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Context: House Hansard - 286 - Feb/27/24

Feb/27/24 11:12:48 a.m.
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Mr. Speaker, in fact, I mentioned in my speech that the CBSA has already put in place conditions to cancel or no longer move forward with management consultants. There is more work to be done, based on the results of some of the work done in multiple reports. I also want to point out that one of the things highlighted by the AG was the fact that the CBSA routinely approved and paid invoices that contained little or no details of the work completed. This is a very serious issue, an issue that, again, the Conservatives seem outraged about, yet they themselves did the same with the very same companies. To my hon. colleague's question, this is why CBSA has also initiated a full review of CBSA procurement practices. It is because we want to make sure, as I said in my speech, that Canadians see value for money and that there is transparency in the system. This is not something that just happened overnight, but we are committed to fixing it and giving that assurance to Canadians.

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Mr. Francis Scarpaleggia (Lac-Saint-Louis, Lib.)

Feb/27/24 11:14:10 a.m.
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Mr. Speaker, I am disappointed that unanimous consent was not given to table these very important documents, which are very revealing of how the previous government managed things. I am also shocked by the obvious cozy relationship that existed between the previous Conservative government and this firm, and the very lax contracting policies that left us documents with words such as “work unspecified”. Does the member not feel that perhaps this cozy relationship and these lax practices might have emboldened GC Strategies going forward?

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Ms. Jennifer O'Connell

Feb/27/24 11:14:52 a.m.
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Mr. Speaker, my hon. colleague has posed yet another question about this situation. That is why I am happy to see that the CBSA and the commissioner are working with all agencies to look into this. In fact, they have also reported any concerning allegations to the RCMP. As my hon. colleague raised, this company has a long-standing history with the Government of Canada under the previous Conservative government, so perhaps it became very used to working in this system. I do not know, but I do think it is important that we not only get to the bottom of this and look at what happened here but also, more importantly, fix procurement across the system.

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Mrs. Julie Vignola (Beauport—Limoilou, BQ)

Feb/27/24 11:15:50 a.m.
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Mr. Speaker, we are gathered— Some hon. members: Oh, oh!

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The Deputy Speaker

Feb/27/24 11:15:59 a.m.
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We are restarting the debate with another member, which is an opportunity for that person to present without interruption. The hon. member for Beauport-Limoilou.

