ArriveCAN process ‘unacceptable,’ LeBlanc says after scathing audit

The government agencies behind ArriveCAN “repeatedly failed” to follow best practices in the development of the now controversial application, Canada’s auditor general says.

Auditor General Karen Hogan released a long-awaited report Monday that blasted the Canada Border Services Agency (CBSA), Public Health Agency of Canada (PHAC), and Public Services and Procurement Canada, the departments responsible for ArriveCAN.

“Overall, the Canada Border Services Agency, the Public Health Agency of Canada, and Public Services and Procurement Canada repeatedly failed to follow good management practices in the contracting, development, and implementation of the ArriveCAN application,” the scathing report reads.

“As a result of the many gaps and weaknesses we found in the project’s design, oversight, and accountability, it did not deliver the best value for taxpayer dollars spent.”

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The auditor general was tasked on Nov. 2, 2022, to look into ArriveCAN, which was introduced in April 2020 as a way to manage travel during the COVID-19 pandemic. It did so by collecting users’ contact and health information, and issuing quarantine notices to those at risk.

However, ArriveCAN proved to be a controversial tool fraught with technical setbacks.

There was also the issue of price: an early estimate for the app’s preliminary development put the cost at just $80,000 — but the total price tag has since soared to more than $54 million.

Then last January, the Globe and Mail published a story detailing the contracting process: Ottawa IT firm GCstrategies, which the government contracted to take on ArriveCAN and other projects to the tune of $44 million over two years, actually subcontracted the work to build it to six other companies.

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At that time, Prime Minister Justin Trudeau called the contracting process “illogical” and “inefficient.”

Hogan told MPs on the House public accounts committee after the report was tabled that she was “deeply concerned” by what the report 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, and that paper trail should have existed,” she said.

“Public servants must always be transparent and accountable to Canadians for their use of public funds. An emergency does not mean that all the rules go out the window, and that departments and agencies are no longer required to document their decisions and keep complete and accurate records,” she later added in French.

Intergovernmental Affairs Minister Dominic LeBlanc told reporters in Ottawa Monday afternoon the contracting process was “unacceptable.”

“Under no circumstance would we pretend that because the whole world was facing this global pandemic, that the contracting rules that need to be robust to handle taxpayers money, can somehow be disregarded. We’re not saying that at all,” he said.

“We’re glad that the auditor general has drawn attention to this particular, lack of rigor in the contracting process. The good news is the border services agency has already acted in putting into effect a number of the recommendations, but I am assured by the president that she will make sure that every single recommendation is put in place, and as my colleague indicated, the government has taken the necessary steps to ensure that this kind of circumstance won’t be able to happen again.”

Hogan’s report on Monday singled out the CBSA, whose “documentation, financial records, and controls were so poor that we were unable to determine the precise cost” of ArriveCAN.

Hogan’s office estimated ArriveCAN actually cost $59.5 million. It found that 18 per cent of invoices submitted by contractors that it tested did not provide enough information to determine whether expenses related to ArriveCAN or to another IT project, making it “impossible to accurately attribute costs to projects.”

Hogan told MPs it’s possible ArriveCAN could’ve cost less than her office estimated, but it’s hard to determine because the bookkeeping, she said, was the “worst” she’s seen in years.

The CBSA had to rely on external resources for ArriveCAN as it didn’t have the resources to create and maintain it, therefore driving up the cost, the report said.

The auditor general estimated the average per diem cost for ArriveCAN external resources was $1,090, whereas the average daily cost for equivalent IT positions in the Government of Canada was $675.

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The report added the CBSA’s “disregard for policies, controls, and transparency in the contracting process restricted opportunities for competition and undermined value for money.”

“We found that the agency had little documentation to support how and why GC Strategies was awarded the initial ArriveCAN contract through a non-competitive process. We also found that GC Strategies was subsequently involved in the development of the requirements that the agency ultimately included in the request for proposal for its competitive contract,” the report reads.

“Although departments and agencies were encouraged to be flexible given the urgent need to respond to the pandemic, the need to document decisions and demonstrate transparency and prudent use of public funds remained.”

Between April 2020 and October 2022, the CBSA released 177 versions of ArriveCAN with often little to no documentation of testing, the auditor general found. One of those updates in June 2022 resulted in some 10,000 travellers being wrongly instructed to quarantine. Global News learned at the time it took the government 12 days to notify travellers of the error.

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There was also no formal agreement between PHAC and the CBSA from April 2020 to July 2021 to clarify roles and responsibilities, meaning “good project management practices like developing project objectives and goals, budgets and cost estimates, and risk management activities, were not carried out,” the report states.

“We found that there was no evidence to show that some Canada Border Services Agency employees complied with the agency’s Code of Conduct by disclosing that they had been invited to dinners and other activities by contractors. The agency launched an investigation, and we did not undertake further audit work around ethics and the Code of Conduct to avoid duplicating or compromising this process.”

ArriveCAN was mandatory until October 2022 when it became optional. CBSA superintendent Neil VandenBroek told Global News in February 2023 the usage of app dropped below 10 per cent afterwards.

However, he said there was a gradual increase in usage he links to the wider introduction of an advance declaration tool.

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That digital declaration form came at a cost of roughly $6.2 million, the auditor general said Monday.

The auditor general’s report makes several recommendations, including that the CBSA and PHAC should fully document interactions with potential contractors, the reasons for decisions made during non‑competitive procurement processes, and create a process to ensure compliance with the requirements of the contracting policies.

The departments agreed to all the recommendations made in the report.

ArriveCAN “was an effective and necessary tool to collect mandatory health information while facilitating travel and trade. Beyond the context of the COVID-19 pandemic, the app remains available today for travellers who want to make their customs declarations in advance and save time at the border,” agencies said in a news release.

“Despite these circumstances, we recognize that the gaps found by the auditor general are unacceptable and we are taking steps to ensure all government departments are better positioned to undertake projects of this nature in the future.”