They raised concerns about the development of ArriveCAN after witnessing shady subcontracting deals that lacked transparency about where federal dollars went.
Factions within the federal government were complicit in corruption, extortion, and “ghost contracting” during the development of Canada’s ArriveCAN app, two tech entrepreneurs testified during a government committee meeting.
“An act of misconduct rarely happens in isolation. It is almost always symptomatic of a larger existence and tolerance of misconduct,” Amir Morv, co-founder of software company Botler AI, told MPs in his opening remarks on Oct. 26. “Individuals engaged in such conduct are also prime targets of exploitation and extortion.”
The Standing Committee on Government Operations and Estimates (OGGO) is examining how GC Strategies, Dalian, and Coaradix received millions of taxpayer dollars to develop the ArriveCAN app, which was used by Ottawa to track the COVID-19 vaccination status of travellers visiting Canada.
The RCMP is also investigating the three companies behind the app, which critics have said could have been developed for a fraction of its $54 million cost.
Quebec-based Botler, which was acting as a subcontractor for the Canada Border Service Agency (CBSA), raised concerns about the development of ArriveCAN after witnessing shady subcontracting deals that lacked transparency about where federal dollars went.
According to the Globe and Mail, the CBSA gave the three companies behind the app more than $17 million in 2022, after it had received allegations of contracting misconduct on the ArriveCAN app.
‘Openly Engaged in Various Criminal Activities’
Mr. Morv and Botler co-founder Ritika Dutt told the committee private conversations they had with Kristian Firth, managing partner of the two-person company GC Strategies, after the CBSA encouraged them to work with him on a pilot project.
After CBSA Director General Cameron MacDonald urged them to work with GC Strategies, the pair discovered the contract for their work was being run through another company called Dalian, yet they weren’t informed. They said there was a lack of transparency about how federal money was being distributed to the companies.
Mr. Morv told MPs on the committee that vulnerabilities in the federal government’s procurement regime have been systematically exploited to funnel tax dollars into private entities that “lie outside of public purview.” He said the contractors are “openly engaged in various criminal activities” and “openly commit fraud on the government by promising influence and requesting material benefit” in exchange.
Mr. Morv alleged that Mr. Firth, one of two employees at GC Strategies, routinely boasted that he and his friends, who were senior government officials with contracting authorities, “had ‘dirt’ on each other, essentially guaranteeing silence through mutually assured destruction.”
He added that contractor misconduct would not be possible without “backing from factions within the government.” He said a part of the Canadian government “mobilized to bury Botler’s reports and protect this corruption” after it sent two reports to the CBSA.
Ms. Dutt told MPs that in December 2022, at the same time CBSA President Erin O’Gorman said she was considering sending the reports to the RCMP, her emails were hacked and “every record of an email that Kristian Firth sent me was mysteriously deleted.”
“We watched and waited patiently for someone to do the right thing and act on our reports. But instead, we were heartbroken as they lied. They lied to us. They lied to you at OGGO, they lied to Parliament, and they lied to Canadian taxpayers,” she said.
When Conservative MP Stephanie Kusie asked Mr. Morv to describe what ghost contracting was, he said GC Strategies, which received $11.2 million to develop the ArriveCan app, could be defined as a ghost contractor.
Essentially, ghost contracting is when a middleman is added to a government contract without any legal trace. That middleman does no actual work, yet makes a “significant amount of commission,” Mr. Morv said.
He added that while he had no information on whether the companies Coradix or Dalion—who received a combined $4.3 million to develop the app—also fit the definition, they hired ghost contractors to do work.
“They could have easily directly worked with us, but they chose to work with a ghost contractor to funnel the funds through this ghost contractor, who was GC Strategies,” the Botler co-founder said.
Conservative MP Garnett Genuis described the situation as a “horrific system of government corruption” that was “much bigger” than just ArriveCAN. “You’re describing a system in which government contracts go to preferred contractors, they claim to subcontract to others, who they claim do the work and they provide reports on this,” he said.
“But those subcontractors might not be doing the work. They might not know they’re being named. They might not even exist in some cases. And then this system allows those initial contractors to overbill taxpayers. Is what’s going on here?”
Mr. Morv replied: “In this case, the system encouraged the contractors to actually do this. That is correct.”