The Decibel - ArriveCan and the government’s outsourcing problem

Episode Date: April 19, 2024

On Wednesday, Kristian Firth became the first person in over a century held in contempt of Parliament and ordered to answer MP questions. It all has to do with the ArriveCan app, which his company, GC Strategies, was awarded millions of dollars to help develop.An Auditor-General’s report estimates the app cost taxpayers $59.5 million and most of the work was outsourced to companies like GC strategies. Why the app cost so much and who got that money has come under scrutiny.Bill Curry, the Globe’s Deputy Ottawa Bureau Chief, is on the show to tell us about what’s been going on with ArriveCan and what we learned from Kristian Firth’s historic appearance at the House of Commons.Questions? Comments? Ideas? E-mail us at [e-mail]

On behalf of the House of Commons, I admonish you. On Wednesday, House of Commons Speaker Greg Fergus publicly reprimanded a Rive Can contractor, Christian Firth. Mr. Christian Firth, please remain standing until I invite you to be seated. You are attending the Bar of the House for being found in contempt for your refusal to answer certain questions and for prevaricating in your answers to other questions before the Standing Committee on Government Operations and Estimates. Firth is the first civilian in over 100 years to be ordered to answer MP questions in the House of Commons. And things got heated. Does Mr. Firth think that the prime minister or the liberal cabinet minister should be at the bar answering questions today instead of himself? Or is he willing to go to jail for them?

Mr. Firth? Mr. Speaker, I'm not even sure what the question is there. Yeah, neither are we. The reason Christian Firth is facing these tough questions goes back to the federal government's handling of the Arrive Can app, which his company helped develop.

The cost of this app ballooned into the tens of millions of dollars. And there are questions about why it cost so much and who got that money. Today, the Globe's Deputy Ottawa Bureau Chief, Bill Currie, is on the show to tell us about Christian Firth's company, how it connects to ArriveCan,

and what this tells us about how the government spends money on outsourcing. I'm Naina Karaman-Wilms, and this is The Decibel from The Globe and Mail Bill, thank you so much for being here Thanks Maina So on Wednesday you were at the House of Commons to hear from a man named Christian Firth He is a company called GC Strategies And things seem to get pretty dramatic in the House And Canadians should pay careful attention.

Liberal corruption. You're a bunch of heartless people. It's not helpful. Honestly, Bella, that sounds like a bit of a spectacle. Sounds kind of chaotic. You were there. Tell me, what was it like? Yeah, I mean, it's very dramatic.

We've certainly been covering Parliament Hill for a long time, and you don't normally see citizens in the mix on the floor of the House of Commons. Instead of politicians questioning each other, they're taking turns questioning a private citizen standing at the bar of the House of Commons. That was, you know, really unusual and quite something to see. You said he's at the bar of the House of Commons. Just explain that, because that's actually not something I was familiar with. I think not something a lot of people are familiar with. What does it mean to be called to the bar? It's a form of punishment, I guess, for Parliament to show that they are unhappy with somebody for not respecting Parliament's powers. It is pretty arcane.

It's really only happened about 14 times in the history since Confederation in 1867. It was used mostly in the 1800s, only a handful of times since then and essentially involved in this case Christian Firth walks to the bar of the House of Commons which is a brass rod that is kind of a symbolic separation between the politicians and the outside world and he stood there as the speaker on behalf of all MPs in the House of Commons publicly admonished him for being in contempt of Parliament. And then after that, he took a few steps to his left and sat at a desk with his lawyers sitting beside him and answered questions. Three rounds of questions lasted about two hours. So it was quite the scene.

And this situation where a civilian has been called to the bar, this actually hasn't happened in Canada in over 100 years, from what I understand. Yeah, and it's pretty fascinating going through the archives. There's actually a few similarities. So the last time something similar happened was in 1913. It was another government contractor. His name was R.C. Miller, and his business was to sell parts to government lighthouses. Similar to this case, a parliamentary committee had been looking into R.C. Miller's business practices after they were flagged by an Auditor General's report. In this case, Mr. Firth was singled out in an Auditor General's report. And in R.C. Miller's case, MPs were pressing him about his interactions with government officials involving a contract.

