PACP Committee Meeting

     I call this meeting to order.

    Welcome to meeting number 76 of the House of Commons Standing Committee on Public Accounts. Pursuant to Standing Order 108(2), the committee is undertaking its study of the ArriveCAN application.

    Today's meeting is taking place in a hybrid format. Pursuant to the Standing Orders, members are attending in person in the room and remotely using the Zoom application.

    I wish to inform the committee that all witnesses and members have been sound-tested for today's meeting and have passed the audio and visual tests.

    I just have some brief remarks.

    This, of course, is the first parliamentary sitting since the weekend atrocities and killings in Israel by Hamas. Parliament will certainly take this up next week. I'm sure that Parliament will echo Canada's firm condemnation of Hamas's terrorist and satanic violence against innocent civilians. I look forward to that debate.

    Next, there have been some questions and informal discussions about why this meeting is happening today on a recess week, when we would all prefer to be home in our ridings. The audit that the Auditor General is conducting is in reply to a motion by Parliament. Over the last week, new information has emerged that could very well impact the conduct of that audit, and I thought it noteworthy to hear from parliamentarians about that.

    Why specifically now and not next week or the week after? Number one, the Auditor General is tabling a series of audits next week, making it very difficult for her to both be here and do that. As well, the ArriveCAN audit is nearing completion, and I wanted to be sure that the Auditor General had a chance to hear from parliamentarians on this before that was done.

    Ms. Hogan, of course, is here this morning.

    Thank you very much for appearing before us in person. I understand that you have some remarks that you'd like to share with us, so, Ms. Hogan, without further ado, the floor is yours.

    Mr. Chair, thank you for inviting me to appear before the committee as part of its study on ArriveCAN. I would like to acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinaabe people.

     As the committee is aware, on November 2, 2022, the House of Commons adopted a motion calling on the Office of the Auditor General to conduct a performance audit of the ArriveCAN application.

    This audit, which is currently under way, is looking at whether the Canada Border Services Agency, the Public Health Agency of Canada, and Public Services and Procurement Canada managed all aspects of ArriveCAN, including procurement and expected deliverables, with due regard for economy, efficiency and effectiveness.

    I am happy to answer the committee's questions where possible. However, as you know, since this report has not yet been tabled in Parliament, I am not in a position to discuss our findings.

    We expect to present our report to Parliament soon after the House of Commons resumes its sitting in 2024, and I look forward to appearing again before the committee at that time.

    Mr. Chair, this concludes my opening remarks. Thank you.

    Thank you very much, Auditor General.

    I certainly understand and agree with your rules and guidelines about not scooping yourself for that audit. Of course, it remains a work-in-progress, and we would not expect you to do that today. I appreciate that reminder.

    I'm going to turn now to our first member.

    Mr. McCauley, you have the floor for six minutes, please.

     Thanks, Mr. Chair.

     I appreciate your opening comments. The people of Edmonton are obviously in deep shock. There are a lot of victims on both sides, innocent victims of Hamas on both sides. I really appreciate your making that comment.

    AG Hogan, thanks for joining us today. I wanted to start this by blaming Bill Curry from The Globe and Mail for his exposé, but then I realized we were meeting on the request in my letter to the chair to have this meeting. I'll split the blame with Mr. Curry for today.

    I just want to go over how we got here to begin with on the whole ArriveCAN app. We've had a lot of stories on how this small app cost Canadian taxpayers $54 million. We have the company, GC Strategies, which is in the middle of this scandal. It's a so-called IT firm, but it's actually just two individuals working out of a house who seem to have deep, close connections with high government officials. They act almost as lobbyists or an executive recruitment firm, and not as an IT firm.

    We've heard from an IT company involved in the ArriveCAN process. They were an IT company, and they've actually worked out that the number of consulting hours spent on ArriveCAN would cover 32 years of front-end development and five years of back-end development, based on an eight-hour workday.

     We had the original goal of ArriveCAN app: to remove, of course, the burden of paperwork for international travellers coming from air and border pretravel due to COVID. Of course, the app changed over time.

    We've heard from many tech giants and entrepreneurs that commented quite critically on the government—this is from the operations committee study on ArriveCAN—calling out the government on its cost. We had an investor at Roach Capital, who held a senior product lead position at Shopify, and he said he could not comprehend how the cost got to $54 million. Another tech person said, “The amount spent on the app is shocking, especially around the amount of capital spent to build the app and the distribution of the funds.” That was, again, going back to 32 years of man-hours just for the front-end development. Of course, we heard the famous comment about how a garage IT group was able to recreate the app over a weekend.

