Auditor General Karen Hogan released a report on Monday revealing that federal spending on the ArriveCan app and its “glaring disregard for basic management practices” cost Canadian taxpayers an estimated $59.5 million with little value provided.
Monday’s audit report came following the House of Commons passing a motion in November 2022 to conduct a detailed study on the government’s management of the ArriveCan application which was shut down by Ottawa due to a lack of use.
The earliest estimates for the application put costs at only $80,000, a figure that quickly ballooned to over $54 million.
In the Auditor General’s report, the most up-to-date estimation for the Arrivecan’s cost is $59.5 million.
The report concluded that the public service did not ensure that Canada received the best value for money.
“I would tell you that we paid too much for this application,” said Hogan.
The costs were from work outsourced to 32 different contractors. GC strategies had the biggest price tag of the contractors at $19.1 million.
Conservative MP Larry Brock posted on X that the testimony was “jaw-dropping.”
“Auditor General reveals Trudeau paid $20 million to GC Strategies on Arrivecan. The 2-person IT company did no actual IT work on the app. This is DOUBLE what was previously reported. Where did the money go?”
The report found that financial records were not well maintained by the Canada Border Services Agency. Thanks to poor documentation and weak controls at the Canada Border Services Agency, only an estimation of the cost was provided.
18% of invoices submitted by contractors that were tested did not have sufficient supporting documentation to determine whether expenses were related to ArriveCan or another information technology project. The real cost of the application could be higher or lower.
Hogan spoke at the House of Commons about her findings following the release of her report.
When speaking about whether the app could have cost more or less than estimated, she said that it’s possible.
“The bookkeeping is the worst I’ve seen in years,” said Hogan. “I’ve been left perplexed,” she added when explaining the lack of information to show whether work done was associated with ArriveCan.
The costs for the ArriveCan application included more than just the digital health form related to the Covid response. While developing the application, the Canada Border Services Agency added the digitization of the customs and immigration declaration, a previously paper-based system.
The breakdown of expenditures was $53.3 million for the pandemic-response health component and $6.2 million for the customs and immigration declaration form.
“In this audit, we found disappointing failures and omissions everywhere we looked,” she said.
The most concerning was that the Canada Border Services Agency did not have complete and accurate financial records.
Financial issues aside, the Auditor General found no evidence that the Canada Border Services Agency disclosed invitations to private functions they received from contractors, as required by the Code of Value and Ethics.
Conservative MP Garnett Genuis pointed out that Hogan’s report showed the cozy relationships between the Trudeau government and the contractors at GC strategies. This company was involved in the development of the rules and requirements for making proposals.
“This seems, to me, akin to having the coach of one of the teams making the rules and directing the referee — an effective rigging of the process,” said Genuis.
“This created a significant risk or perception of a conflict of interest or bias around procurement decisions,” said Hogan.
Public servants must always be transparent and accountable to Canadians for their use of public funds, Hogan explained.
“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.”
“I believe that this audit of ArriveCan shows a glaring disregard for basic management practices.”
During questioning, Conservative MP Michael Barrett asked the Auditor General that in her investigations of billions of dollars in government spending during her tenure, whether she believed this to be the worst example that she’s seen.
Hogan said that she has looked at a lot of contracting that happened during the pandemic, where the public service was required to act quickly to serve the public.
“This would be the first example I’ve seen where there is such a glaring disregard for some of the most basic and fundamental policies and rules and controls,” said Hogan.