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Mrs. Julie Vignola

Feb/27/24 11:16:16 a.m.
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Mr. Speaker, we are gathered here today to discuss a Conservative Party opposition motion. While we expected to have another of many motions on the carbon tax, which does not apply in Quebec and represents less than 0.15% of inflation, it was a wonderful surprise to see that we were going to talk about something else. Honestly, that feels good. Today's motion is on the ArriveCAN application, a matter that has been before the Standing Committee on Government Operations and Estimates for study since October 22 and for which I have the pleasure of reading every document that we receive. In fact, I have prepared a table of contents, and, so far, these documents represent 27 pages of table of contents. That will give members an idea. What is more, I have not even finished it all yet. I also want to point out that my hon. colleague from Terrebonne, who is also examining the ArriveCAN app at the Standing Committee on Public Accounts, is the next speaker. I will be sharing my time with her. So far, we have met with 46 witnesses and received two briefs, as well as tens of thousands of pages of documents. Just to give members an idea, the table of contents so far is 27 pages long. Naturally, I have not read it all yet. Reading is one thing, analyzing is another. Connecting each piece of information to form a cohesive and coherent whole will take more than five minutes. It will take more than a 15-second sound bite on social media. Why introduce this motion today if the subject is being studied in committee? Some of us may be wondering. This is one of the questions I will attempt to answer in my speech by giving an overview of the situation as we understand it so far. I will talk more about what ArriveCAN is and about what has happened since 2022, in other words, about what we have learned. ArriveCAN is an app that travellers were obliged to use for declaring their vaccination status at customs. The first contracts for ArriveCAN date from 2017, long before the pandemic. The aim of these contracts was to create an app that would facilitate declarations at Canadian customs. The health aspect was added to the app in 2020. That is when everything appears to have started going off the rails. How much was the app supposed to cost at first? So far, the answer appears to be $80,000. In 2022, it was to cost around $250,000, after a team of young programmers copied the app. The team told us in committee that copying an app is much easier than starting from scratch but that, even if they had created it from scratch, applying the security codes and updates, it would not have cost $54 million, the number that was being bandied about at the time. We are now at a cost of $59.5 million. After that, we found out more about ArriveCAN and its cost. Our investigation revealed that consulting firms had been given hefty contracts. What did these consultants do? Essentially, they turned on their computer, accessed LinkedIn to find specialists and listed them along with their daily fees. Incidentally, the consultants invoiced between $1,000 and $1,500 a day for specialists. However, we found out through the ombud that 76% of the people on the list of IT specialists submitted by GC Strategies never worked on the app. Other specialists, who were not on the original list, and with who knows what qualifications, did the work. I hope people are following me. That is essentially what the consulting firms did. At the end of the day, they invoiced 15% to 30% to submit names. In short, 15% to 30% of the daily fees invoiced were for specialists who did not end up working on the app. That reminds me. Remember the two guys who set up a company and, within seven days, had a $237-million contract for 10,000 ventilators? They took that contract and gave it to Baylis Medical, a company owned by a Liberal MP who lost his seat in the 2019 election. If we apply that same percentage, 15%, which is the minimum, that means those two guys pocketed $40 million seven days after starting their business. That sounds a lot like GC Strategies, but in this case, things started well before the pandemic. Things started in 2015 for GC Strategies and in 2007 for Coredal Systems Consulting. That is the Canadian dream, being a consultant and having an extraordinary ability to find people on LinkedIn. There are similarities there. People set up a business in their basement, take a quick look around and end up with millions of dollars in their pocket at the end of the day. This is all strangely reminiscent of a system that we need to study, analyze and investigate. GC Strategies is not the first of its kind. Its predecessors include companies such as Coredal Systems Consulting and FTI Professional Grade. This is a big deal. The Auditor General says she has never seen worse record-keeping than in the ArriveCAN books. That is a big deal. Today's motion is about accountability. Yes, the opposition certainly has a role to play in drawing attention to information like that. However, it is not up to Julie Vignola alone, or the member for Terrebonne or a small research team to sift through tens of thousands of pages to find every item related to ArriveCAN. At some point, accountability is also the government's responsibility. It knows where it invested taxpayers' money. Speaking of taxes, it would be nice if companies hired by the government did not use tax havens, which may be the case for one company that got millions through the ArriveCAN contract. I would encourage everyone to read today's La Presse. We are being criticized for voting in favour of ArriveCAN. I will point out the estimates in question. ArriveCAN is mentioned in the supplementary estimates (B), 2021-22, on pages pages 2-2 and 2-82. ArriveCAN is also mentioned in the supplementary estimates (C), 2021-22, on page 1-19. These budgets were voted on as a block. If we had voted against them, like the Conservative Party members did, we would have been voting against the construction and management of indigenous women's shelters, against financial support for festivals and tourism, against community revitalization, against financial support for mental health and against support for Afghan nationals, support that the member for Charlesbourg—Haute-Saint-Charles was screaming for in the House. We also would have been voting against the procurement of PPE. There is a problem. We agree with the motion, but we also need to put the CBSA under third-party management, because whistle-blowers have been warning of serious problems for quite some time, particularly regarding passports, and members of both the Conservative Party and the Liberal Party have turned a blind eye to these problems. It is time to put this agency under administrative supervision. We will vote yes, but we need to go even further.

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Mrs. Brenda Shanahan (Châteauguay—Lacolle, Lib.)

Feb/27/24 11:26:20 a.m.
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Mr. Speaker, I have a great deal of respect for my colleague and for the work that the Bloc Québécois does on matters of finance, because we both think that it is important to manage the public purse wisely. I am afraid that the aspersions she is casting on Frank Baylis, a former Liberal MP, are not correct at all. Mr. Baylis chose not to run in the 2019 election. His company was created by his mother, a new Canadian who arrived from the Caribbean Islands in the 1940s. She was a nurse and she started this company to distribute medical products. Today, it is worth billions of dollars. Mr. Baylis did not need to get contracts. He helped someone in the sector, a Conservative donor, who wanted to help by providing ventilators. I would like my colleague to apologize for what she said about the hon. former member.

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Mrs. Julie Vignola

Feb/27/24 11:27:50 a.m.
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Mr. Speaker, first of all, I did not name the member, I simply named the company. Second, I did not lie because FTI Professional Grade Inc. did indeed receive a contract seven days after the company was created. It then transferred that contract to Baylis Medical. Seven days after it was created, that company, FTI, received a $237-million contract for which we can assume there was a 15% to 30% commission. So I did not make anything up. All one needs to do is follow the paper trail in the newspapers as well as the budgets and contracts allocated during the pandemic.

