Opposition to press for public hearings on federal outsourcing after CBSA allegations

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Opposition MPs say they will push to hold new public hearings on federal outsourcing after The Globe and Mail reported that both the RCMP and the Canada Border Services Agency have launched investigations into allegations of misconduct.

The MPs say their concerns include the fact that former CBSA president John Ossowski told the government operations committee in December that he had never met GCStrategies managing partner Kristian Firth. However, The Globe reported this week that he and Mr. Firth both attended a virtual meeting in September, 2020, during which a pilot project was approved that ultimately led to the misconduct allegations.

Conservative MP Stephanie Kusie and NDP MP Gord Johns both told The Globe Thursday they will move motions in favour of new committee hearings when Parliament resumes after the Thanksgiving recess.

“We have to get to the bottom of what happened,” Ms. Kusie said.

Ms. Kusie and Mr. Johns are both members of the government operations committee, which has nearly completed a study of federal spending on the ArriveCan app. The Globe first reported last year that the cost to build and maintain the app was on pace to exceed $54-million. The Conservatives and NDP will seek to extend the ArriveCan study to include a review of the new allegations, brought forward by a software company called Botler.

The allegations point to cozy relationships between private firms and public servants and concerns over improper contracting.

Scheduling new hearings would require the support of one other party on the committee. The Liberals and Bloc Québécois did not respond to a request for comment.

The misconduct allegations relate to a project to implement Botler’s software to support victims of sexual harassment, but its funding traces back to a $21-million contract that was also used for ArriveCan. Botler’s allegations relate to three IT companies that were among the top recipients of outsourcing funding for ArriveCan: GCStrategies, Coradix and Dalian.

Ms. Kusie said she will push for the study to call Botler co-founders Ritika Dutt and Amir Morv – whose allegations led to the CBSA and RCMP investigations – as well as the key public servants and IT consultants they interacted with as part of the contract work.

This would include calling Mr. Firth and Cameron MacDonald, who had contracting responsibilities at the agency and who directed Botler to work through Mr. Firth, according to an audio recording that Botler provided to The Globe. Mr. MacDonald is now an assistant deputy minister at Health Canada.

The Globe reported that Mr. MacDonald provided suggestions to Mr. Firth and Botler as to how they should pitch their product to Mr. Ossowski. During that meeting, which took place in September, 2020, Mr. MacDonald was providing real-time advice to Mr. Firth via text messages as to how Botler should be presenting to Mr. Ossowski.

Mr. MacDonald has denied any wrongdoing. GCStrategies, Coradix and Dalian have not responded to requests for comment.

In a Dec. 8 hearing, Mr. Ossowski was asked by Conservative MP Michael Barrett about his time as CBSA president: “Did you have contact with Kristian Firth of GC Strategies in that role?” Mr. Barrett asked.

“No,” Mr. Ossowski replied.

“Do you have any familiarity with GC Strategies?” Mr. Barrett also asked.

“I have none,” he said.

Mr. Ossowski, who is now managing director at PWC, told The Globe in a statement that he was retired from the agency when he spoke to the committee in December and no longer had access to his work records. He also said he does not remember meeting Mr. Firth and the meeting in question was not about ArriveCan.

“My answers to the committee were in the context of their review of the ArriveCan App and since I had no recollection of meeting anyone from GC Strategies on ArriveCan, I didn’t feel it necessary to check back with the department to validate my answer,” Mr. Ossowski told The Globe.

Mr. Johns, the NDP MP, said more hearings are needed before the committee can finalize its ArriveCan report.

“You’ve got this awarding of contracts that seems unfettered and out of control and a lack of regulations and safeguards for taxpayers,” Mr. Johns said.

Ms. Dutt and Mr. Morv told The Globe they were shocked to discover that after interacting with GCStrategies and Mr. MacDonald for months, the funding for their software was approved through an agency contract with another company – Dalian – without their knowledge. Dalian often works in joint venture with Coradix.

They said they later discovered that Coradix had submitted forms to the agency about their work experience without their knowledge or permission. They said Thursday they are willing to co-operate with a committee study.

The federal government announced new contracting rules Thursday that urge managers to consider whether their actions will “stand up to public scrutiny” before they sign off on outsourcing deals with private sector companies, but critics dismissed the announcement as a public relations exercise aimed at deflecting criticism of the government’s approach to outsourcing.

Treasury Board president Anita Anand announced the new “Manager’s Guide” for procurement officials Thursday, which is part of her effort to find $15-billion in internal savings over five years.

Allan Cutler, who teaches procurement policy at Algonquin College and who was a key federal public service whistle-blower in the sponsorship scandal of the mid-1990s, said he questions the need for new rules.

“They don’t need a new manual. They have a good manual. They just have to follow it,” he said.

Mr. Cutler said that what stood out to him in The Globe’s reporting related to outsourcing was the heavy use by government of subcontracts to obtain services. By turning to subcontracts tied to existing contracts, the details of what the federal government is purchasing and who is receiving payment are kept from public scrutiny.

Subcontracting can also be a way of sole-sourcing work to avoid a public competition.

“What really bothered me in this is the subcontract – burying something in a subcontract which probably should have been bid separately,” he said. “Just reading about it, I would tell you the smell factor seems pretty strong.”