Front Burner - The unknown cost, and political price of the ArriveCan app

Episode Date: February 13, 2024

Canada’s Auditor General has found the government overpaid for the ArriveCan app. And poor record keeping has made it impossible for her to figure out that final total. Catherine Cullen, the host of “The House” joins Front Burner to talk about how an app that was supposed to make pandemic travel easier has ended up costing millions. For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts Transcripts of each episode will be made available by the next workday.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Damon Fairless. If you traveled outside of Canada at any point during the early days of the pandemic, you had to download this app called Arrive Can. It was supposed to be an easy way for travelers to make sure they were following all the pandemic travel rules.

But it caused a lot of headaches. Use Arrive Can. Filling out the Arrive Can app is one of the last remaining travel restrictions for vaccinated travelers. And they could even face a $5,000 fine if they don't complete it. And that was before allegations of threats, a report that apparently scared all the federal parties so much that they suspended a hearing last week, and the untold amount of federal money spent on procuring an app that everyone seems to hate. Yesterday, Canada's Auditor General released a report that blasted the government for its handling of the app. Catherine Cullen is the host of CBC Radio's The House. She's here with me now,

and she's going to break it all down for us. Catherine, thanks so much for coming on. I really appreciate it. Thanks for having me. Okay, so let's start with the basics. For anyone who hadn't traveled outside of the country since the beginning of the pandemic, let's talk about what Arrive Can is, what the app is, and why the federal government felt it was necessary. Yeah, it might be a little bit painful to rewind our brains back to April 2020. The pandemic's still very fresh at that point, but that is when the federal government launched Arrive Can. The stated purpose, it's a communications and a screening tool to ensure that travelers arriving in Canada were basically following pandemic rules.

So this wasn't even about vaccine compliance at that point, because remember, we didn't have a vaccine yet. It was just about trying to manage the border during this really remarkable time that we were living through. Right. And so this was basically just a way of, you know, making the bureaucratic process of traveling across the border, quote unquote, easier at that time. That was the intent. Yes. Okay. So I have my own memories of Arrive Can. I'm going to keep them to myself for journalistic objectivity, let's say. I'm guessing they're not fond. I'm not willing to disclose my opinion. But let's just say that I know some people who found it very unpleasant to use. I know it did actually cause a lot of headaches for a lot of people.

There were issues with it, like, right away. The mayor of Niagara Falls says the app is holding back many Americans. They're telling me it's easier to go to Europe than it is to come to Canada. That's frustrating. They said they were ordered to quarantine for two weeks because they didn't fill out the Arrive Can app. We weren't aware that we needed this for for you know land border crossings. Very upset.

Angry. Angry, yes. Customs called us and asked if we would be willing to provide this as a service for Canadian citizens because they were having to turn around a lot of elderly people that were coming across because they don't have the technology and stuff to do the Arrive Canada app. So can you take me through what the general complaints about the app were? Yeah, certainly some people found the process cumbersome. It wasn't working for them. But I think when we look back on it now, the complaint that stands out the most, the one that keeps

being brought up as we talk about all the money that was spent on this app, 10,000 people who had been vaccinated were actually told to quarantine. And if they didn't, they could face fines of up to $5,000. It was a mistake. And the travelers weren't notified of that error for 12 days. And the Privacy Commissioner of Canada actually looked into this because, of course, it did involve using people's personal information. Commissioner said, basically, the government should have had its act together on this and didn't. So it was clear this was not the best app in the world. It was clear that it was causing people trouble. But then in 2022, the House Commons voted to request an audit into the app. And this came about really from reporting by Bill Curry, a reporter at the Globe and Mail. So can you remind me, like, what did MPs decide? Like, why did they need this investigation? What was the decision there? Well, it was reporting about a cost overrun that I think

really set off alarm bells. And you're right to point to the Globe and Mail and Bill's work specifically. They have really led the charge around this story. What the Globe reported at the time was that the app was projected to cost $54 million, a lot more than was expected. It also noted that there was some real confusion around the contracts for the work on the app, the amounts paid, how the contracts were being handed out. Things seemed really murky, and MP said, well, I think we need some more information on this. Okay, Catherine, maybe it's worth just stopping for a second and talking about the numbers because honestly, I find it confusing. I've heard a lot of different numbers thrown around everything, like a whole range or anything from like $80,000 to $60 million.

