The federal government frequently failed to follow procurement rules when awarding work to GC Strategies, the company behind the $59.5 million ArriveCan application, the auditor general’s latest report has found.
“Federal organizations are required to monitor the work performed by contractors. However, we noted that federal organizations frequently disregarded government policies in this area,” the June 10 report said.
Auditor General Karen Hogan said in her report that a total of 106 professional services contracts from 31 federal organizations were awarded to the IT staffing firm between 2015 and 2024, valued at $64.5 million. In 33 percent of the contracts, the federal organizations could not show that the contract resources had the experience needed to complete the work.
In 46 percent of GC Strategies contracts examined by the auditor general, there was no evidence that all the services had been delivered before the company received payment from the agencies. As such, the auditor general was unable to conclude whether government officials had contravened the Financial Administration Act.
In one case, a contract file with the Federal Economic Development Agency for Southern Ontario showed that only one out of three deliverables were received, while evidence was missing for the other two cases. GC Strategies had been contracted to support the development of a data strategy roadmap, and was paid $22,000 for the full contract.
Additionally, the auditor general found that in 58 percent of the non‑competitive contracts examined, the organizations failed to assess whether there would be benefits in calling for bids despite a requirement to do so in most cases. In cases where the organizations gave justifications for this, they cited the need for specialized expertise, managing unexpected workload increases, or filling in for public servants during temporary absences.
The report said 33 of the 35 contracts assessed required a security clearance, but in half of those cases, the federal organizations were not able to show that all contract resources had the clearance prior to the contract award. Additionally, for 21 percent of the contracts with security requirements, the resources worked throughout the contract period without the required clearances on file.
The report concluded that the government contracts awarded and payments made to GC Strategies were not in accordance with procurement policies, and “value for money for these contracts was not obtained.”
During a press conference, Hogan said the report did not include recommendations because the government is not in need of more rules around procurement, but that “federal organizations need to make sure that the rules that exist are understood and followed.”
Hogan added that public servants were at times “surprised” when informed by auditors of requirements to document certain things. “So I think it’s important to know that the rules exist to be able to show to Canadians and parliamentarians that the public service has done their due diligence when they spend taxpayer money, and that’s why they just need to go back to basics here,” she said.
In response to the report, Procurement Minister Joël Lightbound said the agency welcomed the findings and said the results were “in line with previous internal and external audits and reviews relating to professional services contracts and other procurements.”
“While the report did not make any new recommendations, the Government of Canada has taken significant actions on past recommendations and continues to take strong steps to improve oversight and management of federal procurement,” he said.
Lightbound added that the government has taken steps to improve procurement in recent years, such as requiring increased transparency from suppliers around their pricing and use of subcontractors, improving documentation when awarding contracts, and clarifying work requirements and activities.
The ArriveCan Saga
The ArriveCan application was used by the Canada Border Services Agency (CBSA) during the COVID-19 pandemic as a place for travellers to submit travel documents, health assessments, and declarations of plans for mandatory self-isolation. It later became used to check the COVID-19 vaccination status of travellers crossing the Canada-U.S. Border.In February 2024, the auditor general released a report on the app that found the three government bodies tasked with managing the procurement, development, and implementation of ArriveCan—the Canada Border Services Agency, Public Health Agency of Canada, and Public Services and Procurement Canada—showed a “glaring disregard for basic management and contracting practices throughout ArriveCan’s development and implementation.”
In the report, Hogan estimated the cost to develop the app at $59.5 million, but she said that figure could be higher or lower, as she only made the determination based on available information.
A January 2024 report by Procurement Ombudsman Alexander Jeglic also found that in 76 percent of contracts some or all of the resources proposed by the successful supplier hired to work on the application did not do any work on it, with the report also raising concerns about how often key documents related to ArriveCan’s development were missing.
The Committee on Government Operations and Estimates conducted months of investigations into ArriveCan, which culminated in GC Strategies partner Kristian Firth being called to the House of Commons and admonished for failing to answer the committee’s questions. The RCMP also said back in 2024 that it had “multiple” ongoing investigations into ArriveCan.
On June 6, Public Services and Procurement Canada determined that GC Strategies was ineligible for entering into contracts or property agreements with the federal government for the next seven years. The agency previously suspended the company’s security status back in March 2024, preventing it from participating in federal procurements with security requirements.
