Debates of June 12th, 2025

Opposition Motion—GC Strategies Inc.

[Kody Blois, Liberal, Parliamentary Secretary to the Prime Minister]

Mr. Speaker, the member listened to my speech. He heard very clearly that there is a judicial process and that the government is moving on legal action to recover the taxpayer dollars we agree need to be recovered.

The member suggests there are Liberal insiders. The member for Winnipeg North made the distinction that the elected members of the Privy Council, when they became aware of this, addressed and sought to address the issue. The problem is at the procurement level of civil servants, and when we listen to the Conservative speeches, they blend the two. It is absolutely problematic.

The member for Winnipeg North suggested and rightly highlighted that GC strategies received money under the Conservative government. Will the member stand up and suggest that they were Conservative insiders too, or will he recognize there is a difference between the civil service, the processes and the political elected representation who is taking action?

[Ned Kuruc, Conservative, Hamilton East—Stoney Creek, ON]

Mr. Speaker, the bottom line is that $64 million was awarded to two guys in a basement who did not do the work, and today we are here asking for the money back.

Government members can kick the can and can blame civil service. I listened for 16 minutes, and the member kicked the can and passed the buck to everybody but excused himself. The taxpayers want their $64 million money back.

I am an elected official and my voice is being heard here today on behalf of my citizens. They want their money back.

[Steven Bonk, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, today we have discussed that the Auditor General gave a scathing report on GC Strategies. In question period, we heard, I believe, 15 or 16 direct questions about whether the Liberal government would get our money back. There was not a single answer to that question. It is a very simple yes-or-no question.

I am wondering if my colleague could address why he thinks the Liberals are so scared to get our money back.

[Ned Kuruc, Conservative, Hamilton East—Stoney Creek, ON]

Mr. Speaker, the so-called new government can turn over a new leaf by getting the $64 million back. It is very simple. They should get the $64 million back. They need to stop kicking the can around and blaming everybody but themselves. It is simple—

[Some hon. members]

Oh, oh!

[The Assistant Deputy Speaker, John Nater]

Order. The time has expired.

Resuming debate, the hon. member for St. Albert—Sturgeon River.

[Michael Cooper, Conservative, St. Albert—Sturgeon River, AB]

Mr. Speaker, I rise to speak to our Conservative motion calling on the Liberal government to get taxpayers their money back in the face of the latest chapter in the ArriveCAN, better known as arrive scam, saga. Arrive scam is emblematic of widespread corruption, mismanagement, abuse and incompetence that defines 10 years of the Liberals.

Arrive scam involves an app that did not work. It was supposed to cost $80,000. It turns out it cost taxpayers $60 million, 750 times greater than the initial projected cost, all, again, for an app that did not work. There is well-documented evidence that throughout the development of the app, there was widespread misconduct and mismanagement across multiple government departments and agencies. For example, the Auditor General found that there was a glaring disregard for basic management and contracting practices. So bad were things, that the Auditor General indicated she had never seen poorer record-keeping in all of her years undertaking audits.

As bad as that is, arguably what is worse is what the procurement ombudsman found: that 76% of contractors involved in arrive scam did no work; no work was done, but yet money went out the door. At the centre of arrive scam is the now infamous firm GC Strategies, the largest contractor. GC Strategies is a two-person basement firm that did no work, that offered no services, that has no expertise, and yet walked away like a bandit with $20 million of taxpayer money. The only thing GC Strategies is capable of is bidding for government contracts, getting the contracts, fleecing the taxpayer with 15% and 30% commissions and then subcontracting out the work.

It is a firm that is under RCMP investigation, as we speak, for fraud in relation to contracts with the Government of Canada. As alarming and outrageous as it is, GC Strategies walked away with $20 million in taxpayer money for arrive scam. We learned on Tuesday that this only scratches the surface, because on Tuesday, the Auditor General issued another report, another audit, with respect to contracts involving GC Strategies and the Government of Canada. What the Auditor General found was that GC Strategies received millions more taxpayer dollars for no work.

Let us look at some of the particulars of the findings of the Auditor General. The Auditor General went back to 2015, basically when the Liberal government came to office. That is when GC Strategies started getting contracts, 106 in total, the value of which was $94.7 million, and $64.5 million was ultimately paid out. The Auditor General put aside the four arrive scam contracts because they had already been audited, and she looked at the 102 remaining contracts. She took a sample of 35 of those contracts across 21 federal departments and organizations, and what she found was that of the 35 sampled non-arrive scam contracts, 46% involved contracts in which there was no proof of work.

The Auditor General's findings in respect of these contracts was that there was “little to no evidence...that deliverables were received", so there we have arrive scam 2.0: no controls, no oversight, and millions upon millions of hard-earned taxpayer dollars improperly going out the door under the watch of the Liberals, and they have the audacity today to stand in this place and wash their hands clean of any responsibility. It is an absolute disgrace.