So maybe, can you help me get a sense of how much this app was expected to cost initially, and then I guess what it's estimated to have cost in the long run? Yeah, the biggest opponents of this piece of technology, so somebody like conservative leader Pierre Polyev, point to that figure of $80,000. While the thing costed 750 times more than the prime minister promised. Won't he stand up today? And if you look on the government website, that number does still exist. It's the idea how much it was expected that they would spend on the very first iteration of this app, launching this app. But the number has just ballooned and ballooned, right? $80,000. Now we have this Auditor General's report. She is saying,

we estimated that Arrive can cost approximately $59.5 million. It's almost $60 million, but perhaps the most remarkable thing, and I know we're going to get into this, is she says it's actually impossible to say how much money was spent on this. Could be more than that number, could be less, she says, because the record keeping around all of this was so bad. I have to say that I am deeply concerned by what this audit didn't find. 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? So it's clear that the cost ballooned significantly. A lot more money went out the door than was originally intended.

We should say the use of the app also expanded, right? We talked earlier about vaccination status. That was something that had to be added on. In fact, the Auditor General finds that they relaunched the app 170 times. Yeah, so a lot of changes were made. Some might suggest too many. But it did, its use grew and grew, but most significantly, and what is receiving a lot of attention right now, its costs grew exponentially and well beyond what was originally conceived. You know, as you mentioned, there's been reporting on that, on the cost overrun. There's been little facts, you know, concerns that have been coming out over the last year or so. And then, of course,

there's the release of the Auditor General's report, and we'll get into that in a sec. But I want to back up because to kind of get our heads around this app, we need to understand a little Ottawa firm called GC Strategies. So can you tell me who is GC Strategies? Where do they fit into the story? Yeah, despite the fact that this firm has gotten millions of dollars in government contracts, it's only two people.

They contract other folks, subcontractors, to do a lot of this work and they take a commission. And in fact, they were the biggest contractor by far on Arrive, Ken. GC Strategies, they were responsible for $19.1 million of estimated costs that were attributed to them. The next closest contractor on this was less than $8 million. So they really were a big part of this. Okay, so Arrive Can's not the first government contract these guys, GC Strategies, have worked on, right? That's right. The company itself says it's contributed to many projects for over 20 federal departments. And according to the Globe and Mail, since 2017, GC Strategies has received $59 million in federal funding.

Again, remember, this is ultimately two people. They're just contracting out this work. I'm having trouble wrapping my head around more numbers here. So if the Auditor General's report is, you know, suggesting that this costs something in the $60 million range, that's like $9 to $18 million commission. Am I understanding this correctly? The Globe and Mail says the pay rates for GC strategies, what they billed the government, were often in the range of $1,000 to $1,500 per day per worker. And the company has said that it keeps a commission between 15 and 30%. So you can see that this certainly sounds like very lucrative work.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. Hi, it's Ramit Sethi here. You may have seen my money show on Netflix. I've been talking about money for 20 years. I've talked to millions of people

and I have some startling numbers to share with you. Did you know that of the people I speak to, 50% of them do not know their own household income? That's not a typo, 50%. That's because money is confusing. In my new book and podcast, Money for Couples, I help you and your partner create a financial vision together. To listen to this podcast, just search for Money for Couples.

In order to get these contracts from the government, GCE Strategies basically had to prove that they were the right folks to do it. So what do we know about how they made that case to get this contract? Well, the Auditor General's report is shining some really interesting light on this. She says, in essence, that GC Strategies was involved in developing the requirements for the Arrive Can contract. So to sort of like try and use a little sports metaphor, as I admit, not my forte, but let's go for it. It's like one of the teams is helping the referee develop the rules of the game. And beyond that, the Auditor General says she couldn't find evidence that GC Strategies actually

submitted a proposal for the contract, but they still got the contract. Now, again, so much of what the Auditor General is saying is that the paperwork was just missing. So we just don't know. There's no paper trail here, but there are a lot of eyebrows raised, a lot of questions about how this could have happened. The other thing that I was reading is that there was a government report last month that suggested the company may have met the criteria by saying it would do a bunch of things that it ultimately didn't do. So tell me about that. Tell me about that. Yeah, a government report found that GC Strategies won bids for Arrive Can in part by listing subcontractors who were allegedly the most qualified for the work, but that in many cases, those listed subcontractors didn't actually do the work. And the report questions why the government used criteria that were, as it says, overly restrictive and favored GC Strategies, which resulted in GC strategies getting some pretty big contracts, in some cases when no other bids were submitted. So just to make sure I'm understanding, so they basically tailored the requirements of

the contract to GC strategies. And then in addition to that, some of the stuff that GC strategies said would be done wasn't done? That's what we understand. Yeah. Wow. Okay. So has GCies responded to any of this? One of the partners for GC Strategies, Christian Firth, did appear at a parliamentary committee when things were really starting to heat up. So this was in 2022 to answer MP's questions about this. Now, he said that when it came to ArriveCan, they were the ones who were approached by the government. He made it clear we didn't build a Rive Can. He says they were just dealing with some of the requirements.

