Evidence of meeting #113 for Public Accounts in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cbsa.
A video is available from Parliament.
4:10 p.m.
Managing Partner, Markets & Industry, BDO Canada
Yes.
How I'll answer that is by saying that we don't always understand how organizations win contracts. We certainly see them published on the Open Government website. In that publication, we don't always see how large the organizations are. What we see is that they are qualified.
Most of us who operate in this will be able to look at the RFPs and see what the qualifications are, but we won't know and won't have access to the specifics of how they qualified.
4:10 p.m.
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
When you agreed to work with GC Strategies, did a partner at BDO meet with someone from GC Strategies?
4:10 p.m.
Managing Partner, Markets & Industry, BDO Canada
That's correct. There would have been a discussion. I'm just trying to do the timeline of when that discussion would have happened. The work for ArriveCAN was done in the spring of 2021. Our team would have received a call, and did receive a call, from GC Strategies as to whether or not we were interested in supporting a piece of work.
4:10 p.m.
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
You, personally, weren't in contact with GC Strategies, then. Was it someone on your team?
4:10 p.m.
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
Did that person discuss the people at GC Strategies with you? Did you do any preliminary research on the people who, at the end of the day, were being awarded the contract for the work you would be doing for the government?
We heard from KPMG executives last week. Generally speaking, firms like that really assess the risks before signing a contract. Did you do any such assessment at BDO?
4:10 p.m.
Managing Partner, Markets & Industry, BDO Canada
Yes. Our assessment of them as an organization certainly would have relied on the government contracting and the fact that they were a qualified vendor, and making sure they had the contract that they said they had. There's a certain amount of faith we would put into that when accepting the engagement. That was a key portion to our acceptance of that.
4:10 p.m.
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
You don't have a system, then, to check how big the company is, what services it provides or how it landed the contract, even though it had no services to speak of. It was awarded the contracts but didn't provide any services itself. It didn't have the capability you had.
4:10 p.m.
Managing Partner, Markets & Industry, BDO Canada
Our systems certainly would look at the size of the organization—in this case, from a risk perspective. The key question would have been if they held a valid contract and were a valid supplier to the Government of Canada. In this case they were.
4:10 p.m.
Conservative
The Chair Conservative John Williamson
Thank you.
Up next is Mr. Desjarlais. You have the floor for six minutes, please.
4:10 p.m.
NDP
Blake Desjarlais NDP Edmonton Griesbach, AB
Thank you very much, Mr. Chair.
I want to thank the witnesses for being present with us today on what is a terrible instance, I think, of a combination of issues, some being of oversight, accountability, particularly by CBSA.
I note that some of you have read the report. Hopefully, you have all read it. It suggests there was a lack of information and documentation provided to the Auditor General, but that, just within CBSA itself, there was an inability for them to second the documents for the Auditor General to review.
In some of the testimony made in response to some of my colleagues' questions, in particular, Microsoft, for example, responded with the fact that the numbers, the financial invoices, where the money went and how they were accounting for some of those services were different from what the Auditor General found. I wouldn't dispute the Auditor General's finding, because it's obvious that she put a number associated with this work.
However, I would judge—or try to judge, at least—where those invoices came from. It may be the fact that these invoices were billed through GC Strategies, particularly with the work that you've done, and they may have failed to report to the government the true cost.
Is that a potential in any of your minds?
4:15 p.m.
Chief Technology Officer, Microsoft Canada Inc.
There is no potential for Microsoft that this is the case.
4:15 p.m.
Managing Partner, Markets & Industry, BDO Canada
I can answer. We would not have had access to what was ultimately passed through. In our relationship with GC Strategies, we would have billed them as an organization. I certainly don't have the same set of data that the Auditor General had to be able to conclude....
4:15 p.m.
NDP
Blake Desjarlais NDP Edmonton Griesbach, AB
Just to the question of possibility, it would be possible.
4:15 p.m.
Managing Partner, Markets & Industry, BDO Canada
I think the Auditor General highlighted that it would be possible in the report, so I certainly am not in a position to argue with that.
4:15 p.m.
Director, Global Artificial Intelligence and Canada Public Policy, Amazon Web Services, Inc.
It's not possible in the case of GC Strategies. We have no relationship with them. We have very clear visibility on the work we did with Dalian on CBSA. With the contract I referenced earlier, most of that had nothing to do with ArriveCAN. Exactly $98,000 did have to do with the very initial work on ArriveCAN, which was prepandemic work.
4:15 p.m.
NDP
Blake Desjarlais NDP Edmonton Griesbach, AB
In relation to when you came into contact with Dalian and/or in other instances with GC Strategies, what was known of these two companies by your companies prior to engagement?
Can all companies respond, please?
4:15 p.m.
Chief Technology Officer, Microsoft Canada Inc.
Certainly. We have absolutely no relationship with GC Strategies. Dalian is registered as a reseller of our surface hardware devices. That's why we believe our icon is on their website. However, we don't have any record of doing business with them. We did do extensive research on that. We don't have a relationship, but we've made money there.
4:15 p.m.
Managing Partner, Markets & Industry, BDO Canada
I can speak for the GC Strategies component in BDO. We acquired Lixar in 2020. They had a relationship with Lixar in the past. A piece of work around ArriveCAN was tabled to us, asking us whether we would be interested in providing that service, specifically around our data scientists and around the optical reader component. That skill set is not necessarily easy to get. We were asked whether we would be interested, and we worked through that process to provide them with a proposal at the time.
4:15 p.m.
Director, Global Artificial Intelligence and Canada Public Policy, Amazon Web Services, Inc.
Some additional context around our engagement with Dalian is that this was before the cloud framework agreement existed. Prior to that time, the Government of Canada really did not have an ability to procure cloud services.
It is quite different from traditional IT procurement, which involves, quite often, the procurement of an actual tangible asset or hardware. In the case of procuring cloud or licensing software, they are very different ways of procuring technology.
We often work with very small companies and very large companies that may, for example, be building applications using the tools they find available to them on the cloud; and there are additional services, for example, that AWS does not provide. We don't provide staff augmentation services. We do have a number of customers that are looking for additional support beyond the advisory services we do provide, and there are a number of companies in Canada and around the world that provide those services.