Public Accounts Committee on Feb. 12th, 2024

[Karen Hogan]

I think it was clear here that there were existing relationships between the public service and some of the vendors, and that the invitations that were received to attend events are likely more common in the private sector than they are in the public sector, but they exist. That's why there's a code of conduct, and the agency's code of conduct required that individuals notify their supervisor that they received these invitations. That's done in order to eliminate a real or perceived conflict of interest and to remove any bias that may have existed in the contracting.

We saw no evidence that individuals who had been invited had followed the code of conduct and reported to their supervisors. Perhaps it happened but there was nothing documented. It really raises the risk that there is a conflict of interest or bias in some of the procurement decisions that were done.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

I think if I have—

[The Chair, Conservative, John Williamson]

I tell you what—you give me this time and I'll give it to you if you go a little longer the next time. Thank you.

Turning to our next round, Mr. Genuis, I understand you're splitting your five-minute slot. The floor is yours.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Madam Auditor General, thank you. I am going to go quickly.

Your report found that the average daily pay rate for each contractor and consultant who worked on the arrive scam was $1,100 per day. That seems incredible to me. How did these costs compare to what would normally be paid for people working on this kind of project?

[Karen Hogan]

That's a difficult question to answer when we really just focused in on the resources who were working on ArriveCAN. That's where the average comes from.

As I answered to a previous question, I would have expected that the dependency on those external resources would have reduced over time, but I also would have expected that the requirement to always ask for resources with 10 years of experience or more would have been better documented or justified. A mix is likely a better combination, of lesser experience and 10 years or more, and that would have resulted in better value for money for taxpayers.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you. Your report identifies that the $1,100 per day is substantially more than people working inside the public service would receive.

Your report reveals shocking details about cozy relationships between the Trudeau government and the contractors at GC Strategies who got the ArriveCAN contract. This company was actually involved in the development of the rules and requirements for making proposals. This seems to me akin to having the coach of one of the teams making the rules and directing the referee, an effective rigging of the process.

Liberals didn't want this audit to happen at all, which is why they voted against it in the House of Commons. You found that rules were broken when contracting vendors offered gifts, hospitality and invitations that were not properly reported.

How many public servants received these kinds of gifts, hospitality and invitations from contractors, which were not properly documented or reported?

[Karen Hogan]

I'm sorry. I don't have exact figures in my hands, and I probably don't have an exhaustive list. We did see that it was more than one contractor who invited individuals in the branch that developed ArriveCAN, but we saw no documentation that any of those invitations that we saw through emails had been reported to supervisors. That's what is concerning. That would have helped the supervisor put in place measures to make sure that there weren't apparent or real conflicts of interest.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Roughly how many individuals were there, and also, could you provide the committee with a list of names of those who offered and those who received these kinds of invitations?

[Karen Hogan]

We can go back through our file and look at what we have to provide you, but it would be really just links to ArriveCAN. The agency might be able to provide you a more comprehensive list if you want to ask them when they're here.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you. If I understood right though, you are able to go through and provide what you have to the committee on that.

[Karen Hogan]

We'll have that, but it isn't in any way comprehensive. We'll see what we can provide you.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

I just have a final comment.

I think the reason that this is important is that it's clear from what we're hearing from the government that they are trying to use an internal investigation to pin this whole affair on one or two individuals. However, the investigator who is supposed to be undertaking their internal investigation is actually subject to the existing chain of command, so that process is just as rigged, just as susceptible to influence, as the original bid was.

With that, I'll end my time.

[The Chair, Conservative, John Williamson]

Thank you.

Ms. Kusie, you have the floor for two minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much.

We've established that this goes far beyond the existing criminal investigation and that there were existing relationships, as you indicated, Auditor General, that could have provided a bias or leaning toward serious contractors. My colleagues have established that there was no value for money for Canadians here. An app that was supposed to cost $80,000 ended up costing $60 million. We see $60 million spent and $12.2 million potentially unrelated, even, to this application. We see 18% of invoices by contractors who did not provide supporting documentation and even work being completed without security clearances.

Regarding the contracting, Auditor General, when we look at all of this—all of these discrepancies, this incompetence and possible malfeasance—who is fundamentally responsible for the contracting? Who has the final say on overseeing contracting for the ArriveCAN app?

