. We assumed that the government was using vehicles that were authorized. Again, we were under the assumption that there may have been others also being asked to submit a proposal in a similar capacity. We were under the assumption that it was somewhat competitive.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

KPMG is a very large firm. You do work across the country and around the world. You spoke about your global network and the ability to second information very quickly. It makes sense that you could have raised the concern that you would be more competitive than GC Strategies, don't you think?

[Hartaj Nijjar]

KPMG does not know why the government chose the particular mode of contract that it did. At the time, all we knew was that the government had asked us about our capabilities for this piece of work, and it asked us to submit the proposal to GC Strategies. We did not also know the relationship that GC Strategies had with the government, or indeed what they were going to be charging the government for the piece of work that we ultimately performed.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Just to that point, and I appreciate the frankness of your answers, let's focus for a second on the value of the task authorization and the total contracts you mentioned for cybersecurity. The cybersecurity work that you mentioned in the previous question totalled $400,000. Is that correct?

[Hartaj Nijjar]

Yes. That is correct.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

However, when we look at the task authorizations submitted by GC Strategies, they totalled $540,000, invoices of which are...$40,000...we'd assume that $90,000 went to GC Strategies. Would you agree, or did KPMG take a share of that?

[Hartaj Nijjar]

KPMG is unaware of the figure that GC Strategies charged to the government. We do not have any line of sight or visibility into that at all.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

The Auditor General found “that the Public Health Agency of Canada awarded a professional [contract] task authorization using a non‑competitive approach to KPMG”. However, they 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”.

Can you confirm some of these details with us today? Do you or KPMG have any communication—emails or letters—about those contracts that could be supplied to our committee in regard to the initial communications for the work on the task authorization to KPMG?

[Lydia Lee]

With respect to the initial task authorization, as I said, we were direct-contracted through the CEPS vehicle that I mentioned earlier. For the subsequent contracts that were directly contracted through the Public Health Agency, we were under the impression that the Public Health Agency was providing documentation and justification to their contracting authority to provide the reasons for the direct award.

We don't have any email communications as such, that you're identifying, but we were under the impression that they had provided the documentation to their contracting authorities as required.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

You have no information about that, then.

[The Chair, Conservative, John Williamson]

Mr. Desjarlais, that is your time.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you, Chair.

[The Chair, Conservative, John Williamson]

I wanted to make sure that the witness had time for a fulsome answer, but you're over the time.

We're beginning our second round, which consists of six slots.

Mr. Brock, you have the first, please, for five minutes.

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

Thank you, Chair.

Thank you, witnesses, for your attendance today.

Since Justin Trudeau formed government, KPMG has been one of the leading recipients of government contracts, to the tune of almost a quarter of a billion dollars. Of that, we heard today that your work surrounding the ArriveCAN app and its implementation came to roughly $5 million.

I've listened very carefully to your evidence. I've heard references to the CBSA. I've heard references to Public Health. Were any other ministries involved?