Public servant denies fault in controversial ArriveCan contract, says she is ‘muzzled’ with job at risk
A key public servant named in the ArriveCan saga is denying involvement in developing the contracting criteria that “favoured” GC Strategies, and in explosive testimony on Wednesday told MPs she fears losing her job if she speaks the truth.
Diane Daly, an employee with Public Services and Procurement Canada (PSPC), testified before the House Public Accounts Committee on Aug. 7. Her testimony came five months after Kristian Firth, the managing partner of GC Strategies told MPs in April that Daly was the public servant he communicated with during discussions determining the contracting criteria that allowed his two-person IT firm to win the $25-million ArriveCan contract.
“I’m here to tell the truth, but I am very concerned that if I tell the truth here, I’m going to lose my job,” Daly told MPs in her opening remarks. She compared her appearance to that of sponsorship scandal whistleblower Allan Cutler.
“I’ve been muzzled for some time now,” she said.
Auditor General Karen Hogan’s scathing Feb. 12 report on ArriveCan found that GC Strategies was involved in the development of the Canadian Border Services Agency (CBSA) mandatory contracting requirements of the application. Hogan described these criteria to be “restrictive and narrow, which likely limited competition.” The firm was the only candidate to respond to the government’s call for proposals for the competitive contract and was thus awarded the $25-million contract. “That kind of involvement by an outside vendor in a competitive process should not happen,” Hogan told reporters back in February.
Daly, who worked at CBSA at the time, denied any involvement in this process or control over contracting decisions, despite Firth’s allegations that she was the person he was in contact with about these requirements.
“I do not recall discussing IT requirements with Mr. Firth… I did not provide advice on RFPs or technical requirements; only CBSA information technologies experts could do that,” Daly testified. “If Mr. First sent me any information, I would have forwarded it to the CBSA IT experts.”
Firth had disputed the auditor general’s and procurement ombud’s findings that the contract requirements “favoured” his company. But, he named Daly during his admonishment on April 17 when pushed to identify those he had communicated with about those requirements.
Daly told MPs that she worked at the CBSA from December 2018 to July 2023, assisting with procurement projects. She said her role in the agency was “administrative” and that her job was to “co-ordinate information from various stakeholders,” so that she did not have the expertise to guide Firth with any technical requirements that would favour his company.
Daly said she had “no idea” why Firth named her during past hearings examining the ArriveCan contracting. She told MPs that she never met with Firth in person but had communicated to him virtually during the pandemic. She also testified that she had never accepted any gifts or been invited to social gatherings by Firth.
Daly also claimed that between 2020 and 2022, her team at the CBSA raised several issues with the PSPC’s TBIPS (task-based informatics professional services) team regarding GC Strategies, including “very poor documentation, errors with submissions, and slow responses to resolving these errors.” Daly told MPs that her team requested that the $25-million RFP in the works with the firm be canceled, but that PSPC proceeded to award the contract.
“The $25-million contract was signed by an authorized PG-5 from the TBIPS team, not me,” Daly said. In the Canadian public service, a PG-5 is a level in the Program and Administrative Services (PG) group.
Daly told MPs that she was put on “administrative leave” from her role at PSPC on March 13, and that she had been notified by the PSPC’s Special Investigations Unit. According to Daly, her suspension took place shortly after she took a “security meeting” with the CBSA’s internal investigator on Jan. 15. She said that she was invited for an “optional” interview by the agency, which has been conducting an internal investigation into allegations of procurement misconduct.
Daly said she declined to participate in the interview twice in December 2023, citing a cancer diagnosis but said her superiors “insisted” she take the Jan. 15 meeting, which lasted three-and-half hours.
She also claimed that her superiors at the CBSA and PSPC pressured her to “give false testimony” against her former bosses. Daly said she did not agree with their “negative narrative” about former CBSA employees Cameron MacDonald and Antonio Utano. MacDonald is currently an assistant deputy minister at Health Canada, and Utano is a director general at the Canada Revenue Agency.
Both public servants have been suspended without pay and have had their security clearance revoked shortly after their testimonies in the fall of 2023, in which they accused their former CBSA superiors of providing misleading testimony to the committee. Their names appeared on contracting documents related to outsourcing work on the ArriveCan application, but they have denied any allegations of fraud.
When pressed by Conservative MP Larry Brock (Brantford-Brant, Ont.) on who is preventing Daly from speaking, she pointed to her superiors at the CBSA.