And he had said he didn't want to answer their questions at committee because it could incriminate himself in a police investigation. And so that's why he wouldn't answer questions at committee. The committee found him in contempt, pushed that up to the floor of the House of Commons. At that point, they actually took another step in 1913 and sent him to the Carleton County Jail for a few months as punishment. So all in all, this is a very unusual practice and something like this has not happened in over 100 years. Yeah. So very rare situation. Let's actually talk now about why Firth did have to appear here. So we should, I guess, back up a little bit because this all has to do with an app called Arrive Can, which people are probably familiar with by now. It, of course, launched in April of 2020, just kind of at the start of the pandemic.

People probably remember having to use it if they were traveling out of the country during the pandemic. But Bill, who oversaw the development of Arrive Can? It started with the public health agency and then quickly transferred over to the Canada Border Services Agency. And as you mentioned, it was developed very quickly at the onset of the pandemic. It was supposed to be a way for people traveling during the pandemic to let the government know what their quarantine plans are and that kind of thing. It had a lot of amendments over the year, over the time that it was mandatory, which is part of the reason the government says that its cost escalated. And it definitely had some issues while it was being implemented. There was a period of time where it urged people to go into quarantine on the threat of heavy fines when that was just a computer glitch.

They didn't actually have to quarantine. So that was some of the problems with it. And then over time, as the cost came out and the Globe reported that the cost actually escalated to $54 million, it certainly got a lot more attention at that point. Yeah, this is, of course, one of the most important points, right? So how much was the app initially supposed to cost? Well, that's what's interesting about this. As we unpack it, it was a project that never had a clear budget. The border agency has said that the initial version of the app cost $80,000. And then as they kept making amendments, partly because the rules of quarantine kept changing as cabinet made new restrictions,

the app had to keep getting updated. And so we reported in the fall of 2022 that the cost of the app had climbed to at least $54 million. Well, after that report came out, parliament passed a motion asking the auditor general to investigate this. And Karen Hogan, the Auditor General, published that report earlier this year in February and found that by her estimate, that cost came to about $59 million. And even then, she said that's only an estimate because the record keeping was so poor that it's hard to sort out exactly how much spending belongs to RiveCan and how much goes to other things. Wow. Okay, so from $80,000 to almost basically $60 million. So this is, you know, one of the

huge issues when it comes to Arrive Can. I want to ask you more about this Auditor General report, though, Bill. This was released in February, like you said. We obviously learned about the cost with that, but what else did the report find? I think there was a few really key points in that report. I think one of the main ones was that the Aud was a few really key points in that report. I think one of the main ones was that the Auditor General found the record keeping was really poor. She was finding it hard to track exactly what paperwork was in place when public servants are approving spending that was performed by contractors and subcontractors. And then the part I think that is the most relevant for Christian Firth of GC Strategies was that she found a $25 million contract.

It was actually the fourth that GC Strategies received that included some work for Arrive Can. She questions the way that that came about. She says it looks like GC Strategies was directly involved in setting the terms of that contract. And the terms were so narrow that in her view, really only GC Strategies could have applied. And in the end, no other company, even though it was a public competition, no other companies bid on this and GC Strategies won the work.

How much money did GC Strategies, Kristen Firth's company, how much money did they geties, Kristen Firth's company, how much money did they get for developing ArriveCAN? According to the Auditor General's report, GC Strategies received $19 million to work on ArriveCAN, which is by far more than any other company. So they were definitely the main company that received outsourcing work to work on the app. GC Strategies does dispute that figure. They think it's closer to $11 million. But nonetheless, GC Strategies was the main company that worked on ArriveCam. Bill, what exactly is GC Strategies? What do we know about this company?

Well, I think that's what has captured a lot of attention from MPs is just the nature of this company, how small it is. It is just two people. It is Christian Firth and his business partner, Darren Anthony. They formed this company in 2015. They had been doing similar work as essentially employees for other IT staffing companies and then decided to go out on their own in 2015 with their own business. And that was GC Strategies. And through the public accounts records, you can see that they've been paid over $59 million from government work with numerous federal departments to do all kinds of projects.

