Spending on ArriveCan app projected to top $54-million, double the amount Ottawa first divulged

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Total federal spending on the ArriveCan app is on pace to reach in excess of $54-million this year – more than double what the government recently said has been spent to date – and Ottawa’s approach to related outsourcing is raising transparency concerns.

A Globe and Mail analysis of ArriveCan contracts found that the company that received the most federal work on the app – GCstrategies – is an Ottawa-area company with fewer than five employees that relies heavily on dozens of subcontractors. Yet the government and the company say they cannot reveal the identities of those subcontractors because of confidentiality provisions in federal procurement rules.

The Canada Border Services Agency (CBSA) has provided contradictory responses in recent weeks related to the number of companies that have received contracts connected to ArriveCan. After providing media outlets this summer with a list of five companies that had received contracts, the agency recently submitted documents in Parliament that list 27 contracts involving 23 unique companies.

The Globe’s review of contracts related to the app found several issues related to transparency. Many of the contracts that are related to the app are not clearly stated as such when they are posted on the government’s contracting site. Further, the contracts can involve a mix of work that includes ArriveCan and other matters, making it challenging to track the spending specifically related to the app.

Some of the contracts also fit with a trend reported on earlier this year by The Globe in which the value of IT contracts increases dramatically through amendments after being awarded.

Ottawa spent $90-million in 2021 on strained access-to-information program

Prime Minister Justin Trudeau’s December, 2021, mandate letter to then-procurement minister Filomena Tassi included an assignment to modernize federal procurement practices in a way that provides value for money and that is “open and transparent.”

Matt Malone, assistant professor of law at Thompson Rivers University who has been researching the ArriveCan app, said it’s “worrying” that the public may never know the full list of companies that worked on building a program that collects the personal information of Canadians.

“If you create the possibility of shrouding in confidentiality all aspects of the work that was done, what kind of transparency and accountability is that?” he said in an interview. “This practice of using independent consultants and contractors to add another layer of confidentiality is really worrying when we’re talking about the delivery of core government programs and services using digital technologies.”

In response to questions about the contradictory information in relation to ArriveCan contracts, a senior CBSA official provided The Globe with a background briefing to explain the numbers and outline an up-to-date tally of federal spending.

The CBSA’s recent report to Parliament in response to a June 1 question from a Conservative MP stated that the CBSA had spent $19.7-million on developing the app and $4.9-million on app maintenance. Those two figures were previously provided by the CBSA this summer in response to media questions about the total amount spent by the federal government on ArriveCan.

However the government’s written response to the Conservative MP added an additional $4.9-million spent by the Public Health Agency of Canada on maintaining and promoting the app, for a total of about $29.5-million.

The CBSA official said those amounts are generally tied to the fiscal year that ended on March 31, a fact that is not clear in the report to Parliament. The official said a further $25-million has been approved for the current fiscal year that began on April 1, of which about half has been spent so far. The CBSA expects the full $25-million will be spent this fiscal year, bringing the total to more than $54-million.

The Globe is not identifying the senior official because they were only authorized to provide background explanations of government policy.

While the government has announced that use of the app is no longer mandatory as of Sept. 30, it will continue to exist as a voluntary option.

The ArriveCan app has a customer review ranking of 4.5 out of 5 stars on the Apple app store, but it has been widely criticized by travellers, businesses and politicians on both sides of the Canada-U.S. border as a source of irritation and delay at Canada’s land and air entry points.

The app was primarily designed as a tool for travellers to upload their mandatory health information in relation to COVID-19 measures. It has since been expanded to allow users to answer customs and immigration questions up to 72 hours in advance of flying into Canada.

GCstrategies is listed in the CBSA report to Parliament as having received three contracts in which the ArriveCan-related work is worth a combined $9-million.

While the company relies on a large number of subcontractors to deliver on its federal contracts, Katherine Proulx, a spokesperson for Public Services and Procurement Canada, said their identities cannot be made public.

“For confidentiality reasons, the government of Canada does not disclose the names of companies who have worked as subcontractors for one of its suppliers, as this is considered third-party information,” she said in a statement to The Globe.

Records show the company recently received a large new contract, which the CBSA said includes some work related to ArriveCan.

Prior to tabling its report to Parliament, the CBSA provided a statement to The Globe that pointed to the three contracts received by GCstrategies that included work related to ArriveCan.

According to the CBSA statement to The Globe, the GCstrategies work on the ArriveCan app included a $2.35-million contract in April, 2020, that grew to $13.9-million after six amendments. The CBSA also said there was a second contract worth $5.9-million that also involved work on the app. The existence of this contract was never made public on the government’s contracting website. The agency said this was because it was invoked under a national-security exemption in relation to the COVID-19 pandemic.

Those two contracts both expired on July 31, 2022, according to the CBSA. The company has since received a new and larger contract for work on ArriveCan and other matters. It was awarded in May of this year and amended in September, with a maximum value of $25.4-million, bringing the total potential value of the three contracts to $45.2-million.

These figures are based on the maximum potential value of the contracts, which include a mix of work related and unrelated to ArriveCan.

Kristian Firth, managing partner of GCstrategies, said in an e-mail exchange to The Globe that the company currently has no stand-alone office space and has been fully virtual since 2020.

Mr. Firth said confidentiality provisions of the contracts limit what he can say about the work. He confirmed that the company’s employee count is between one and four employees, as stated in federal documents, and that the firm relies heavily on subcontractors.

“Our employee count remains the same and is not higher because our business model is to utilize independent subcontractors to deliver the work required for a specific contract,” he said. “This allows us to deliver efficient, targeted services to our clients.

“It is not uncommon for us to have over 75 subcontractors at one time helping us deliver our projects to multiple departments. At present, we are working with over a dozen government departments and 80 independent consultants under multiple contracts for distinct deliverables.”

In a 2018 Ottawa Business Journal profile, Mr. Firth and two other founding partners – Darren Anthony and Caleb White – said the idea for the company came to them over beers in 2015.

Mr. Firth is quoted as saying they help companies with federal procurement.

“The companies don’t know how to break into the federal government because there’s contracting and procurement minefields that just put everybody off immediately,” Mr. Firth told the OBJ. “We kind of come in to show the way.”

While neither the government nor GCstrategies discloses which subcontractors work on ArriveCan, the company does list some of its clients online.

The GCstrategies website says its clients include many major Canadian companies and global multinationals, including Google, Microsoft, Amazon, TD Bank, Adobe, Western Union, the CBC and the LCBO.

The company’s website says other federal files that it has worked on include the COVID Alert app, a project to modernize the Access to Information system using artificial intelligence, and a multichannel chatbot.

With data analysis from Mahima Singh in Toronto