There is no doubt that is the most damning aspect of the Auditor General's findings; what could be worse than getting paid and doing no work, to the tune of millions of dollars? However, I do want to note that there were other damning findings in the report. One example is the total absence or near total absence of oversight when it comes to seeing value for money with respect to at least non-competitive contracts, of which millions went out the door to GC Strategies, based upon the sample.

With respect to those non-competitive contracts, the Auditor General found that, in 95% of the cases, government departments could not establish evidence of value for money. In fully 82% of the contracts, departments could not provide any evidence that fees charged did not exceed market rates. In 13% of the contracts, there was evidence, but guess what the evidence was. It was an attestation from the supplier, GC Strategies.

Here we have GC Strategies getting paid millions of dollars, being awarded contracts, and when it comes to value for money, government departments took GC Strategies at its word that it was providing services at or below market rates. One cannot make this stuff up, but it is par for the course after 10 years of the Liberals' overseeing procurement and government contracting.

Then there was the finding of the Auditor General that, in 33% of the contracts, departments could not demonstrate that contract resources had experience or qualifications to complete the work. I guess it is not a surprise, though, given that everything involving GC Strategies involves no work, with $20 million for arrive scam and millions more on the non-arrive scam contracts.

It would be comforting if one were to say, “Well, as bad as this is, it's an isolated incident”, but of course that is not the case. After all, the audit involves 35 contracts across 21 departments and federal organizations, so it cannot be said that it was one department or a handful of rogue bureaucrats. We have also seen other instances of this type of abuse involving other contractors under the Liberal government's watch, such as McKinsey.

However, putting that aside, members do not have to take my word for it in terms of the degree to which this is a systematic problem; they can take the word of the Auditor General, who said in the media, “I have no reason to believe that the lack of following the rules is linked to a specific vendor. This is really about the public service”. It is really about a systematic problem within the Liberal government, after 10 years. It is a damning indictment by the Auditor General.

In the face of that, now that we have the Auditor General's report, now that we have learned the extent of the abuse of taxpayer dollars, taxpayers deserve their money back, and they deserve their money back now. That is why we have put forward the motion: so that the House can order the government to immediately commence proceedings to do just that, to get taxpayers their money back and to make taxpayers whole again in the face of this outrageous abuse, this outrageous corruption, all under the government's watch.

[Kody Blois, Liberal, Parliamentary Secretary to the Prime Minister]

Mr. Speaker, it is unfortunate for the people who are sitting in the public gallery or who may be watching at home, because the opposition clearly has not delineated the facts on a few things, and one is that there is a process. The motion before us talks about 100 days. My question to the hon. member is this: Does he suggest that there should not be a court process, that if GC Strategies or its associates choose to defend the allegations in court that the government should just find a way to railroad that process?

The government is actually under a process to recover the money. It is following the Auditor General's steps the entire way. The situation was rooted in the federal public service. It was a problematic procurement. The government is taking accountability, it is taking actions, and it is seeking to recover the taxpayers' dollars.

However, when the Conservatives were in government, they awarded contracts to GC Strategies. I hope that the member will make the distinction that this was rooted at the federal core and that we are getting the money back for Canadian citizens, but maybe not in 100 days, because there is due process in this country.

[Michael Cooper, Conservative, St. Albert—Sturgeon River, AB]

Mr. Speaker, to say that this was “a problematic procurement” is the understatement of the year. We are talking about 76% of contractors who got paid but did no work. The House, 16 months ago, ordered the government to recover all of the stolen money, not just from GC Strategies but also from the other contractors. It is now 16 months later, and I would challenge the member to prove me otherwise, but I believe that not a single cent has been recovered. With respect to proceedings that have been commenced, I would ask the hon. member or a member across the way to cite where the action has been filed, for what amount, and who are the parties who are named.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry—Soulanges—Huntingdon, QC]

Mr. Speaker, I listened carefully to my colleague's speech.

In his opinion, did the previous government, like the current one, make every effort to recover the amounts that were wrongfully billed to it and, by extension, to taxpayers? Does my colleague believe that the government is doing everything necessary to identify the public service officials who failed to exercise vigilance and diligence in overseeing these contracts?

Does he think that more needs to be done? Can he explain this to us?

[Michael Cooper, Conservative, St. Albert—Sturgeon River, AB]

Mr. Speaker, the short answer is no. I do not believe that we see evidence of accountability for those who engaged in wrongdoing. While it is important to see that those responsible for shovelling money out the door without seeing proof of work are fired, there also has to be responsibility on the part of ministers under whose watch tens of millions of dollars went out the door to GC Strategies and other contractors without proof of work. Thus far, the only response from the Liberals is that they are not responsible and that there is nothing to see here. There is plenty to see, and it is pretty ugly.