And through hearings in the House of Commons, we've learned Mr. Firth has said he typically charges between 15% and 30% of the value of the contract. And they also say that they do not do the IT work themselves. They find other people to do it as subcontractors. And we've learned that sometimes that might mean individual people who are IT specialists, but it could also mean hiring other big companies like BDO, for instance, to do the work. So just to be clear here, so this company, it's two people, no office, but basically their job is kind of the in-between here. So they're an IT staffing company that hire

IT professionals to do the actual work, and then they take a cut of that. Exactly. And so at these percentages, they are making millions and millions of dollars doing this, landing contracts for IT work, but doing no work themselves. And so that has been one of the topics of the hearings in terms of these broader issues here. Is this really an efficient model or should the public service find a way to, whenever possible, do away with these middlemen and just hire other companies themselves when possible? And the prime minister himself at one point said this whole process seems illogical and inefficient. The final thing that we should talk about while we lay the groundwork for ArriveCAN here is this parliamentary committee that's been looking into ArriveCAN for over a year now.

Now, there's actually two committees that have been looking into ArriveCAN, but it is the events that happened at the Government Operations Committee that really led to Firth being called to the bar this week. So, Bill, can you just tell me about that? Certainly. So Mr. Firth appeared in October. And after that, he did provide the MPs with a lot of documents about his subcontracting work and that fueled further hearings. But then he appeared again in March after the Auditor General's report came out. And he was specifically asked about that finding that he was involved in the $25 million contract. This is essentially setting the terms in the contract. Exactly, yes. So that was a key finding, as we discussed in the Auditor General's report.

And when MPs asked him about that he declined to answer he said that he's under the impression that there is an RCMP investigational law at the time he had not been contracted by the police and he said that because of that he didn't want to interfere with the police investigation and he was not going to answer questions with about that and that's what MPs took exception to and they passed a unanimous motion of all parties back to the full House of Commons, essentially saying that Mr. Firth should be found in contempt for refusing to answer that question. And they also felt he was evasive on other questions. We'll be back in a moment.

Okay, let's continue talking about Firth's appearance this week at the bar at the House of Commons. We talked a little bit about the setup there, Bill, but I want to ask you more about the events that happened here. So opposition MPs repeatedly asked Mr. Firth about this $25 million contract that we've been talking about, including NDP MP Taylor Bachrock. He was asking him about this. Let's listen to what he had to say. To most Canadians, this would look like, and I won't exaggerate, it would look like a rigged system that is designed to benefit Ottawa insiders and make it more difficult for entrepreneurs and small businesses in this country to do work for the government. Does Mr. Firth not agree? Did Firth say any more about why his company was awarded this government contract

when he was questioned on Wednesday? During the hearing in the House, he did answer the question that previously he didn't want to answer, which is what was his role in that $25 million contract. Mr. Speaker, the RFP, the contract that's in question, had over 220 requirements involved in there. We offered up three suggestions, what still PSPC deemed 40 qualified vendors could respond to, and of which 10 showed interest. So I don't see that as overly restrictive. There are rules in the procurement rulebook that if you have been involved in setting the terms of a procurement, you cannot then bid in it. He doesn't buy the argument that the terms were so restrictive that only his company could apply.

Firth was also accused of lying to MPs when he was questioned at the parliamentary committee back in March. One accusation is about meeting with some government employees at a bar or a coffee shop for, quote, hospitality purposes outside of work. Bill, what more did he have to say about that? Well, yeah, he has been to the committee a couple of times. And in his first appearance back in October, he had claimed that he had never met public servants outside of work, outside of work hours in non-work settings. Then over time, the Canada Border Services Agency has been doing their own internal investigation. And that is not complete yet, but it's looking into some of the interactions between Mr. Firth and CBSA officials. And some interim information was provided to the government operations committee and that shows quite a few meeting invites at restaurants and bars around town involving Mr. Firth and CBSA officials. It also included documents describing an event to mark the

one-year anniversary of Arrive Can in which we learned that vials of whiskey were sent by Mr. Firth to Canada Border Services Agency public servants who worked on Arrive Can. They got whiskey sent to their home. Wow. And so that directly contradicts what Mr. Firth had told MPs earlier when he said that he wasn't ever meeting people outside of work. So there were definitely questions in the House about that. Again, he was really downplaying that, saying, you know, once you win a contract, it's his job to

