Public Accounts Committee on Oct. 12th, 2023

[Karen Hogan]

Again, it would depend on whether or not we get co-operation from a department. If it's senior management that doesn't want to collaborate, we'd certainly mention that in our report. However, we usually receive incredible collaboration from all departments.

That said, I've been an auditor for almost thirty years. Over the course of my career, some individuals targeted for audit have failed to provide us with the required information, whether accidentally or intentionally. In such situations, it's what you do afterwards that's important, in my opinion: as an auditor, how should I approach the situation, and how should the individual approach it? We certainly see this from time to time in our audits.

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

If you think the person intended to hide certain facts or documents, will you pass this information on to the RCMP?

[Karen Hogan]

It is very difficult to know the real intention of an individual and I encourage the committee to ask the question of other witnesses.

If we believe there is a possibility of fraud or foul play, we will deem it necessary to refer this to the RCMP, and it will really be up to them to determine if a criminal act was committed.

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

I understand.

You've answered several questions I wanted to ask you, including when you'll be able to file your audit report.

We learned through the newspapers that the RCMP has opened an investigation into the ArriveCAN application. When you do an audit, do you ever collaborate with the RCMP by sharing information, or do you wait, as you mentioned, towards the end of your audit before sending them information? If you know that an RCMP investigation is already underway, do you forward information to them?

[Karen Hogan]

It is certainly our intention to contact the RCMP. In the newspapers, the RCMP has been very clear: it does not discuss ongoing investigations. So I don't expect them to share information with us, but we will share information with them if necessary.

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

Did you learn from the newspapers that the RCMP was conducting a parallel investigation into ArriveCAN?

[Karen Hogan]

Despite my team's presence on the premises of the agencies and department involved in the audit, Canada Border Services Agency management did not inform me that they had reported a problem to the RCMP. So I learned about it by reading the newspapers, too.

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

Do you know who reported the problem to the RCMP?

[Karen Hogan]

I believe it was the senior management of the agency.

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

Very well. That's fine. This is very useful information.

Mr. Chair, I believe I only have five seconds of speaking time left; I'll give them to Mr. Desjarlais.

Thank you, Madam Auditor General.

[The Chair, Conservative, John Williamson]

Thank you very much.

The next speaker is Mr. Brock.

You have the floor for five minutes, please.

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

Thank you, Chair, and good morning.

AG Hogan, thank you for your attendance today.

I want to start by following up on some of the questions that were put to you by several of my colleagues. I want to start by flushing out a little more narrative with—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

I'm sorry, Chair. On a point of order, is there a change in—

[The Chair, Conservative, John Williamson]

Pardon me. That is my mistake. Excuse me.

It wasn't Mr. Brock's turn, but rather that of Mr. Desjarlais, our friend from the NDP.

Mr. Desjarlais, I am very sorry, and I appreciate your point of order. You have the floor for six minutes.

It's over to you. Thank you for pointing that out quickly.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thanks, Chair.

Thanks to the Auditor General for being with us today.

I also want to join my colleagues in sending condolences to those many victims in Palestine and Israel right now who are terrified for their lives. I'm sure we'll be addressing this much more in Parliament next week.

Auditor General, I have a question about procedure and history. I hope you can indulge me to better understand. In some ways, you already gave reference to the fact that your office is independent and, because of that independence, it operates in a particular way in order to preserve its integrity.

Particularly when it comes to issues that are currently being studied, have you or has any other Auditor General, to your knowledge, ever been summoned to the public accounts committee in connection with an audit that you are currently conducting?

[Karen Hogan]

I choose to accept every invitation a committee provides to us because, as I said at the beginning, we are happy to talk about our work and we believe that every committee in the House and the Senate plays an important role in holding government to account and making our work meaningful.

This is the first time I am here talking about an audit that is under way. Unfortunately, I didn't do that bit of research to know whether any of my predecessors would have been here, but I would trust that we would all place the same importance on a committee having invited the office to come and talk about our work, and we would accept that invitation.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you for that.

The issue with the ArriveCAN procurement process is very serious. It's even more serious now that there is a criminal investigation aspect to this, which you've just confirmed you found out about in the same fashion that many Canadians did—through the newspaper.

The question I want to continue on is one that Ms. Sinclair-Desgagné mentioned.

In your regular duties and your regular auditing processes, if and when you suspect there is an aspect of criminality, you do in fact report that. Is that correct?

[Karen Hogan]

Absolutely.

As I mentioned, it depends on the degree of what we find. If we feel that it is so critical that we need to inform law enforcement immediately, we do so. Otherwise, we try to finish our work and have it all put together, then inform the RCMP if we believe we should refer the matter to them, and then table our report in the House.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

I know you won't be able to speak directly to any of the findings in your audit prior to its release, but what I would suspect.... Considering that we're now in a committee meeting talking about a study that is not yet published, we're really left to just hypothesize in many ways about the focus or central aspects of your study. I've mentioned this before, it's around the issue of outsourcing.

I think the issue of outsourcing is largely central to the fiasco we're seeing with ArriveCAN. The public service and even I have made mention of this in this committee before. I've mentioned huge contracts being doled out to folks like McKinsey. We've talked about that in this committee before, as you may recall, Ms. Hogan, as well as about organizations like Deloitte.

This is no secret to the federal government. This isn't just a Liberal problem. We've seen, for many decades, that it's also a Conservative one. The Conservatives, for many years, also engaged in aspects of outsourcing, very large contracts of outsourcing.

When it comes to things like outsourcing, I know you have touched on them in other audits, but having done your own review of outsourcing, are you, as the auditor, concerned about them?

[Karen Hogan]

We always look at contracting if it comes up in an audit. We typically also focus certain audits on contracting practices of the government. This audit is one of them, being an audit of the procurement of an IT system. We are also carrying out work in response to another motion from the House to look at professional services contracts, more specifically to look at some of the McKinsey contracts. We're in the process of doing that one as well.

I can tell you what our office does. We, at times, do outsource certain work. We are very selective about when we do that. We do it in order to add to our staff complement during our peak audit times, or we do it to acquire skills that we don't have on staff, that we don't believe we should have on staff 365 days a year. For example, we might contract out services for actuaries.

I do believe there are times when it makes sense to contract out services. That assessment, in my view, should be done when an organization decides whether to do it in house, hire the skills needed or outsource them. There are many factors that play into that, including timing, skill sets and capacity. Those are all aspects we will cover in the audit on professional services that will come out soon.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

When that audit is tabled, you said that will be prior to 2024. Is that correct? I think you mentioned that in your last response.

[Karen Hogan]

The ArriveCAN audit we intend to release in early 2024, once Parliament resumes. I think Parliament will come back at the end of January, so it will be sometime in the coming weeks or months after that.

[The Chair, Conservative, John Williamson]

Thank you very much. That is the time.

Mr. Brock, you are now up. I'm going to ask that you dispense with your intro.

You have the floor for four minutes and 45 seconds.

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

Thank you, Chair.

AG Hogan, I want to ask a clarifying question.

Based on what I've heard in your responses to my colleagues, are you saying that your office—you, in particular—found out that the RCMP is investigating the contracts under the $54-million ArriveCAN app not from the Government of Canada but from reading The Globe and Mail story?

[Karen Hogan]

Yes. Despite my staff being in there auditing all of the departments in this audit, management did not inform me that they had referred a contracting matter, which involved many common players we are looking at, to the RCMP.

The morning the newspaper article was released, senior management reached out to my office. My team has been in contact with them and in continual dialogue since then.