Public Accounts Committee on Feb. 12th, 2024

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

I appreciate that.

One reason our committees have been engaged with this file and the CBSA has been doing an internal investigation—and one of the reasons it was submitted to the RCMP initially—was due to some of the concerns that were shared as well.

Have you had a discussion with Ms. O'Gorman or Michel Lafleur, who was in charge of the investigation and the integrity component of this?

[Karen Hogan]

Throughout the audit, I did have a few conversations with the president of the Canada Border Services Agency, as did my deputy auditor general. I have not talked with the investigator.

The team has seen the preliminary facts. I didn't want to compromise my impartiality by looking at something that was not yet complete, so I haven't had more fulsome conversations with the president.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

We're concerned about that integrity and that impartiality. We're trying to not obscure or obstruct the nature of his investigation, because he's going into something even more specific about the conduct of individuals as well. This is the issue that we're concerned about. We want to ensure that people didn't do work...or somehow got paid all this extra money for work not being done.

Did that come across in your investigations?

[Karen Hogan]

Many times when we looked at invoices, some of the most basic support was missing, such as an indication on the invoice as to what IT project the work related to. There were several IT projects under way at the Canada Border Services Agency at the time. When we don't have that information when we're looking at it after the fact, it's hard to know what project it related to. It's also hard for individuals who are trying to maintain accurate financial records to know where to charge that invoice.

Really, I think our biggest finding is that there was lack of documentation that should have been there and traditionally is there to support invoices, task authorizations or contracts.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

A TA comes into place and they have a determination that they want to do a contract. They have skills and so forth that they have identified, but suddenly things are moving around. Certainly that was the case here.

Is it uncommon for people then to be moved into other contracts and other opportunities?

I believe the ombudsman made reference to this quite a bit.

[Karen Hogan]

I would say that there are many reasons why sometimes the resources you list in a task authorization may not be available or may be asked to work on different projects, but there are mechanisms in the government to make sure that the work you expect to happen, whether it's a contract or a task authorization, is clear. Then, when the invoice comes in, you can validate that the government received the services that it contracted out and paid at the right rate.

A lot of that information was missing here. While you might switch a resource or ask them to do something else, it should be documented. Those are just basic expectations to demonstrate due diligence and prudent use of public funds.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

In your report and in your discussions with CBSA, there is some discrepancy in terms of the overall costs of ArriveCAN, because you can't reconcile what has taken place here. There is $16 million or so that they've identified as being other applications.

Did you see value for money in those contracts?

[Karen Hogan]

The agency raised concerns around about $12 million that was included in the $59 million, because it was, they felt at times, of a general nature or it wasn't clear that it related to ArriveCAN. I think that's exactly our main finding: Their records should be better to demonstrate that.

When we looked more specifically at that $12 million, we felt that about half of it was clearly linked to the ArriveCAN application. In fact, half of it had been provided to another parliamentary committee previously as expenses linked to ArriveCAN.

This just speaks to why it's important to document as you go. Make sure that the work is clear and that the evidence you have to support that the work took place is fulsome. Then, there are no questions when we come in and look to audit or raise questions around value for money.

[The Chair, Conservative, John Williamson]

Thank you very much.

The floor is now yours, Ms. Vignola.

You have the floor for six minutes.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you, Mr. Chair.

Ms. Hogan, like Mr. Hayes and Mr. Hannoush, I want to thank you for being with us.

Is it usual for a company to prepare the requirements that an agency, in this case the Canada Border Services Agency, includes in the final version of its request for proposals?

Is it common practice for a company to tell the Agency what it should do?

[Karen Hogan]

No, it is not.

We found that GC Strategies had been involved in the development of the requirements in a competitive contract. That should not have been done. It meant that the Canada Border Services Agency gave a potential supplier a competitive advantage. In fact, GC Strategies was the only company that responded to the solicitation.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Let's talk about precisely those very restrictive requirements, more specifically concerning the people's experience in human resources.

It says in your report that certain tasks required ten years of experience, but they were ultimately not performed by people who had that experience.

What kind of problems can that cause in terms of the quality of the work and the requirements, in particular?

[Karen Hogan]

We might expect that the requirements relating to the skills of the resources selected for a contract would be clear and exhaustive, either in the contract or in the job description.

We often found that these requirements were not clear, either in the job descriptions or in the contracts. As well, there was no supporting evidence to explain why the Agency had selected resources who had less than ten years of experience.

In my opinion, the problem that can arise in such a case is that the best possible value for the services performed or the price paid is not achieved. In fact, we then saw situations where that was the case.

I would therefore have expected that the government would question whether these resources really worked and ask itself why it had paid such a high price.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Essentially, if I understand correctly, when a contractor who does nothing but recruit resources, which is in fact what GC Strategies does, says that its resources cost $1,500 per day and takes a 30% cut for itself, there is much more incentive for it to recruit only higher level resources.

