Many Canadians are feeling a mixture of Schadenfreude and worry on reading the Auditor General’s (AG’s) damning report on the federal government’s ArriveCan app.
ArriveCan, readers will remember, was the pandemic era measure the Trudeau government implemented in 2020 to help keep track of the vaccination, testing and quarantine status of visitors to Canada and of Canadians returning from foreign trips.
The government aimed to provide an app travellers would load onto their phones or tablets, to facilitate the gathering and sharing of health and travel information deemed necessary during the dark days of COVID.
Instead of using the federal government’s ample in-house IT resources to design and implement this new app, the Canadian Border Services Agency (CBSA) decided to contract out the work.
The result, Canada’s Auditor-General (AG) has just reported, was a costly fiasco, woefully deficient in basic accountability safeguards.
The government used, in total, more than 30 contractors for the ArriveCan project.
The AG report lists, by name, the 11 companies which charged more than $1 million. The remaining 21 firms are lumped together as “others”.
The total bill, the AG estimates, was close to $60 million.
Of that sum, over $19 million went to a four-person Ottawa firm called GC Strategies. That company, founded less than a decade ago, is now the focus of intense scrutiny.
The Montreal newspaper La Presse reports that GC Strategies has received close to $258 million in federal government contracts since 2015.
What the tiny company has done for all that money is something of a mystery.
In the case of information technology services – software development and similar activities – GC Strategies does not appear to provide tangible, technical high-tech products. From what we can gather, its role has been to act as a sort of middleman. It identifies government IT requirements and then helps civil servants find other firms which are qualified to do the actual work.
No evidence of proposal from GC Strategies
In the case of ArriveCan, GC Strategies, in the Auditor-General’s words, “was involved in the development of the requirements that the Canada Border Services Agency ultimately included in the request for proposal.”
Auditor-General Karen Hogan slammed the manner in which the Border Services Agency awarded contracts to this company.
“We found that documentation was missing on the initial discussions and interactions between the Canada Border Services Agency and GC Strategies. These discussions led to the non-competitive process that resulted in GC Strategies obtaining the first ArriveCan contract, initially valued at $2.35 million in April 2020.”
Border Services told the AG’s investigators that GC Strategies “was awarded the contract on the basis of a proposal that it submitted.”
That assertion, Hogan and her colleagues tell us, appears to be false.
Although AG investigators found a proposal from another company (which did not get the contract), “there was no evidence that the agency considered a proposal or any similar document from GC Strategies for this non-competitive contract.”
The AG report adds that Border Services “did not support the selection of GC Strategies with a sound justification.”
The success of GC Strategies is a mystery journalists and political staffers in Ottawa are now trying to understand.
A puff piece from 2018 in the Ottawa Business Journal, a local newspaper founded by the current mayor of Ottawa, Mark Sutcliffe, gives us some insight into the modus operandi of GC Strategies.
The article describes three former colleagues in the IT consulting industry – Darren Anthony, Kristian Firth and Caleb White – “meeting up for beers”.
The three noticed that IT consulting firms in Ottawa were all too specialized and narrowly focused. Some might provide technical staff for projects; others might have specialized expertise in specific technical areas.
What clients, especially in government, wanted, though, was a more broad-based type of service. The three beer-drinking pals set out to provide just that, and they achieved almost unbelievable success in short order.
The Ottawa Business Journal reported in 2018 that the firm’s revenue had grown by 676 per cent in three years.
All of this success came from providing what we might call “soft services.” The small team at GC Strategies is not qualified to provide granular, technical, IT services and products. Their value-added, it seems, comes from their contacts and their networks.
Put differently, the story of GC Strategies is not one of what they know but who they know. And that “who” seems to include some key decision-makers who hold the purse strings in the public service.
A culture problem in the public service?
The AG’s critique of the ArriveCan project did not end with GC Strategies. The report found deficiencies in the awarding and management of contracts to other companies, including the multinational giant KPMG.
The overall impression the report gives is of public servants who lack the confidence and initiative to manage and oversee projects themselves, while contracting out specific and defined tasks.
There might be a cultural problem at play here. Is the public service too concerned with upholding its hierarchy and going along to get along, and does it stifle creativity and initiative?
That is a legitimate question the AG’s report raises.
The opposition parties quickly pounced on this report.
Conservatives immediately denounced “$60 million” of taxpayers’ money wasted, a critique very much in the party’s wheelhouse.
But Conservative leader Pierre Poilievre has continued to dine out on the controversy by focusing on the potentially criminal corruption in the ArriveCan process. He is calling for further RCMP investigations – in addition to the one the federal police force is currently conducting.
New Democrats have chosen to target the contracting-out syndrome, which they say afflicts both Liberals and Conservatives:
“This is the result of years of Conservatives and Liberals creating a system that allows wealthy consultants to procure government contracts and make millions in profits at the expense of our professional public service and Canadian taxpayers.”
But, as time goes on, the Conservatives appear to be gaining the most political advantage from this brewing scandal.And so, while some of us feel a grim Schadenfreude-ish satisfaction at richly-rewarded Ottawa insiders getting their comeuppance, we cannot help but feel some worry at seeing Pierre Poilievre get yet another chance to gloat.
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