    Currently in this country—again, it's $54 million for this app—we see that over a million Canadians a month are visiting the food banks. We see our chief of the defence staff, General Eyre, commenting that the chaplains in the armed forces are saying members are group funding or having to seek donations to pay for food for our soldiers. At the same time, the government spent $54 million for what seems to be just optics.

    On the app, as you know, we heard Liberals in OGGO claiming that the app saved tens of thousands of lives, which we know is again a bizarre optics claim. It's not a medical device that saved lives. We hear the government trying to justify the creation of ArriveCAN as a lifesaver. Then we have the former minister of transport saying it's to keep Canadians safe and enhance travel, yet at the same time, we saw 10,000 users sent into involuntary quarantine in error because of problems with the app.

    We had a couple, Don and Karen Bennett, of Burlington, who said they got the notice from the government threatening a $5,000 fine, plus sending the police to them because the app, by error, identified that they should have gone into quarantine. We had massive lines at the airport because of the problems with the app, problems with performance and other issues. Then we had the director of privacy at the Canadian Civil Liberties Association saying, “The term I'd use for [the government's description of the app] is dishonest.”

    Then we have Mr. Curry's article. We have so many concerns about the app. We've heard from Botler, which is a small IT company out of Montreal at the centre of Mr. Curry's article, that has filed two wrongdoing complaints, separately with PSPC and CBSA, over the procurement process.

     We had senior PSPC officials and the head of CBSA at OGGO after these wrongdoing complaints were filed. However, they failed to even bring this up under questioning, purposely omitting that they have wrongdoing investigations going on. We had top officials not disclosing this to OGGO.

    We had Mr. Firth from GC Strategies himself lying to committee about his relationship with officials at CBSA and PSPC. We had top officials from CBSA testifying that there was no relationship with anyone from GC Strategies, yet the article from Mr. Curry in The Globe and Mail shows that this was a clear lie. We had a top PSPC official claim that GC Strategies was chosen for this project because it was a professional IT firm. A second top official stated that GC Strategies was chosen because it was a professional IT firm, when we know it was basically a lobbyist firm.

    Thank you—

    I'm out of time, but I just wanted to express to you a lot of the issues that have come out on ArriveCAN.

    Thank you, Mr. McCauley. We'll be back to you.

    Members know that I don't normally have the alarm on. I'm kind of glad it was there today. It reminded me to be firm and fair.

    Ms. Yip, you have the floor for six minutes, please.

    Thank you, Chair.

    My thoughts go out to those who are impacted in Israel, West Bank and Gaza. It's a very tragic situation and extremely disturbing.

    Thank you for coming in, Ms. Hogan, and for coming in person. I think we all appreciate that.

    Without a doubt, the ArriveCAN study is important, with or without the new information. I have to admit that I'm a bit puzzled by the assertion that an emergency meeting was required on this topic, especially since the Office of the Auditor General is already working on the study report.

    For Canadians at home who are not familiar with the Office of the Auditor General, can you please describe your mandate and how you work with the government on this committee?

    My office is an independent agent of Parliament, which means I report to all of Parliament and not to any branch of the public service. I was appointed into this position for a 10-year mandate after an extensive search, which then required all-party consent and votes in the House and the Senate.

    I am meant to be truly independent and here to support parliamentarians in holding the government to account for the spending of public funds. We do that in several ways. First is with financial audits of several Crown corporations, other agents of Parliament and also the Government of Canada. We also carry out performance audits in both departments and agencies, as well as special examinations, which are similar to a performance audit but in Crown corporations.

    At times we will respond to requests from Parliament, as we are doing with the ArriveCAN app, but what we believe really enhances our independence is that, most of the time, we have the freedom to select who we audit, when we audit and what we audit. We raise all matters of importance to Parliament in a very public and transparent way, as you'll see next week. We'll be releasing five reports. It is part of our responsibility to provide that work to Parliament.

    All my work gets referred to this committee, whether it be reports that I personally table in the House or those that the commissioner of the environment and sustainable development tables. It can all be studied by this committee.

    That being said, any committee in the House or the Senate is welcome to study our work. We are always very happy to talk about what we've found. We do believe that Parliament plays a crucial role in ensuring that departments and agencies act on our recommendations in order to improve services to Canadians.

    Thank you for that opportunity to talk about our work.

    For the folks at home, do you also look at Crown corporations?

    Absolutely. As I mentioned, we are the financial auditor for the financial statements of most parent Crown corporations. We will also carry out special examinations at least once every 10 years, which is a requirement of the Financial Administration Act. At times a Crown corporation can also be included in a performance audit if they are being asked by the government to deliver certain programs that we might be auditing. We do spend a lot of time on Crown corporations throughout every year.