Does that sum up what we have to take from this? If it suggests only higher level resources, the total amount it receives is going to be higher.

[Karen Hogan]

In this case, it is the Canada Border Services Agency that asked for the resources selected to have at least ten years of experience. We wondered about the reasons for that request.

We would have expected that the resources needed for implementing the application would not all have the same number of years of experience, but there was no supporting evidence to explain why the Agency always required resources who had acquired at least ten years of experience.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Did the agency request that initially or did it do so in response to a suggestion by another company?

[Karen Hogan]

Once again, the supporting documents we would have expected to see in the files are so scarce that we are missing a lot of information about the interactions and discussions that took place between the Agency and the supplier.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

I find what I read in paragraph 1.64 of your report rather troubling. In fact, several paragraphs have that effect on me.

That paragraph says that no requirements were found in the non-competitive contracts that the resources' skills had to be demonstrated.

So I understand that the non-competitive contracts did not contain any requirement that the resources selected had to demonstrate their skills.

That paragraph also says that there was no evidence to demonstrate that the resources' skills met the requirements in the competitive contracts. So something was required and we do not know whether the resources selected have the skills to meet the requirements or they have been over-valued.

Have I understood correctly?

[Karen Hogan]

Yes.

When the contracts do not stipulate the skills required, no evaluation of the individual's skills is done.

That evaluation was not done when the non-competitive contracts were awarded. For the competitive contracts, we still found the requirement of ten years or more, with no explanation given. That comes down to important decisions made in respect of a contract not being documented in the Agency's files.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

To sum it up, they did it without really knowing why or how.

[Karen Hogan]

It was neither requested nor explained. No evaluation was done, since it was not a contract requirement. When it comes to procurement, the procedures are basic. We did not see them.

[The Chair, Conservative, John Williamson]

Thank you.

Mr. Desjarlais, you have the floor now for six minutes.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

I, too, want to thank you, Ms. Hogan, Auditor General of Canada, for your work and for tabling this report. I think it's important to mention that your reports and the work your office does are incredibly valuable to this institution. They ensure we have an opportunity to rebuild public trust.

Your facts here outline, I think, a very disturbing trend and reality that Canada will continue to be vulnerable to should we continue on this path absent the recommendations you made here, which I completely agree with. I noticed that the CBSA also agreed with all of them. However, at the end of my remarks, I hope to find ways to go further into that advice, see what systemic changes may be required—beyond some of the CBSA changes—and look, for example, at our public service and the work they could do.

You mention the deficits and the work these contractors did, which resulted in immense costs to Canadians. We don't deal particularly with the strength of our own public service. What I see here is an incredibly difficult and challenging truth facing Canadians: dealing with the terrible consequences of a bloated shadow public service. The consequences or results are invoices that are immense in terms of the duties they're being asked to do in relation to what they're invoicing. It's completely different. You mention that in regard to the 10-year requirement for some projects. There is a reality that much of the work didn't require 10 years of expertise in order to conduct some of what was being invoiced to the government, which created a larger and ever-expanding issue of cost.

I want to turn to the graph on page 7, “Exhibit 1.2—The Canada Border Services Agency continued to rely heavily on external resources to develop ArriveCAN from April 2020 to March 2023”. It makes an important note of the cost differential between the average per diem cost for equivalent IT work and.... You estimated that the cost for ArriveCAN external resources was $1,090, “whereas the average daily cost for equivalent IT positions in the Government of Canada was $675.”

In your opinion, would it have reduced the costs to Canadians had the public service been given the opportunity to do some of this work? Not all, perhaps.... I recognize the need, at times, for contracts. However, in this particular instance, do you think value for money was lost because the work the public service could have done was neglected?

[Karen Hogan]

I think, here, we were trying to highlight.... I want to be clear that it's not a very linear thing. It wasn't about using an external resource or an internal one. It was just demonstrating how continued reliance on external resources can start to hinder the value that taxpayers receive for money spent.

It was reasonable, in our view, at the start of the pandemic, to seek help outside of the public service. What I would have expected, however, as time went on, was dependency being reduced and a transition to internal resources, either to operate the application or to transfer knowledge.

Your question started off with this: What could we do, going forward, as a public service to improve things? I think having this worked into some of the contracts is a great place to start. Recognize that the public service might need to upskill, or that it might not have certain needed skills or skills that aren't needed every day. How do you transition some of that knowledge from the private sector to the public service so that, going forward, you can have options available that might be less costly and result in better value for money?

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you for that, Ms. Hogan.

I think there are two aspects that I want to focus on in my rounds to continue. One is the actual existence of the shadow public service, this network of contractors who seem to have preferential access to the CBSA in this instance. You have noted in your report that there were many instances where there were individuals who received gifts or invitations to events that would have otherwise enabled contact with these contractors. The lack of evidence that is documented suggests that they were influenced by these gifts or these events.

Would you say that's an immense concern that you also have?