Auditor-General to launch review of federal government’s ArriveCan app

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Federal Auditor-General Karen Hogan will launch an audit of the government’s ArriveCan app, her office has confirmed, adding a new layer of independent scrutiny over how the cost of the app ballooned to $54-million and counting from an initial $80,000.

The decision follows a November vote in the House of Commons in favour of calling on the Auditor-General to look into the spending. The motion was approved over the objection of Liberal and Green Party MPs.

Members of Parliament have been scrutinizing the matter since October, when The Globe and Mail first reported that the cost to build and maintain the travel-related app was on track to reach $54-million by the end of the current fiscal year.

The Globe also reported that the company that received the most federal work on the app – GCstrategies – is a small Ottawa business that relies extensively on subcontractors that neither the company nor the government would initially identify.

Canadian technology leaders described the price tag as outrageous, saying the app should only have cost a small fraction of that amount.

A continuing investigation by the government operations committee – which has included public hearings and obtaining company and government documents – revealed that GCstrategies consists of just two people.

Darren Anthony and Kristian Firth told MPs they had invoiced about $9-million over two years specifically on ArriveCan. They also said they have invoiced $44-million for a range of projects with more than 20 federal departments over that same period. They said they charge a commission of between 15 per cent and 30 per cent of contract values for their services, meaning the two men have been paid millions of dollars to hire other people and companies to perform the contract work.

Documents produced for the committee later revealed the identity of some of the company’s subcontractors. The list includes large multinationals such as BDO and KPMG as well as Optiv Security Inc./Optiv Canada Inc.; Macadamian Technologies Inc.; Level Access and Distill Mobile Inc.

Prime Minister Justin Trudeau responded to those details in January, calling the contracting approach to ArriveCan “highly illogical and inefficient.” Mr. Trudeau said that while “speed was at an essence” in the early days of the pandemic, “there are principles that we should make sure are sound moving forward.”

ArriveCan is an app that was launched by the federal government at the onset of the pandemic. It was used by travellers to upload their health information during a period of heavy restrictions on cross-border trips. The app is still available but its use is no longer mandatory.

The ArriveCan audit will be in addition to a review of outsourcing contracts with McKinsey & Company. The Auditor-General’s office had confirmed the McKinsey audit last week.

Vincent Frigon, a spokesperson for the Auditor-General, said in an e-mail to The Globe that the office will also be auditing the ArriveCan spending.

“The Office of the Auditor-General will be conducting performances audits of ArriveCan and McKinsey. As the scope and timelines are not yet confirmed, we cannot comment further at this time,” he said.

Maria Ladouceur, a spokesperson for the Canada Border Services Agency, which is responsible for the app, said in an e-mail that the agency “is actively supporting the Auditor-General’s performance audit.”

The CBSA has published a colour-coded breakdown of the $54-million in spending, which notes that it started out as an $80,000 expense and grew over time as the app was updated more than 70 times when pandemic policies changed.

Ms. Ladouceur said there will be additional costs for the app in the 2023-24 fiscal year, which begins April 1.

“The optional Advance Declaration tool that allows air travellers to make their customs and immigration declaration in the app is used approximately 300,000 times a month. The budget will be approved through normal accounting processes,” she said.

The government operations committee is currently conducting three simultaneous and related studies: one on the cost of the ArriveCan app, one on the rise in federal outsourcing in general, and a third study on the cost of outsourcing to consulting firms such as McKinsey.

The committee has yet to publish reports on its findings related to outsourcing.

Federal officials have said the total value of federal contracts awarded to McKinsey since 2015 is at least $116.8-million. The Globe reported in January, 2022, that federal contract spending with McKinsey has climbed steadily since the Liberals formed government.

During the first two years of the Trudeau government, Dominic Barton served as both a volunteer policy adviser to then-finance minister Bill Morneau and as the global managing director of McKinsey. Mr. Barton told MPs during a recent committee hearing that he had no involvement in federal contracts awarded to McKinsey.

Recently released government spending plans show the cost of federal outsourcing is on pace to set another record this year at $21.4-billion. That would be a 154-per-cent increase above 2015-16 spending, when it was $8.4-billion.