.jpg)
Much like the bankrupt crypto exchange FTX did after its collapse, the feds are embarking on a treasure hunt for vanished money.
Driving the news: The House of Commons passed a motion giving the prime minister 100 days to recoup funds paid to ArriveCan contractors who didn’t actually do any work on the app, which could impact about 76% of subcontractors hired, according to one estimate.
Catch-up: The idea behind ArriveCan was to streamline travel screenings during the pandemic. Travellers leaving or entering Canada were required to use it to upload documents like customs forms or vaccine records from November 2020 to the end of September 2022.
Concerns about how much taxpayer money was spent on this simple yet glitchy app resulted in a report by the attorney general. She guessed the total cost was maybe $59.5 million, but couldn’t offer much certainty owing to the worst financial record-keeping she’d seen in years.
- Much overspending likely stemmed from outsourcing the development of the app to the firm GC Strategies, which in turn subcontracted all of its work, plus commissions.
Why it matters: The ArriveCan scandal is perhaps the pinnacle of government dependence on outsourcing, particularly in IT, even as the size of the public service grows. This addiction has not only cost taxpayer dollars, but has hobbled the competency of federal departments.
- Government spending on private contracts skyrocketed by 74% between 2015 and March 2022, with billions going to firms like KPMG and, notoriously, McKinsey.
Bottom line: The ArriveCan boondoggle is far from over. Not only are Canadians not using it anymore — user rates fell by ~90% between January and April last year — but yesterday, it was revealed a company run by a federal employee received $7.9 million to work on the app.—QH