JOHNSON: Remember the ArriveCAN scandal? New ‘bait and switch’ report exposes systemic problem in federal procurement

Morrigan Johnson is an independent journalist based in Calgary. Canada's Procurement Ombudsman, Alexander Jeglic, revealed in October that the "bait and switch" tactics exposed in the $59.5 million ArriveCAN scandal are far from isolated. The House of Commons Standing Committee on Government Operations and Estimates (OGGO) held an in-depth hearing on October 21 where he briefed the Committee on the findings in the newly released report “Bait and Switch” with recommendations to improve contracting decisions.When Jeremy Patzer MP for Swift Current–Grasslands Kindersley questioned as to why “what appears to look like fraud” isn’t investigated by the RCMP, the response was still a non-answer. Whose job is it to actually investigate and press charges? .MCCRAE: Brodie vs. Chief Casimir in the Kamloops ‘mass graves’ controversy.In contracting for professional services, a bait and switch tactic refers to “resources” when a supplier proposes highly qualified staff in their bid to increase their chance of winning the contract, but after being awarded the contract, they replace those proposed resources with less qualified or lower quality. The outcome also suffers in value for money. Departments reviewed by the report include the Employment and Social Development Canada (ESDC), Global Affairs Canada (GAC), Immigration, Refugees, and Citizenship Canada (IRCC), National Defence (DND), Shared Services Canada (SSC), and Public Services and Procurement Canada (PSPC). The PSPC had requested that the Ombudsman remove a section of the report while being investigated by the same report. This request later became an included part of the report for the purposes of increasing transparency and consequence..The report examined 24 procurement files from six federal departments between May 2022 and October 2024, finding that 41% to 53% of the contracts used replacement resources in a bait and switch pattern, with many substitutions failing to meet or exceed the original qualifications that won the contract. The major problem highlighted in the ArriveCAN scandal, originally estimated at $80,000, ballooned to $59.5 million, was that 76% of applicable resources proposed by the successful supplier in their bid did not perform any work on the contract. The average daily cost for ArriveCAN external resources was $1,090, whereas the average daily cost for equivalent IT positions in the Government of Canada was $675. It wasn’t just a failure to deliver a final product of value, but the price for doing the job was nearly double what it was worth. From the hearing, when asked which departments had the most problems, Alexander Jeglic mentions "... I can say that three were through GAC and three were through Shared Services. GAC, Global Affairs Canada, and Shared Services Canada were the two highest departments." From the testimony, the Ombudsman was careful about using the words corruption or fraud, suggesting that without the presence of intent, the key problem is more likely to be incompetence in government. .McTEAGUE: From backroom deal to boondoggle: This is no way to build a pipeline.While the Department of National Defence does not suffer from the bait and switch problem in the supply chain covered by this report, they have their own unique set of catastrophic security risks and conflict of interest problems, such as David Yeo and Dalian Enterprises, who were caught up with ArriveCAN. The MacDonald Laurier Institute has said that Canada’s military procurement is the worst in the Western World. "This undermines the entire competitive bidding process," Procurement Ombudsman Alexander Jeglic stated. "If Supplier A wins because they propose better-qualified individuals than Supplier B, but then substitutes less qualified people, Supplier B should have won." Competition doesn’t exist in a bait-and-switch environment. The ArriveCAN case exemplifies the problem. GC Strategies amounted to a two-person basement operation who received $19.1 million for the border app despite performing no actual IT work, simply taking 15-30% commissions while subcontracting everything. The company's managing partner, Kristian Firth, became the first person in over 100 years to be found in contempt of Parliament for refusing to answer questions about how contract criteria were developed..Auditor General Karen Hogan called ArriveCAN "the worst financial record-keeping I've ever seen," with the actual cost "impossible to determine" due to destroyed documentation. The app, originally estimated at $80,000, ballooned to at least $59.5 million, a 750-fold increase.The scandal extends beyond one app. Three firms connected to ArriveCAN are GC Strategies, Dalian Enterprises, and Coradix, who received over $1 billion in federal contracts since 2015. Dalian's president, David Yeo, was simultaneously employed by the Department of National Defence while his company received DND contracts, creating what internal reviews called a "high security risk" conflict of interest..SLOBODIAN: Is Canada secretly preparing for World War III? Inside the ‘three-to-five-year’ war warnings, shocking the military.Meanwhile, McKinsey & Company saw contracts jump from essentially zero under Harper to $209 million under Trudeau, with 70% awarded sole-source. The Procurement Ombudsman found a "strong perception of favoritism" toward the consulting giant.The financial toll is immense. Beyond ArriveCAN's $59.5 million, the Phoenix pay disaster has cost $5.1 billion to date. COVID procurement saw $32 billion in benefit payments either confirmed ineligible ($4.6B) or flagged for investigation ($27.4B), plus $720 million spent on ventilators that were 98% unused. The CRA then had to resort to legally going after regular Canadians to recoup billions due to the government’s incompetence. .Yet accountability remains elusive. No senior official has faced criminal charges despite the RCMP conducting "more than half a dozen" active investigations into federal contracting. Cameron MacDonald and Antonio Utano — two CBSA officials who testified that their superior "completely lied to Canadians" about ArriveCAN — were suspended without pay, while the superior they criticized, Minh Doan, who worked as the Vice-President and Chief Information Officer at the Canadian Border Services Agency (CBSA), was promoted after the scandal to Canada's Chief Technology Officer.In her June 2025 report 4 on GC Strategies, Auditor General Karen Hogan made no new recommendations. "The rules exist," she noted. "Federal organizations need to make sure they are understood and followed." After a decade of scandals totaling tens of billions in waste, the fundamental question is whether anyone will enforce them..MORGAN: Alberta unions declare war on direct democracy.When MP Jeremy Patzer asked the obvious question, “Isn't this fraud?” The Ombudsman's answer was fascinating. The Ombudsman’s office isn't allowed to make that determination.That's for the RCMP. But when pressed on whether he'd contacted the RCMP, he said he was “open to a meeting” if they showed interest. This is the bureaucratic equivalent of watching someone walk out of a store with unpaid merchandise and saying “Well, we can't prove they intended to steal — maybe they just forgot to pay 76% of the time.” At this rate, how do the problems get solved, if at all? Morrigan Johnson is an independent journalist based in Calgary.

JOHNSON: Remember the ArriveCAN scandal? New ‘bait and switch’ report exposes systemic problem in federal procurement

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