The final cost of the controversial ArriveCan app is impossible to determine due to poor financial record-keeping, a new auditor general report has found.
It is just one of the findings that Canada’s Auditor General Karen Hogan highlighted in a damning report about the pandemic-era tool.
Overall, Hogan found that the Canada Border Services Agency (CBSA), the Public Health Agency of Canada (PHAC) and Public Services and Procurement Canada “repeatedly failed to follow good management practices in the contracting, development and implementation of the ArriveCan application.”
“This is probably the first example that I’ve seen such a glaring disregard for some of the most basic and fundamental policies and rules,” Hogan told the House public accounts committee on Monday.
Hogan said she found “omissions everywhere” in the financial record-keeping.
“I have to say I am deeply concerned by what this audit didn’t find,” she told MPs on the committee.
“We didn’t find records to accurately show how much was spent on what, who did the work, or how and why contracting decisions were made — and that paper trail should have existed.”
WATCH | ‘We paid too much,’ for ArriveCan, says auditor general:
Total cost of ArriveCan ‘impossible to determine,’ auditor general finds
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Duration 2:35
A new auditor general report has found the final cost of the controversial ArriveCan app is ‘impossible to determine’ due to what it says is poor financial record-keeping.
CBSA said previously the development and operation of the app cost an estimated $54 million.
Hogan estimates the project cost was $59.5 million — but, as the report notes, she was only able to arrive at that figure based on the information available to her.
“We found that financial records were not well-maintained by the Canada Border Services Agency. We were unable to determine a precise cost for the ArriveCan application because of [the agency’s] poor documentation and weak controls,” the report says.
Poor record-keeping makes it impossible to know exactly how much the ArriveCan app cost, says a report by Canada’s auditor general. (Giordano Ciampini/The Canadian Press)
The report says that 18 per cent of invoices submitted by outside contractors that worked on the app didn’t have “sufficient supporting documentation” to accurately determine the cost of the project.
Hogan told the committee that the government “paid too much” for the project and that poor record-keeping compromised accountability.
The report also notes that the CBSA has estimated that $12.2 million of the $59.5 million estimate could have been unrelated to ArriveCan.
Hogan said she was unable to determine what was included in spending on the app and what wasn’t. She said that the actual cost of the app could be higher or lower than the $59.5 million estimate.
“There could be amounts there that should not be linked to ArriveCan, but there also could be amounts that are linked to ArriveCan that were not flagged in the books,” she said.
Government relied heavily on outside contractors
CBSA depended heavily on third-party contractors to develop the app. The report cites that reliance as a major factor in its ballooning costs.
Hogan’s report suggests that a reduction in the use of outside contractors could have lowered costs and “enhanced value for money.”
As an example, the report estimates that the per diem costs for external ArriveCan contractors was $1,090, while the average daily cost of an equivalent internal position is $675.
The CBSA said in a statement Monday that it’s implementing the recommendations Hogan made in her report. The agency also argued that the app needed to be rolled out quickly at the start of the pandemic.
“The CBSA was working as quickly as possible to replace a paper process that was not meeting public health needs and was also impacting the border with significant wait times that disrupted the essential flow of people and goods,” the statement said.
WATCH | Poilievre blasts government over ArriveCan costs:
Poilievre criticizes use of outside consultants after ArriveCan report
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Conservative Leader Pierre Poilievre says a government led by him would cut down on outside consultants after Auditor General Karen Hogan’s report on the ArriveCan app found a ‘glaring disregard’ for basic management practices.
Hogan told MPs on Monday that seeking outside help for the app at the start of the pandemic was “reasonable.” But she said she would have expected less reliance on outside contractors as the project continued.
“We didn’t see that transition, whether it be that the public service take over some of the operations of the application or that there be a transfer of some knowledge or skill,” she said.
Conservative Leader Pierre Poilievre blasted the government over the app’s costs and accused Prime Minister Justin Trudeau of “wasting [taxpayers’] money.” He promised to cut back on third-party outsourcing if his party forms government after the next election.
“Public servants do the work more accountably and they do it more affordably,” Poilievre told reporters outside the House of Commons on Monday.
WATCH | ArriveCan contracting practice was ‘unacceptable,’ says LeBlanc
ArriveCan contracting practice was ‘unacceptable,’ says LeBlanc
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Duration 2:44
Public Safety Minister Dominic LeBlanc says he’s glad the auditor general has drawn attention to the ‘lack of rigour in the contracting process’ for ArriveCan.