[Steven Bonk, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, today, we heard from the Auditor General's report that there was massive abuse with GC Strategies' getting paid for work that they never did. I know that my hon. colleague has a strong legal background. What is it called when people submit an invoice and get paid for work that they never did?

[Michael Cooper, Conservative, St. Albert—Sturgeon River, AB]

Mr. Speaker, when someone submits a receipt and gets paid for work that they did not do, which is exactly what GC Strategies did, it is called fraud. That is what happened under the government's watch: $20 million for the arrive scam and millions more on non-arrive scam contracts. It is scandalous. It is criminal.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I am wondering whether the member could just provide his thoughts. Does he believe in a due process that would allow the courts and the civil service to do their job?

[Michael Cooper, Conservative, St. Albert—Sturgeon River, AB]

Mr. Speaker, we have seen no meaningful action taken on the part of the Liberals to get the money back. All we have seen, in fact, is the government's thumbing its nose at the will of the House of Commons, which ordered the government to recover all of the millions of dollars.

As far as any proceedings go, no member on the other side of the aisle can cite the lawsuit, the amount sought and the parties named when—

[Some hon. members]

Oh, oh!

[The Assistant Deputy Speaker, John Nater]

Order.

Resuming debate, the hon. parliamentary secretary to the Minister of Intergovernmental Affairs.

[Tim Louis, Liberal, Parliamentary Secretary to the President of the King’s Privy Council for Canada and Minister responsible for Canada-U.S. Trade]

Mr. Speaker, it is always an honour to rise on behalf of the people of Kitchener—Conestoga. I will be sharing my time with the hon. member for Bourassa.

For any government, there is perhaps no more central responsibility than the duty to spend taxpayer dollars with transparency and a clear commitment to achieving value for money. Canadians work hard to earn a living, and part of those earnings comes to Parliament, where through debate, consultation and consensus, we decide how that money should be spent. It is a critical task, and one that no government should take lightly.

One of the many things that governments budget for is professional services. The decision to acquire professional services through contracting is made by departments based on requirements and deliverables needed to execute their mandates. This may include specialized skills and expertise, which are sought through procurements. Contracting for services has long been a regular part of how government operates, and professional services as a percentage of total government expenditures have not grown. This practice is typically followed to provide additional support to federal employees working on important projects and programs.

In the Auditor General's report, the most recent study of professional service contracts with GC Strategies Inc., the Auditor General of Canada highlighted gaps in documentation and other necessary controls. Her assessment, in general terms, is that while Canada's system for the procurement of professional services has ample and suitable guidelines in place, those rules only work when they are followed.

The government fully accepts the findings of the Auditor General in this report, and I thank her for doing that work, as it was done following prior audits on the same issues. I can report to the House that several measures have been put in place over the last 18 months to address the underlying causes that allowed this particular situation to occur, so I will talk about the action that we have already taken.

Public Services and Procurement Canada, or PSPC as I will call it, is a department that oversees procurement in conjunction with client departments and agencies. PSPC has addressed the recommendations raised in audit reports in an effort to strengthen procurement. It has improved evaluation requirements to ensure that resources are appropriately qualified, and it has increased transparency requirements from suppliers around their pricing and their use of subcontractors.

It has improved documentation when awarding contracts and issuing task authorizations, and it has clarified work requirements and activities, including the requirement to specify which initiatives and projects are being worked on by contractors. It is increasing its use of solution-based procurement approaches rather than time- and task-based approaches. It is also streamlining, simplifying and digitizing existing mandatory procurement instruments, as well as requiring additional approvals for the use of mandatory procurement instruments.

Perhaps most importantly, PSPC is raising awareness of procurement risks and activities across federal departments and agencies. This is an issue that can affect any department, big or small, across Canada. It is vital that public servants involved in the procurement process are aware of their responsibilities and are all making informed decisions in accordance with the established rules.

As a control measure, PSPC plays an important challenge function in situations where a client department decides to pursue a non-competitive procurement process. In those situations, PSPC suggests alternative procurement approaches to client departments when it believes that non-competitive procurement is not the optimal option.

As such, in November 2023, following the re-evaluation of the improper contract negotiations with GC Strategies, PSPC wrote to the government departments and agencies to inform them that it would be replacing all master-level user arrangements with client departments, agencies and Crown corporations. These arrangements set out conditions for access to select professional services methods of supply maintained by PSPC.

As part of this process, PSPC and client departments have established new arrangements, which stipulate the use of new contract provisions to increase costing and subcontractor transparency. These new arrangements were circulated to the departments at the end of January, on January 31, 2024, and they are now in force.

The more recent measure, having just come into force this month, is the implementation of part 18 of the Budget Implementation Act, which gives the Minister of Government Transformation, Public Works and Procurement exclusive authority over federal procurement. It is not an end to delegation; on the contrary, departments and agencies will continue to exercise the authority to conduct their own procurements.