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Mr. Greg McLean (Calgary Centre, CPC)

Feb/27/24 11:28:42 a.m.
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Mr. Speaker, I appreciate the comments made by my colleague from Quebec, but I have other comments and questions about other companies that received a lot of grants and contracts from the Liberal government during the pandemic. In my opinion and that of my colleagues, the Liberals hid behind the pandemic to hand out a lot of money to their friends. Is the member aware of the other contracts like the one that went to Medicago? What has been happening with Medicago from the time the contract was awarded until now?

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Mrs. Julie Vignola

Feb/27/24 11:29:28 a.m.
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Mr. Speaker, when the pandemic started, we might recall that, in terms of vaccine procurement, the federal government put all its eggs in one basket. It reached an agreement with the Chinese government, but the agreement fell through. We were left in the lurch, with no access to vaccines. Then the Government of Canada decided to diversify its potential pool of vaccine producers, including Medicago, but not without some risk. Some producers, not just Medicago, failed to deliver vaccines for various reasons and, unfortunately, the Government of Canada lost its deposit payment. Following a decision by Mitsubishi Tanabe Pharma, Medicago no longer exists. A decision was made. Yes, we lost money, but it could have easily turned out in our favour. There was a race to be the first to manufacture vaccines and get access to the market.

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Mr. Charlie Angus (Timmins—James Bay, NDP)

Feb/27/24 11:30:59 a.m.
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Mr. Speaker, I was on the committee that looked into the spending. We looked at Baylis Medical. We looked at Palantir. We looked at WE Charity. We found no evidence on Baylis. There were certainly many questions about WE, but the question about the spending on ArriveCAN, to me, is a question of a lack of oversight. The $59 million could have been spent on 32 different contractors. Where was the accountability? Even in the midst of a pandemic, when we were trying to get money out the door to get tools that could help, this is an issue of a fundamental failure of oversight, and I think that is the question we need to focus on.

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Mrs. Julie Vignola

Feb/27/24 11:31:42 a.m.
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Mr. Speaker, unless we keep our eyes on the big picture, spending can easily get out of control. That is true for individuals, and even truer for governments. We are dealing with a situation where the government not only lost sight of the big picture, but also seems to have spent recklessly without making any checks at all. The problem also relates to problems the agency has been having for a number of years.

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Ms. Nathalie Sinclair-Desgagné (Terrebonne, BQ)

Feb/27/24 11:32:21 a.m.
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Mr. Speaker, nearly two weeks ago, the Auditor General released a scathing report regarding the government's handling of the ArriveCAN app. The Auditor General said that the management of the app was one of the worst examples she has seen in her career. Now we are learning that the ArriveCAN file is just the tip of the iceberg. The purpose of the app was for people to register travel with the CBSA in the context of COVID‑19. The app was supposed to cost $80,000. Another company said it would have cost about $250,000 to develop. We are talking about an app that cost only $12 million in France for a population of 70 million people. I could name other examples where this app cost far less in other countries. Unfortunately, in Canada, it cost nearly $60 million. I mentioned the tip of the iceberg. The fact is, the Auditor General and her team could not even put an exact figure on the cost of the app. That is where the problem starts. That is the crux of the problem. It has to do with a procurement process that was completely disregarded. The Auditor General and the procurement ombud have come forward with some pretty serious allegations that Public Services and Procurement Canada and other departments simply did not follow what is supposed to be an exemplary procurement process worthy of a G7 country. Here are a few examples. The average daily cost for this app was about $1,090, whereas it is usually around $675 for IT positions.