“You know… these are the people that are likely going to get me fired,” she replied to Brock’s question. When pressed further, she told MPs that she has email and audio to prove that she has been “intimidated” by her superiors.
Daly told the MPs that she never saw Utano and MacDonald act in a “nefarious” way. When asked, she said she had know knowledge regarding the allegations that Minh Doan, the federal government’s former chief technology officer, deleted “tens of thousands of emails” related to the ArriveCan app.
Daly said she has not heard from the RCMP about an investigation. She said she “absolutely” agrees with the auditor general’s findings on ArriveCan.
ArriveCan the ‘tip of the iceberg,’ says Bloc MP
After the committee meeting, Brock told The Hill Times the testimony raises more questions.
“It begs the question again, why anyone who wishes to speak truth to power ends up on the receiving line of a suspension,” he said. “Who is driving this ‘narrative’? Is it a minister? Is it a political official, or is it simply rogue senior officials? We need to explore any of those individuals who are involved.”
Bloc Québécois MP Nathalie Sinclair-Desgagné (Terrebonne, Que.) said MPs still don’t have a clear picture.
“There’s always bits and pieces missing. We can never get a full answer of what has actually happened,” she told The Hill Times after the committee meeting.
“The federal government needs a proper reform of its procurement system, and we can see that ArriveCan is just the tip of the iceberg,” she said. “We’re [Bloc Québécois] not going to get in the middle of the fight of [the] Conservatives’ witch hunt and the Liberals pretending as if nothing happened. We just want to make sure that taxpayers’ money is used adequately.”
Liberal MPs on the committee did not respond to requests for a comment by publication.
Conservative MP Garnett Genuis (Sherwood Park-Fort Saskatchewan, Alta.) moved a motion asking the committee to order the production of the recording Daly referred to in her testimony. The motion also called for the appearance of the government officials Daly mentioned in her testimony, including Firth, Daly’s former director-general at PSPC Lysane Bolduc, her former director at PSPC Tom Von Schoenberg, PSPC Deputy Minister Arianne Reza, and Erin O’Gorman, president of the CBSA. Daly committed to furnishing the committee with the audio and transcriptions she referenced. The meeting ran out of time before MPs could vote on the motion, and agreed to adjourn until Thursday.
The Public Accounts Committee has held more than a dozen meetings on ArriveCan since the beginning of the year. While MPs have repeatedly pressed the question of who hired GC Strategies, the answer was unclear.
Firth was admonished by the House Speaker on April 17. During his appearances in parliamentary committees, MPs found Firth evasive in his answers about his company’s contract for the ArriveCan app. He was repeatedly asked to identify the public servant with whom he was in contact over the the criteria for the contract. Firth eventually testified that it was Daly, a former CBSA official, during his testimony at the bar.
O’Gorman testified in May 14 at the Public Accounts Committee that Daly was “involved” with ArriveCan’s procurement process, but said she did not know whether Daly was part of CBSA’s internal investigation into the matter as a witness or the subject of investigation.
The procurement ombudsman’s Jan. 29 review into the application noted that the criteria for the $25-million contract were “overly restrictive and favoured” GC Strategies as an existing CBSA supplier.
The report indicated that the contract’s criteria required specific mandatory qualifications related to recent government experience, particularly work done under previous CBSA sole-sourced contracts. As a result, GC Strategies Inc. was the only bidder capable of meeting these stringent requirements, making it “highly improbable” for any other supplier to qualify.
The ArriveCan application was launched in April 2020 for international travellers to submit their COVID-19-related information electronically at border crossings. The emergency procurement of the app has been under scrutiny since the fall of 2022 due its soaring price tag, which Canada’s auditor general estimated cost $59.5-million.
GC Strategies was the primary contractor for the application, and received an estimated $19.1-million for its work, which did not involve the app’s actual development or maintenance. While the company’s co-founders deny any wrongdoing, their two-person IT staffing firm has been at the centre of a dozen independent probes including one by the RCMP.
The RCMP has been investigating the activities of GC Strategies, both in relation to the ArriveCan application and a separate project the firm worked on with a Montreal-based company called Botler AI. The two co-owners of Botler AI were the ones to come forth with allegations of misconduct against GC Strategies.
The AG’s report found little documentation to support how and why GC Strategies was awarded the initial ArriveCan contract through a non-competitive process. It also could not determine which agency official made the final decision to select GC Strategies.
Some of those probes are still underway including those led by the Information Commissioner and the Public Sector Integrity Commissioner, as well as an internal audit by the CBSA, which was the procuring agency for the app.
The Hill Times
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