However, the Minister of Government Transformation, Public Works and Procurement can now revoke a department's or agency's delegation if there is reason to believe the procurement rules are not being followed. More broadly, as circumstances dictate, the minister can mandate standard procurement processes across all federal departments and agencies.

To conclude, I would like to note that GC Strategies has been determined to be ineligible under PSPC's ineligibility and suspension policy. It will not see a dime of taxpayer monies for the next seven years. This company is responsible for what has happened, and we are pursuing GC Strategies in court. Nevertheless, we cannot ignore systemic issues inside government that permitted wrongdoing, however unintentional.

The Auditor General has made her recommendations on the necessary course of action, and PSPC has, over the past year and a half, taken many steps to strengthen the oversight on all professional services and contracts falling under PSPC's authority. This government will never tolerate misconduct from suppliers or their contractors. GC Strategies has been banned, its security clearance has been revoked, legal action has been taken, and we referred the case to the RCMP. We are also strengthening procurement oversight and accountability across departments.

I believe it is time. Canadians have sent us here to get work done. I look forward to questions and to working together.

[Jeremy Patzer, Conservative, Swift Current—Grasslands—Kindersley, SK]

Mr. Speaker, I think part of the issue that we are seeing with the debate today, with Liberal members giving their speeches, is that there seems to be a bit of a refusal to acknowledge that a pattern has existed with scandal within government.

We know Justin Trudeau had multiple ethics reports with his name on them. The minister from Beauséjour has a couple; he made headlines a few times for some very notable slip-ups and conflicts. We have the former minister of international trade. She had some shortcomings on the ethics side.

There are many instances. It is not like the government failures were just one little problem here. There seems to be a constant lack of accountability. We see ministers, even members of the Liberal Party, get up and say they cannot blame the minister. Well, no, ministerial accountability is an important piece.

Would the member not agree that if ministers were actually accountable for their departments, a lot of this would not have happened?

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Mr. Speaker, we have talked about strengthening accountability, and I think that is what is happening. Government should be in a role of constant improvement, and strengthening accountability is something that we are doing. We are strengthening the oversight, which has already happened, and we are clarifying responsibilities, which is a big part of that, by taking legal action against GC Strategies, going after the money it has, revoking its security clearance and also referring the case to the RCMP.

I know more work needs to be done, but I believe we are taking those necessary steps, and we will continue to do so.

[Andréanne Larouche, Bloc, Shefford, QC]

Mr. Speaker, as I listen to the back and forth today, it feels like I caught my daughter with her hands in the cookie jar and I am hearing her trying to make excuses for emptying it. It feels like that is what the government is doing right now. They are trying to clear their conscience while those who were in the former government are still here.

I will pick up on the question that my Conservative colleague asked about a disturbing trend. I replaced one of my colleagues on the Standing Committee on Government Operations and Estimates a year or two ago. At the committee, I asked questions about the government's increasing use of outside consultants, because the media had published a figure about it. Using outside consultants costs more and is subject to fewer rules, less oversight and less accountability.

When I asked my question, the government responded that the reason was a lack of expertise in the public service. I would like my colleague to explain this lack of vision to me. Why were outside consultants being used with the excuse given that there was a lack of expertise—

[The Assistant Deputy Speaker, John Nater]

I must interrupt the hon. member because I must give the parliamentary secretary time to answer the question.

The hon. parliamentary secretary.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Mr. Speaker, the member is passionate and very knowledgeable about this subject. She mentioned the OGGO committee. I have never had the privilege to sit on that committee. The committees are important. They are part of the oversight for government, and they play an integral part. We need to continue to work together, whether it is in this chamber or in committee.

I also want to thank the Auditor General, because when Auditor Generals do those reports and give recommendations, it does hold us accountable as government. If there are improvements to be made, we will continue to make them.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, April 28 was election day. I cannot recall one individual in the entire constituency of Winnipeg North who actually raised this issue that the Conservatives want to spend an entire day debating. We have been talking about what I believe our voters were telling us. They want us to deal with the issues of Donald Trump, tariffs and trade.

Constituents are pleased to see that the Prime Minister has actually met with the premiers, building one Canadian economy. This is what I was hearing at the door. Contrast that to Pierre Poilievre and what the Conservatives want us to debate today. Could the hon. member provide his thoughts on the Conservatives not having their priorities right?

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Mr. Speaker, my colleague is right; Canadians sent us here to address affordability issues and to make life better for Canadians.

We have legislation before us that, if we work together, we can pass quickly. That would help 22 million Canadians with a tax cut, and it would help with the GST rebate. I look forward to working across the aisle as fast as possible to make sure that we can do what Canadians sent us here to do.