We are an IT staffing firm. We actually have no influence whatsoever in day-to-day activities or have any influence on how it's architected or how it's built. We provided a team that they asked for that designed a specific Rive Can component. I cannot comment on anything outside of the bit that we were facilitating for the government. And he says they're proud of the team that they provided to the government.

They never missed a deadline and completed over 150 releases in two years. And they got the job done. OK, so we're talking about political fallout here, right? So but are there any criminal investigations into this? Well, here's what we do know. The RCMP is conducting an investigation related to the Canada Border Services Agency, one of the government departments involved in Arrive Can. We know that that investigation is related to certain employees and contractors. We know that because the Auditor General has confirmed it. We don't know, though,

and I think it's important to say this, the specifics of what CBSA work is being investigated. And also important to say right now, no one is facing any charges. There's also a CBSA audit underway. And part of the reason that this is relevant, certainly to the Arrive Can discussion, is because the Auditor General said she couldn't look closer at some of the issues around ethics and the Civil Servant's Code of Conduct because she didn't want to basically step on investigations that were already dealing with some of those issues. So we've been talking about the procurement process for this contract, but there's also been some fairly major drama in the course of this story. There's been revelations coming out, including one senior government official telling MPs that he was

threatened by another senior government official. Can you tell me about that? Yeah, there are all these little subplots here, and it's sort of incredible what you see when you look into each of them. Now, in this case, these allegations of threats, there's two things that are actually happening here. One, two senior case, these allegations of threats, there's two things that are actually happening here. One, two senior civil servants have been suspended without pay over concerns around awarding federal contracts. Now, one of those people who was suspended is the one who said he felt that he had been threatened. This is Cameron MacDonald. He told MPs late last year that his former boss at the Canada Border Services Agency, had left him feeling threatened.

The gist of what MacDonald had to say is that all these concerns were starting to crop up around Arrive Can, and it was made clear to him that he was going to be blamed. MacDonald said it's actually his former boss who is accountable. So the two men clearly disagreeing about all of this, but MacDonald and another one of his former colleagues currently dealing with a suspension. So again, another one of these subplots where we're waiting to see what it's all going to add up to. So you and I are talking Monday afternoon. The Auditor General's just released her big report.

Can you talk about some of the revelations that came out? Yeah, I mean, the biggest headline obviously has to do with cost, as we said earlier, almost $60 million. And almost more interesting than the cost itself is this idea that we don't even really know what the accurate cost is. You know, the Auditor General said if you made a manual of what not to do, what happened with ArriveCan is basically that. Overall, this audit shows a glaring disregard for basic management and contracting practices throughout ArriveCan's development and implementation. She also says it's clear the government, and that means taxpayers, that means Canadians, paid too much here. The records definitely seem to be quite a mess.

paid too much here. The records definitely seem to be quite a mess. Karen Hogan acknowledges, listen, yeah, there was a pandemic going on. It was extraordinary circumstances. As I said previously, I don't believe that an emergency is a reason to forget that public servants need to be answerable to Canadians and demonstrate that they spent public funds in a prudent way and exercised

their due diligence in doing so. I think it's expected. And it's clear there are a lot of answers missing when she did her work. We've been talking about the Auditor General report that came out today. But last week, there was a House of Commons committee. This was, you know, all parties working together. They were looking into the Arrive Can contracting. And then, as I understand it, the MPs on the committee received a secret report. And I don't think we know anything about that. But the MPs suspended that hearing. And coming out of it, there were some really dramatic things they were saying after looking at the secret report.