stay in touch with his clients, using clients to describe the government departments that he works with. And so that sometimes involved meeting people for coffee or in restaurants. We've been talking a lot about politics and the public service bill, but of course, there is also a police investigation here. The RCMP is looking into this Arrivekin situation. So what is going on with their investigation? What do we know so far? The RCMP was investigating allegations that were first brought forward by a company called Butler that worked with the CIBSA. They weren't involved in ArriveCAN, but they were involved with some of the same companies

that worked on ArriveCAN, including GC Strategies primarily and Dalian and Keratix. And we actually did a whole episode with you on that. So if people want to check that out, we go into detail on that stuff, too. Yeah. Yeah, it's a lot of moving parts to the story. So that was happening. And for a while, the RCMP was saying, yes, we're doing an investigation of the baller allegations, but we are also investigating a Rive Can. And then we had, right before Mr. Firth was about to testify in the House of Commons this week, we learned from the RCMP that they had raided Mr. Firth's home, which is also his business just outside of Ottawa. And that was in connection to the Butler allegations. So not a Rive Can, the Butler allegations are being

investigated. The contents of a search warrant are not yet public, but because Mr. Firth was in the process of being questioned by MPs right after that news broke, MPs asked Mr. Firth what did that search warrant say? Mr. Speaker, I'm

not aware of the allegations. There were six points on the search warrant and I think they weren't I'm not aware of the allegations. There were six points on the search warrant, and I think they weren't very specific to any specific allegation. But from previous testimonies, I'm understanding that it was fraudulent billing and resume fraud. So that was interesting because that is what the Globe and Mail reported in October was that Baller was alleging that GC Strategies had submitted resumes about their experience that dramatically inflated their work experience and that was sent to the government in the contracting process without their permission and that that had gone through to the two other companies, Dalian and Keratix.

As an aside, GC Strategies, Keratix, and Dallion are now currently all suspended from doing government work. So, Bill, we've talked about a lot here, but I want to ask you about the big picture, because in the end, this is about $60 million for ArriveCAN, which is not nothing, right? But for example, in the 2021-22 fiscal year, the government spent close to $15 billion on outsourcing. So I guess, why are we so focused on GC Strategies and the money they got for ArriveCAN? Yeah, I think it's clear from the hearings that this raises issues that are much larger than this

one particular project. There's a lot of companies like GC Strategies that win contracts for very vaguely worded services, so like IT services generally. And then whenever a department needs something, companies like GC Strategies are on a shortlist and they can just go to that shortlist and get what they need without going through a full new procurement and public competition. So while that might be more efficient for the public servants, it raises some issues about transparency because it's never or not always clear what exactly the government is buying and whether other companies really had a chance to bid for this work. And then just the entire system is coming under question.

We had a story recently where Michael Wernick, the former clerk of the Privy Council, the former head of the public service, was saying essentially that the federal government needs a complete overhaul of procurement because it is not working for taxpayers, it's not working for the companies that are dealing with the government, and it's not working for the public servants who are just trying to buy the stuff that they need, whether it's equipment or services like contractors. So those are some big issues that are not easy to solve. But clearly, there are much wider issues here. So just finally here, Bill, what happens next? Like, what are you watching? Well, at the moment, there's probably more than a dozen investigations or reviews that are going on that are related to these issues on procurement or arrive can. The fact that the RCMP recently

conducted a search warrant on Mr. First House means they're at least contemplating criminal charges. So we will see as if they feel they have enough after that search warrant to lay charges. That is a potential next step. There's also their ongoing investigation on if Arrive can. We'll find out what happens with that. I think there are a lot of moving parts and the story is far from over. Bill, thank you so much for your reporting on this and for taking the time to walk us through this today. Thanks for your interest. Thanks. That's it for today.

I'm Maina Karaman-Wilms. Our intern is Raisa Alibi. Our producers are Madeline White, Cheryl Sutherland, and Rachel Levy-McLaughlin. David Crosby edits the show. Adrian Chung is our senior producer, and Angela Pachenza is our executive editor. Thanks so much for listening, and I'll talk to you soon.