Responding to questions from reporters on Monday, Public Safety Minister Dominic LeBlanc said ArriveCan’s “contracting process was unacceptable.”
Pressed to state whether the Liberal government takes any responsibility for the process, LeBlanc said it already has started corrective measures.
“The Trudeau government accepts that taxpayers’ money needs to be treated with the utmost respect. In no way are we going to defending this particular contracting process,” he said.
LeBlanc said he’s confident that an ongoing CBSA investigation into the matter will root out any wrongdoing that occurred during the contracting process.
NDP Leader Jagmeet Singh blamed the rise in government outsourcing on both Liberal and Conservative governments.
“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,” he said in a media statement.
Firm influenced criteria for contract it was later awarded
There is also little documentation to show why or how the biggest contractor — GC Strategies — was chosen for the project.
The company is a two-person consulting firm that advertises itself as being able to help companies navigate the government’s procurement process.
GC Strategies was given a sole-source contract in April 2020 despite a lack of evidence that the firm provided a proposal document for the project, the report says.
Hogan notes that at least one other firm provided an initial proposal for the same contract.
WATCH | AG says firm shouldn’t have been involved in developing contract criteria:
Outside vendor ‘likely limited competition’ in ArriveCan proposal process, auditor general says
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Duration 1:31
Auditor General Karen Hogan says GC Strategies’ involvement in the request for proposal process for Arrive Can likely led to very ‘restrictive and narrow’ selection criteria that allowed only the consulting firm to respond to the proposal request.
The report indicates that the auditor general couldn’t determine which government official made the final decision to select GC Strategies for the April 2020 contract.
And Hogan also found that GC Strategies was later involved in developing requirements that were later used for a competitive contract. That contract — valued at $25 million — was awarded to GC Strategies, the report says.
“In our view, flaws in the competitive processes to award further ArriveCan contracts raised significant concerns that the process did not result in the best value for money,” the report reads.
Alexander Jeglic, Canada’s procurement ombudsman, found the criteria used in awarding one contract “heavily favoured” GC Strategies. (Justin Tang/The Canadian Press)
A previous report by Alexander Jeglic, Canada’s procurement ombudsman, found that the criteria used in awarding the $25-million contract were “overly restrictive” and “heavily favoured” GC Strategies.
Jeglic also found that GC Strategies “copied and pasted” government-listed requirements for subcontractors on numerous occasions when submitting proposals to CBSA officials.
Speaking to reporters following her appearance at committee, Hogan echoed Jeglic’s conclusion that the requirements for the $25 million contract heavily favoured GC Strategies. Hogan noted that GC Strategies was ultimately the only firm to bid on the contract.
“[The requirements] were very restrictive and narrow, which likely limited competition,” she said.
“That kind of involvement by an outside vendor in a competitive process should not happen.”
CBSA officials invited to ‘dinners and other activities’
Hogan’s report also raised concerns about CBSA officials having a close relationship with certain contractors, noting that the officials in question were invited “to dinners and other activities.”
Those officials did not disclose information about these invitations to their supervisors, which she said “created a significant risk or perception of a conflict of interest around procurement decisions.”
The report notes that further investigation of these findings was not pursued because they are subject to ongoing investigations by the CBSA and the RCMP.
The CBSA has been conducting an internal investigation of the ArriveCan contracts. Agency president Erin O’Gorman told the House government operations committee last month that the investigation’s preliminary findings caused her great concern.
O’Gorman said the investigation found “a pattern of persistent collaboration between certain officials and GC Strategies. They show efforts to circumvent or ignore established procurement processes and roles and responsibilities.”
O’Gorman cautioned that the investigation is still ongoing, but a copy of the preliminary findings was provided to MPs on the committee last week.
VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.
The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.
The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.
The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.
The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.
MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.
In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.
“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.
“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”
In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.
“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.
The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.
“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”
The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.
The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.
A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.
This report by The Canadian Press was first published Nov. 9, 2024.
The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.
Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.
Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.
Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.
“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.
“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”
Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.
“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.
Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.
“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”
But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.
Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.
“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.
Paddon said the initiative is a great idea, but she would like to have known more about it.
The legion also sells a larger collection of items at poppystore.ca.
This report by The Canadian Press was first published Nov. 9, 2024.