     Is it the general practice of your office to discuss the findings of an audit before it is reported to Parliament?

    No, it is not at all. That's why my opening remarks included that reminder to the committee. We believe that every parliamentarian, whether they be in the House or the Senate, has the right to receive our findings and our report at the same time. We do not talk about ongoing audits with any party other than those involved in the audit.

    Again, just to be clear, will the RCMP's investigation have any impact on your work?

    Historically in the past, when my office has found items that we believed should be referred to the RCMP, we have typically finished our work. At times we might have referenced that we'd referred matters to law enforcement. At other times we might not have. What typically happens is that we will send them a referral letter. They can choose to meet with us and our audit team and talk about our findings and our work. If they would like to see part of our work, they then must send us a summons. I don't know the exact legal term, but they would have to officially request access to our files since our files are protected and we hand them over only if compelled to by law enforcement.

    Are you obligated to suspend an audit if potential criminality is found?

    Historically my office has not done that. As I mentioned, we typically complete our audit and then we are more than happy to provide our working papers and our findings to the RCMP. That's what we've done in the past. When we complete this, should we believe there are matters we need to bring to the attention of the RCMP, we will do so at that time.

    When do you expect the audit to be tabled in Parliament?

    In full transparency to the committee, our goal was to table it before the end of this calendar year. However, we do believe that we need to carry out additional procedures in light of the recent information. That being the case, we believe we'll be tabling our report in the new year. As I mentioned in my opening statement, it will be sometime after the House resumes its sitting at the end of January in the new year.

    Thank you very much, Ms. Hogan. That is the time for that member.

    Ms. Sinclair-Desgagné, you now have the floor for six minutes.

    Thank you, Mr. Chair.

    Madam Auditor General, thank you for being with us today.

    I would like to take this opportunity to offer my condolences to the victims of Hamas, a terrorist group. In this conflict that has gone on for too long, our thoughts are with the innocent victims on both the Palestinian and Israeli sides.

    Madam Auditor General, my first question relates to a comment your office made to the Globe and Mail to the effect that you can't reveal any results until the audit is tabled. That's obvious and I understand that very well. However, I would like to understand the process that allows you, for example, to contact the Royal Canadian Mounted Police, the RCMP, if you find that potentially illegal or criminal acts have been committed.

    That's a great question and I think the answer is that it depends.

    If it's a criminal act and we consider that it shouldn't wait, we'll inform the RCMP as soon as possible. However, if we find something in our audit, but it's really up to the RCMP to determine whether it's a criminal act, we'll wait until our audit is complete before sending a letter to the RCMP saying we'd like to discuss what we've discovered.

    Are you saying it's possible that you'll wait until you've completed your audit, and even tabled your report in Parliament?

    The usual approach is to contact the RCMP almost at the same time as we file the audit report. That way, we can say we've sent them the information. However, the timetable for everything that happens after that is in their hands.

    All right. Thank you.

    In your audits, how do you report any collaboration challenges you may have faced from different actors? How do you report to Parliament that certain actors have potentially collaborated or refused to collaborate with you in an audit?

    Again, it would depend on whether or not we get co-operation from a department. If it's senior management that doesn't want to collaborate, we'd certainly mention that in our report. However, we usually receive incredible collaboration from all departments.

    That said, I've been an auditor for almost thirty years. Over the course of my career, some individuals targeted for audit have failed to provide us with the required information, whether accidentally or intentionally. In such situations, it's what you do afterwards that's important, in my opinion: as an auditor, how should I approach the situation, and how should the individual approach it? We certainly see this from time to time in our audits.

    If you think the person intended to hide certain facts or documents, will you pass this information on to the RCMP?

    It is very difficult to know the real intention of an individual and I encourage the committee to ask the question of other witnesses.

    If we believe there is a possibility of fraud or foul play, we will deem it necessary to refer this to the RCMP, and it will really be up to them to determine if a criminal act was committed.

    I understand.

    You've answered several questions I wanted to ask you, including when you'll be able to file your audit report.

    We learned through the newspapers that the RCMP has opened an investigation into the ArriveCAN application. When you do an audit, do you ever collaborate with the RCMP by sharing information, or do you wait, as you mentioned, towards the end of your audit before sending them information? If you know that an RCMP investigation is already underway, do you forward information to them?

    It is certainly our intention to contact the RCMP. In the newspapers, the RCMP has been very clear: it does not discuss ongoing investigations. So I don't expect them to share information with us, but we will share information with them if necessary.