[Karen Hogan]

I would back it up to say that fundamentally the deputy head, in this case the president of Canada Border Services Agency, is responsible for all decisions that are made within the department. With that being said, there are delegations of authority that go to other layers of the public service. I draw a difference between individuals who do the work and then individuals who oversee and make decisions. Those individuals are usually in management—director, DG and assistant deputy minister level. They set the tone for making sure that policies and basic requirements are followed.

We found a glaring disregard for that here. We could not find documented evidence as to who made the ultimate decision to choose a vendor or why that vendor was chosen, but we did see a contract requisition that was signed by an executive director in the department. In my view, when a public servant exercises their delegation of authority by signing something, that comes with a responsibility and accountability for that decision being made. If they feel that they've been pressured or didn't want to make the decision, they should have informed their supervisor or they should have documented. There are recourses that public servants can take if they feel they shouldn't be exercising the delegation of authority that's granted to them.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much. That is your time.

Ms. Khalid, you have the floor for five minutes.

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

Thank you very much, Chair.

Thank you, Auditor General, for the important work that you've done.

You've suggested that the value for money was not achieved. Did you also investigate the cost of using paper processing versus the cost of using ArriveCAN over time? I know that the CBSA website indicates that paper processing would have been almost $95 million versus the cost of the ArriveCAN app.

I'm looking for your thoughts on that.

[Karen Hogan]

We did conclude that the best value for money was not achieved here. There was some value. I'll point back to our report in 2021. We issued two reports looking at border measures. The second actually noted that, because of ArriveCAN, the government was able to improve the quality of information collected from travellers, and they were able to follow up with travellers in a more timely way. Now, there were still many travellers who weren't followed up with, but the app sped up the paper process that was originally there.

I would add that there is also an enduring value to this application, as CBSA has now springboarded off what was done here to automate the border, something they had been working on before the pandemic. They used this as a sort of springboard to go there. There is some sort of enduring value left, post its use during the pandemic.

We did look at what it might cost for a piece of paper versus automation. It really isn't a linear calculation. I think we probably would have landed at somewhere around $3 or so for a piece of paper, but again, I think it's more about the quality of the information and the timing. The paper was making its way to the Public Health Agency 28 days after an individual had crossed the border; that's really hard to follow up on a 14-day quarantine.

I don't think the value should be quantified. It should be in the fact that there was a more timely follow-up with travellers during the height of the pandemic.

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

In your report, you identify that the overlooking of it is based on efficiency and about the value and effectiveness of the app itself. Would you say that, between the paper-based and the automated, there was value there?

[Karen Hogan]

As I said, there was some value. I would tell you that the government was effective at delivering on this app. It was done very quickly—quicker than you would see most things. Was it efficient and did it provide good value for money? That's where I would tell you no. The government has paid too much for this app. The public service should do better, going forward, on projects like this.

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

You also outlined that one of your main concerns was about poor record-keeping practices. Are you concerned that there is widespread corruption that is ongoing?

[Karen Hogan]

I think the confusion that we saw with the record-keeping—and I will tell you that it's probably some of the worst record-keeping I have seen in a long time—was because there was no documentation outside of record-keeping.

When an individual receives an invoice and it's not clear what app a worker was working on or what IT project a worker was working on, it's very difficult to allocate it in your records to the best place. We saw journal entries where items were being moved around, and we needed to trace back through many steps in order to get to supporting documentation. At times, it was very clear that it was linked to ArriveCAN. At other times, it required judgment to know whether or not it was of such a general nature that it should be associated with ArriveCAN.

It is about making sure that the public servants have the information they need to make the right decisions. In this case, there was a disregard for some of those really basic elements that we traditionally see.

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

You are in communication with the CBSA president. Are you satisfied with the steps that have been taken so far to fix some of these practices that you have outlined?

[Karen Hogan]

We haven't really looked at the steps that the agency has taken since.

I do look at the fact that it's receiving many recommendations. There are recommendations from my report as well as recommendations from the ombud. I will tell you that they're aligned and complementary. The agency has a lot of work ahead of it to ensure what I would think are some of the most basic elements of project contract management and record-keeping, which need to be fixed.