The ArriveCAN conundrum fostered abuse of taxpayer dues by government bureaucrats and private firms — so much so that the RCMP is launching an investigation into the matter.
The federal police service is investigating allegations of misconduct concerning ArriveCAN after two tech entrepreneurs warned the federal government of their ‘cozy relationships’ with private firms.
The allegations concern a $500,000 contract that came from a $21.2 million pool of money designated for general services by the Canada Border Services Agency (CBSA).
On October 6, The Globe and Mail first reported the project’s costs totalled $54 million — more than double the initial projections.
Parliament launched ArriveCAN in April 2020 as an alleged pandemic management tool for travellers to upload mandatory health information, such as vaccination status, at border crossings.
Ritika Dutt and Amir Morv, founders of a Montreal-based software company called Botler, informed the agency of their concerns in September, 2021, and again in a more detailed report the following November.
They accused senior government bureaucrats of holding improper contracting practices with three Ottawa-based companies on the project — GCStrategies, Dalian Enterprises and Coradix.
Since 2017, GCStrategies has received $46 million in federal funding from all government contracts, having invoiced $44 million to more than 20 federal departments over the past two years.
Coradix and Dalian, which operate from the same office as GCStrategies and who typically operate as a joint venture, have received a combined $362 million from taxpayers over the past decade.
Those companies received progressively higher contracts with the feds since 2016, pocketing $32.6 million in total contracts that fiscal year to $80.3 million in 2021.
On ArriveCAN, GCStrategies received the lion's share of the initial funding at $11.2 million to work on the app, while Coradix and Dalian received a combined $4.3 million.
At committee last October 20, GCstrategies confirmed they subcontracted the IT work to several companies, charging between a 15% and 30% commission rate. The firm billed Ottawa for the project between $1,000 to $1,500 per worker daily.
The Bolger report prompted CBSA to launch an internal review that revealled ArriveCAN’s astronomical costs and prompted weeks of turmoil and finger-pointing among government officials last fall.
Public Services and Procurement Canada (PSPC) privately vented their frustrations with CBSA over alleged attempts to mislead on the app’s contracting deals, reported the Globe.
CBSA provided contradictory responses on how many companies worked on ArriveCAN, with 27 contracts tabled to 23 unique companies. They initially reported only five companies had worked on the app.
On October 20, CBSA wrongly listed Canadian tech company ThinkOn Inc. as having received $1.2 million for ArriveCAN work, only to correct the record a week later by listing Microsoft as the company who received the funds.
“The CBSA will act on any investigation findings and will ensure strengthened controls, oversight, and stewardship over contracting,” said Guillaume Bérubé, a CBSA spokesperson.
PSPC has also shared responsibility for CBSA’s contracts, according to a spokesperson with the former.
The internal documents show that as late as November 9, procurement officials expressed frustration with border officials over their lack of clarity on the contracts.
One procurement officer expressed frustration over not knowing the total number of contracts dished out for ArriveCAN. Senior Director Laura Medeiros understood that number to be 19 contracts.
On November 14, Michael Mills, an assistant deputy minister, urged colleagues not to provide MPs with updated accounting at an upcoming Commons hearing, citing a "lack of clarity."
CBSA later referred the matter to the RCMP, who told The Globe and Mail it is under investigation by the Sensitive and International Investigations Unit.
“RCMP O Division can confirm that we are investigating a file referred from the CBSA that is based on allegations brought to their attention by Botler,” she said, providing no further details as to protect the integrity of the investigation.
Opposition MPs voted 174-149 last November to investigate all payments and contracts associated with creating and maintaining the app.
"We know this was a huge waste of our money," said Conservative leader Pierre Poilievre at the time. "The government spent $54 million on an app that could have been developed over a single weekend for $250,000."
Since October 1, 2022, only a tenth of Canadian air travellers have used ArriveCAN to provide proof of vaccination when it became an optional requirement for travel.
In an Inquiry of Ministry tabled in the Commons, Public Safety Canada disclosed that of 9.97 million air travellers who entered Canada in the first quarter of the year, only 1.13 million (11%) used the app.
Dutt and Morv told the Globe they believe the report should trigger a broader review of how contracts are awarded by the federal government.
The growth in spending on GCStrategies, Dalian Enterprises and Coradix is part of a larger trend of federal outsourcing that increased to $14.6 billion last year — 74% higher than in 2015, when the feds pledged to rollback spending on external consultants.
Prime Minister Justin Trudeau asked the Clerk of the Privy Council earlier this year to review the ArriveCAN contracts and subcontracts tied to GCstrategies, after facing questions on why the federal government couldn't hire these IT companies directly.
"That's exactly the question I asked of the public service," he said. "This is a practice that seems highly illogical and inefficient."
In February, Federal Auditor General Karen Hogan also announced an independent audit of the government's management of ArriveCAN.
As of March 3, Procurement Canada pegged the costs for the app at $55 million. Results on a special spending audit remain pending.