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Ms. Nathalie Sinclair-Desgagné (Terrebonne, BQ)

Feb/27/24 11:34:07 a.m.
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We already know that the companies that billed their services to the government billed nearly double what it should normally cost. Here are other examples. In roughly 76% of applicable contracts, the human resources detailed in the winning bid did not do any work. In other words, huge contracts were signed that included resources who, at the end of the day, never did any work. We have an entire department that is supposed to do its job when it comes to the procurement process and is supposed to have processes that work and are followed. In both cases, that work was not done. Here is another example: 18% of the invoices submitted by contractors that were audited by the Auditor General were not supported by adequate documentation to determine whether they were related to ArriveCAN. That is why, from the outset, I said that they did not even know how much ArriveCAN cost. It is inherently problematic. There is such a lack of documentation that one might think we were in a third world country. Having audited procurement processes in developing countries myself, I think that they have better procurement processes than we do. It is shameful. There is a second level to this. Serious misconduct is suspected. In her report, the Auditor General indicated that she noted situations in which Canada Border Services Agency employees who were part of the ArriveCAN project had been invited to dinners and other activities by suppliers. There is no evidence that the perks that these public servants received were reported to their superior as they should have been. That is something that we do as parliamentarians. If we receive a gift, we report it. We are closely scrutinized, and that is how it should be. Obviously, the top priority of public servants is to serve the public. Public servants know that, when they accept their position, they must serve the public to the best of their abilities. As a result, they must report any appearance of a conflict of interest. That is essential when a person enters the public service. There has been a lot of talk about GC Strategies. Let us not forget that GC Strategies was known as Coredal Systems Consulting back in the Conservatives' day, and it too received contracts. However, we have also heard about another company called Dalian. According to what we learned this morning, the owner of Dalian—another company that received millions of dollars for the ArriveCAN app—has bank accounts in tax havens. No surprise there. Receiving that much money but providing little or no service certainly raises questions about misconduct. That is where things stand now. We must let the RCMP do their job. We also know that the owners of GC Strategies have numbered companies. I just wanted to share that. Numbered companies allow for a lot of leeway. Again, we will let law enforcement agencies investigate that. There are some serious questions about misconduct here. One thing is certain, companies like Dalian and GC Strategies had contracts under the Conservatives. Whether we are talking about GC Strategies or Coredal Systems Consulting, these companies had contracts. However, there is another thing. The contracts with these consultants, these two companies in particular, simply skyrocketed starting in 2017. The increase started in 2016 or 2017. Companies such as Dalian received hundreds of contracts from the federal government. Where did the federal government, the Liberal government, lose complete control of its public service, its public servants, its departments? Was it a lack of leadership? Was it recklessness? That is what we are trying to understand in this story. Again, ArriveCAN is just the tip of the iceberg. The number of contracts awarded on a non-competitive basis has also skyrocketed. Under this government, the problem is systemic. Expertise is being lost. On the one hand, we have the Conservatives. During their reign, they eliminated positions, cut public services, reduced the number of public servants and hobbled public servants' and departments' internal expertise. On the other, we have a Liberal government and its slew of middle managers. Many of those jobs were cut. They may no longer have the internal expertise, but they want to do development. They are zooming around all over the place trying to do development. They end up relying on external consultants like Dalian and GC Strategies to do the work that the government should be doing. The number of these contracts is growing by leaps and bounds. We are not just talking about competitive procurement here. We are talking about the awarding of a huge number of non-competitive contracts. In 2023 alone, 27% of contracts were awarded non-competitively. Do members know in which department that happened? It was at Public Services and Procurement Canada, the department that is supposed to set the example and that is supposed to have processes and ensure that they are followed. Such was not the case since 27% of the contracts awarded by Public Services and Procurement Canada were awarded non-competitively. How then can we guarantee that the government is providing proper services for every dollar spent? Let us remember that we are talking about taxpayers' money. Perhaps some people are so far up their ivory tower that they forget that they are managing taxpayers' money. What is more, when contracts are awarded non-competitively, there is no guarantee that they will be effective or managed properly. We see that Public Services and Procurement Canada did not even follow up on those contracts, and it is not the only one. The CBSA also has a lot to account for. I have given examples of poorly monitored procurement and talked about how serious misconduct is suspected. Basically ArriveCAN is just the tip of the iceberg. The Bloc Québécois will support this motion. However, as my colleague from Beauport—Limoilou said, this motion may not go far enough. Our leader was the first to call for a public inquiry. The Canada Border Services Agency may be the worst, but we do not need to look far to see that quite a few problems exist elsewhere. Perhaps it should be put under administrative supervision. In any case, a lot more needs to be done to get to the bottom of this, because there really is a widespread problem. We saw it with the spending on McKinsey. Ultimately, McKinsey was not necessarily the problem. The Liberal government may have lost full control of the departments, leading it to become dependent on consulting firms to the point where it has now lost all control. Part of the blame lies with the Conservative government's irresponsible actions, including cuts to the public service, which created a need for outside expertise. To conclude, Quebeckers can see that they will have an irresponsible government if the Conservatives come to power. They also see that the Liberals are an irresponsible government that is incapable of managing its departments. Fortunately, we have other options in Quebec. We have the best option, which is to leave and govern ourselves, because, strangely enough, we do not hear of many cases like ArriveCAN in Quebec. In fact, Quebec's app cost a fairly reasonable amount, about $10 million, which is not the case for Canada's app. I would like to end on that note and on the fact that, in Quebec, we are far better at managing our own affairs. If we have to choose between the plague and cholera, we prefer our country, by far.