Can you give me a little insight into that? Yeah, it's a CBSA, Canada Border Services Agency report, looking at what happened and the things that the MPs said once they were able to take a look at this, what we understand to be a sort of like preliminary look at what was going on inside the CBSA. Pretty surprising, certainly more dramatic than some of the stuff you hear on Parliament Hill. The idea that this report is, one MP said, scary, that the information in it is deeply troubling, and some real concerns from some of the parties that talking more about it would compromise the ongoing investigations.

They sort of shut the conversation down after saying these very, frankly, sort of provocative suspense building things. The gist of it is there's still work to be done, and we're going to have to wait and find out what provoked this sense of fear and concern from these MPs. And how's the prime minister responded to all this? I guess the Auditor General's report that the general unhappiness about the ArriveCAN situation. Well, as of the time that you and I are talking, we haven't actually heard from the prime minister today,

something Pierre Polyev was sort of poking at today in question period. But the government did put a couple of ministers up to talk about what the auditor general has found. Already, several measures have been adopted by the CBSA in advance of the auditor general's report. And all of her recommendations will, of course, be fully implemented. They say things that you often hear, frankly, from government ministers after an Auditor General's report. You know, we're making all the necessary steps to improve

the processes. They say in this case, they're willing to follow all of the Auditor General's recommendations. Some of this work is already happening. One thing that I think is a really interesting argument to follow politically, there are these sort of allusions to the fact that this happened during a pandemic. It was a difficult time. You know, the reason the government was contracting this workout is because they didn't have people with the kind of IT skills to actually get this app built in a timely fashion. But the ministers, Minister LeBlanc, Minister Duclos, were pretty clear just because there's a pandemic, no excuse, they say, for not following the rules. You know, tax dollars need to be treated with respect, they say, and they have very serious concerns about

what the Auditor General has pointed to. And you mentioned Pierre Polyev. What did the Conservatives say? It took minutes from the Auditor General tabling her report for Pierre Polyev to tweet out that the Prime Minister should be fired over this. Polyev didn't go that far when he was actually speaking to reporters. I was in the scrum with him. But he did say that this is corruption. And after eight years of Justin Trudeau, while you can't pay your bills, where you can't afford a home, he's taken 60 million of your tax dollars and given it to a corrupt app, a rive scam. Now, the Auditor General didn't use that word. Polyev points to the cost

overruns as what he sees as evidence of corruption. He also, I thought, interestingly, tied this to the political argument he has been building about the cost of living. He's saying, listen, you can't afford groceries. You go to the grocery store, you put something back on the shelf because you can't afford it. And you look at what happened with Arrive Can, which he often calls Arrive Scam. He says the government is just wasting your money when you can't afford to get by. And I think that is the part of this that is perhaps the most politically dangerous for the government

because people do really feel these cost of living issues in a very acute way. And the idea of this overspending and the Auditor General has clearly said it costs too much. You know, there is something there that may stick with people. So the Auditor General's report, which, as we mentioned, is out today, it'll take a while to filter through it and get a sense of the whole thing. But there's also, you know, there are these investigations now going on. There's a number of

loose threads. So kind of looking ahead, what do you think we should watch for as this unfolds? Well, I mean, don't we all want to know what scared those MPs so much in that CBSA report? That is definitely the one, just because because the sort of spicy language involved. Everyone wants to know what that amounts to. The question of this RCMP investigation into practices at the Canada Border Services Agency, where does all of that lead if indeed we do find out? We have, as I mentioned, those two senior civil servants who have been suspended without pay. What happens to them? And then again, more broadly, is this something that sticks to the government? When you look at how much money governments spend,

$60 million, you know, it's always a little bile rising in my throat as I say that's not necessarily a lot of money in the context of a government budget. But it's also the kind of number that people can can sort of like wrap their hands around and go like, OK, I understand that's a lot of money. A significant portion of this, the Auditor General has said, it was too much money. Canadians have been expressing to pollsters that they're, a growing number, dissatisfied with this government. So is this something that sticks?

Or is this something where Canadians ultimately say pandemic, you know, difficult time, choices had to be made and this doesn't turn into a bigger narrative? I think at this moment, we don't really have an answer to that. We have all these loose threads. Where are they going to take us? What we know today is, as the Auditor General said, Arrive can. It's basically a textbook example of how governments shouldn't be handling contracts. All right, Catherine, thanks so much. It was great talking to you. Nice talking to you, too.

Thanks for having me. All right, that's it for today. I'm Damon Fairless. Thanks for listening to FrontBurner. I'll talk to you tomorrow. For more CBC Podcasts, go to cbc.ca slash podcasts.