Auditor general to investigate all government payments to ArriveCan contractor GC Strategies

Canada’s Auditor General to Audit Contracts Related to GC Strategies Amid ArriveCan Controversy

Canada's Auditor General, Karen Hogan, announced that her office will conduct a comprehensive audit of all government contracts awarded to GC Strategies, the company involved in the ArriveCan issue.

In a letter addressed to the House of Commons on Monday, Hogan confirmed her office's plan to review contracts granted to GC Strategies, its predecessor Coredal, and other companies established by the two co-founders. The audit will also include an examination of related subcontracts.

"We are in the process of gathering information that will allow us to properly scope and plan the audit," Hogan stated in her letter to Speaker Greg Fergus.

Hogan's letter was a response to a request from the House government operations committee, which, along with other parliamentary committees, has been investigating GC Strategies following the launch of the ArriveCan project. The app was introduced during the pandemic as a communication and screening tool to ensure that travelers arriving in Canada adhered to pandemic border measures. It subsequently evolved into a platform for travelers to present their vaccination status and is still used for filling out customs forms before entering the country.

In her March report, Hogan noted that the heavy reliance on contractors was a significant factor contributing to ArriveCan's escalating cost of $59.5 million, although she indicated that this figure is only an estimate due to inadequate record-keeping related to the project.

Hogan estimated that GC Strategies received $19.1 million for its involvement in the project, a figure that reflects payments made to the company up until March 2023. Canada's comptroller general informed the House public accounts committee in March that GC Strategies and Coredal have been awarded a total of 118 contracts worth $107 million since 2011.

Hogan's report on ArriveCan highlighted a lack of documentation explaining why or how GC Strategies was selected for the project. The company, a two-person consulting firm, marketed itself as an entity capable of guiding businesses through the government's procurement process.

In April 2020, GC Strategies was awarded a sole-source contract despite insufficient evidence that the firm submitted a proposal for the project, according to Hogan's report. She noted that at least one other company had submitted an initial proposal for the same contract.

Furthermore, Hogan found that GC Strategies played a role in developing requirements that were subsequently used for a competitive contract. This contract, valued at $25 million, was eventually awarded to GC Strategies.

A separate report by Alexander Jeglic, Canada’s procurement ombudsman, indicated that the criteria used in granting the $25 million contract were "overly restrictive" and "heavily favoured" GC Strategies.

Kristian Firth, one of the partners at GC Strategies, has contested some of Hogan's findings during committee appearances.

Additionally, the RCMP is investigating GC Strategies and conducted a search of Firth's home office in April. Firth stated that the search was not related to ArriveCan but pertained to allegations involving Botler AI, an IT firm that did not work on ArriveCan but had been hired for a different project through GC Strategies and other firms.

Botler co-founder Amir Morv informed the government operations committee last year that his and his partner’s resumes were altered without their consent or knowledge for a government task authorization.

Firth testified before the committee that his company modified the resumes prior to submission to the government and described it as a mistake.

Morv also suggested that GC Strategies may have engaged in "ghost contracting," a scheme in which a company bills the government for work attributed to subcontractors who may not have actually completed any work.

Both Firth and GC Strategies have denied these allegations.