    Did you learn from the newspapers that the RCMP was conducting a parallel investigation into ArriveCAN?

    Despite my team's presence on the premises of the agencies and department involved in the audit, Canada Border Services Agency management did not inform me that they had reported a problem to the RCMP. So I learned about it by reading the newspapers, too.

    Do you know who reported the problem to the RCMP?

    I believe it was the senior management of the agency.

    Very well. That's fine. This is very useful information.

    Mr. Chair, I believe I only have five seconds of speaking time left; I'll give them to Mr. Desjarlais.

    Thank you, Madam Auditor General.

    Thank you very much.

     The next speaker is Mr. Brock.

     You have the floor for five minutes, please.

    Thank you, Chair, and good morning.

    AG Hogan, thank you for your attendance today.

    I want to start by following up on some of the questions that were put to you by several of my colleagues. I want to start by flushing out a little more narrative with—

    I'm sorry, Chair. On a point of order, is there a change in—

    Pardon me. That is my mistake. Excuse me.

    It wasn't Mr. Brock's turn, but rather that of Mr. Desjarlais, our friend from the NDP.

    Mr. Desjarlais, I am very sorry, and I appreciate your point of order. You have the floor for six minutes.

    It's over to you. Thank you for pointing that out quickly.

     Thanks, Chair.

    Thanks to the Auditor General for being with us today.

     I also want to join my colleagues in sending condolences to those many victims in Palestine and Israel right now who are terrified for their lives. I'm sure we'll be addressing this much more in Parliament next week.

    Auditor General, I have a question about procedure and history. I hope you can indulge me to better understand. In some ways, you already gave reference to the fact that your office is independent and, because of that independence, it operates in a particular way in order to preserve its integrity.

    Particularly when it comes to issues that are currently being studied, have you or has any other Auditor General, to your knowledge, ever been summoned to the public accounts committee in connection with an audit that you are currently conducting?

     I choose to accept every invitation a committee provides to us because, as I said at the beginning, we are happy to talk about our work and we believe that every committee in the House and the Senate plays an important role in holding government to account and making our work meaningful.

    This is the first time I am here talking about an audit that is under way. Unfortunately, I didn't do that bit of research to know whether any of my predecessors would have been here, but I would trust that we would all place the same importance on a committee having invited the office to come and talk about our work, and we would accept that invitation.

    Thank you for that.

    The issue with the ArriveCAN procurement process is very serious. It's even more serious now that there is a criminal investigation aspect to this, which you've just confirmed you found out about in the same fashion that many Canadians did—through the newspaper.

    The question I want to continue on is one that Ms. Sinclair-Desgagné mentioned.

    In your regular duties and your regular auditing processes, if and when you suspect there is an aspect of criminality, you do in fact report that. Is that correct?

    Absolutely.

    As I mentioned, it depends on the degree of what we find. If we feel that it is so critical that we need to inform law enforcement immediately, we do so. Otherwise, we try to finish our work and have it all put together, then inform the RCMP if we believe we should refer the matter to them, and then table our report in the House.

    I know you won't be able to speak directly to any of the findings in your audit prior to its release, but what I would suspect.... Considering that we're now in a committee meeting talking about a study that is not yet published, we're really left to just hypothesize in many ways about the focus or central aspects of your study. I've mentioned this before, it's around the issue of outsourcing.

    I think the issue of outsourcing is largely central to the fiasco we're seeing with ArriveCAN. The public service and even I have made mention of this in this committee before. I've mentioned huge contracts being doled out to folks like McKinsey. We've talked about that in this committee before, as you may recall, Ms. Hogan, as well as about organizations like Deloitte.

    This is no secret to the federal government. This isn't just a Liberal problem. We've seen, for many decades, that it's also a Conservative one. The Conservatives, for many years, also engaged in aspects of outsourcing, very large contracts of outsourcing.

    When it comes to things like outsourcing, I know you have touched on them in other audits, but having done your own review of outsourcing, are you, as the auditor, concerned about them?

    We always look at contracting if it comes up in an audit. We typically also focus certain audits on contracting practices of the government. This audit is one of them, being an audit of the procurement of an IT system. We are also carrying out work in response to another motion from the House to look at professional services contracts, more specifically to look at some of the McKinsey contracts. We're in the process of doing that one as well.

    I can tell you what our office does. We, at times, do outsource certain work. We are very selective about when we do that. We do it in order to add to our staff complement during our peak audit times, or we do it to acquire skills that we don't have on staff, that we don't believe we should have on staff 365 days a year. For example, we might contract out services for actuaries.