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Mrs. Brenda Shanahan (Châteauguay—Lacolle, Lib.)

Feb/27/24 11:42:07 a.m.
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Mr. Speaker, I really enjoyed my colleague's speech. At the Standing Committee on Public Accounts, she provided a very good summary of what we heard from the Auditor General of Canada. I think she would agree that this work is very important and that the work of the Office of the Auditor General absolutely has to remain independent. My colleague pointed out that the Conservatives made deep cuts to the public service and that there is a lack of expertise. Does she agree that we should increase the size of the public service, with all that that might entail, or is there room for consultants? I believe my colleague herself has worked with consultants in her distinguished career.

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Ms. Nathalie Sinclair-Desgagné

Feb/27/24 11:43:02 a.m.
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Mr. Speaker, I thank my colleague for the question. This gives me a chance to say that the Liberals have already considerably increased the size of the public service. Although they increased the size of the public service, they ended up with essentially operational positions responsible for managing the consultants. All the expenses to get expertise have gone up. Often the work is duplicated. Sometimes consultants are hired to do the work that an entire team could do internally. We see inefficiencies everywhere. The problem is more widespread. We need to consolidate the public service and finally provide better services to the public.

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Mr. Greg McLean (Calgary Centre, CPC)

Feb/27/24 11:43:43 a.m.
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Mr. Speaker, I have a question for my colleague from the Bloc Québécois. In her speech, our Liberal colleague talked about the contract awarded to GC Strategies, a company formed in 2015. We have heard that this company had a number of contracts with the Government of Canada before that. However, the company did not exist before 2015. What does that mean?

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Ms. Nathalie Sinclair-Desgagné

Feb/27/24 11:44:28 a.m.
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Mr. Speaker, I thank my hon. colleague for throwing me such a softball, so to speak, since it is really quite simple. The two people who founded GC Strategies had already founded a company called Coredal Systems Consulting. That company has had contracts with the Canadian government since 2007, so under the Conservatives. In 2015, they dissolved Coredal and transitioned that company into GC Strategies. That information is very easy to find on the open government website. It was a typical name change that just happened to coincide with a change in government.

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Mr. Gord Johns (Courtenay—Alberni, NDP)

Feb/27/24 11:45:04 a.m.
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Mr. Speaker, we know that what is happening with ArriveCAN and at CBSA is just the tip of the iceberg. At the government operations committee, I put forward a motion to expand the study to include the big six highly paid consulting firms. When I put forward that motion, members should have seen the room. Everybody in the corporate control parties ran to their phones, saying to hold on. They were checking in with their friends at the big corporations, including, I am sure, the managing directors at Deloitte, who are both former cabinet ministers from the Liberal Party and from the Conservative Party. The Conservatives delayed the vote on the motion not once, not for two meetings, but for three meetings. They finally got confirmation and a go-ahead from their corporate-controlled headquarters at Deloitte that they could support the motion. We knew that the Conservatives would never allow that study to happen and to be expanded. Does the Bloc agree that we need a full investigation that goes well beyond what is going on at CBSA and with the ArriveCAN app and that we need to look at all the outsourcing, especially since it has gone up 546% over the last eight years and has doubled under the Conservatives? We need to get to the bottom of it, and fix this problem.

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Ms. Nathalie Sinclair-Desgagné

Feb/27/24 11:46:23 a.m.
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Mr. Speaker, yes, we do agree because we want to get to the bottom of the matter. A committee could look at everything that has been done with large companies, but the members would drown in the sea of hundreds of thousands of pages of contracts that we do not necessarily have the training to understand. We need to call for a public inquiry. We need outside people who are trained to do this kind of work to come in and get to the bottom of the story. As I mentioned, and as my colleague said, ArriveCAN is just the tip of the iceberg. We do not know where taxpayers' money is going, and that is shameful.

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