    I do believe there are times when it makes sense to contract out services. That assessment, in my view, should be done when an organization decides whether to do it in house, hire the skills needed or outsource them. There are many factors that play into that, including timing, skill sets and capacity. Those are all aspects we will cover in the audit on professional services that will come out soon.

    When that audit is tabled, you said that will be prior to 2024. Is that correct? I think you mentioned that in your last response.

    The ArriveCAN audit we intend to release in early 2024, once Parliament resumes. I think Parliament will come back at the end of January, so it will be sometime in the coming weeks or months after that.

     Thank you very much. That is the time.

    Mr. Brock, you are now up. I'm going to ask that you dispense with your intro.

    You have the floor for four minutes and 45 seconds.

    Thank you, Chair.

    AG Hogan, I want to ask a clarifying question.

    Based on what I've heard in your responses to my colleagues, are you saying that your office—you, in particular—found out that the RCMP is investigating the contracts under the $54-million ArriveCAN app not from the Government of Canada but from reading The Globe and Mail story?

    Yes. Despite my staff being in there auditing all of the departments in this audit, management did not inform me that they had referred a contracting matter, which involved many common players we are looking at, to the RCMP.

    The morning the newspaper article was released, senior management reached out to my office. My team has been in contact with them and in continual dialogue since then.

    I want to break that response down a bit more.

    You mentioned you were dealing with a number of departments. Can you name those departments that did not inform you about the RCMP investigation?

    It's my understanding, from reading the article, that it was the Canada Border Services Agency that did the referral, so I would have expected them to inform us.

    Through the course of our audit, we always ask questions linked to actual, suspected or alleged fraud, and we expect that there's an ongoing responsibility for officials to keep us informed of any matters that are relevant to the subject we are auditing. I am disappointed that they did not tell us while we were there.

    Not only are you disappointed, but Canadians are disappointed. Members of Parliament are disappointed.

    You have been charged with a very serious responsibility. One would think, at the very least, that the government would exercise some transparency and accountability to notify you about this investigation. It failed. It failed you, and it failed Canadians.

    Moving on to the actual story, was that read by you on October 3, when it was released?

    I read it at some point. I can't tell you that I actually read it on the third, but I know I've read it and I've read several articles since then.

    Before I get into more specific questions, I take it you read it thoroughly. It's a very long article.

    I did. I actually reread it last night just in case, but yes, it is a very lengthy article.

    As the Auditor General for this country, did it raise red flags to you?

    In my mind, it covers one half of the story, and I think I needed to understand some of the statements in the article.

    It has caused me, as an auditor, to ask my team to go back and make sure that we've covered off everything we should have. We have the intention of reinterviewing people we interviewed and asking them questions. We have the intention of interviewing new people as a result of the article—

    Can you identify who the new people are that you're interviewing?

    I'm still in conversations with the Canada Border Services Agency about that. We want to inform them, but we told them a few days ago that our intention is to speak directly with certain contractors. We asked them to let them know that we would be doing that.

    Okay.

    Until we've landed on that.... As I said, we don't typically share the scope of our work and who we talk to during our audit—

    I'm not asking that. I understand your preamble—the opening statement—and the restrictions that you have.

    As far as new people to interview are concerned, would they include the two stakeholders from Botler?

    Again, we're going to figure out who we want to talk to. We still have to request certain information. The information I would like to see is the actual allegations that were given to the department. Until I've seen those, I'm not sure whether we want to interview anyone from the organization that laid those allegations.

    At the core of the allegations, they use the phrase “misconduct”, but when you do a deep dive into the particular story, it goes beyond misconduct. It goes into criminality, and that's why the RCMP is investigating it. There are allegations regarding identity theft, fraudulent and forged résumés, contractual theft, fraudulent billing, price-fixing and collusion—all with senior bureaucrats with the Government of Canada and the three contractors in question. Those are GC Strategies, Dalian Enterprises and Coradix.

    At the heart of the article is—

     Mr. Brock, that is your time, but you'll have another opportunity to pick that up again.

    Thank you.

    Ms. Khalid, you now have the floor for five minutes. Go ahead, please.

    Thank you very much, Mr. Chair.

    I'll start by thanking Ms. Hogan, our Auditor General, for her time today and for being so forthcoming with all of the questions.

    We realize this is a constituency week, so at this time, Mr. Chair, I move that the committee do now adjourn.

    I have a motion to adjourn the meeting, which is not debatable.

    I'll ask the clerk for a roll call.

    (Motion agreed to: yeas 6; nays 4)

    The Chair: Thank you.

    I adjourn the meeting.