Indigenous Services Minister Patty Hajdu responded at a press conference on February 10 on Parliament Hill in Ottawa.Sean Kilpatrick/Canadian Press
Indigenous Services Minister Patty Hajdu said the federal government is reviewing programs to support Indigenous contractors, citing concerns about its use by the companies that developed the ArriveCan app.
While much of the attention on AliveCan has focused on GCStrategies, a two-person IT staffing firm that received $19.1 million to develop an app for cross-border travelers, there are also concerns about Dalian Enterprises, which received $7.9 million. It has been stated.
Dalian bills itself as an indigenous-owned company and regularly wins federal contracts under procurement programs that promote indigenous business. Dalian also said it only had two employees. They often operate in joint ventures with Coradix, a large company that does not advertise itself as indigenous.
Dalian and Koradix have received more than $400 million in federal contract work over the past decade.
Indigenous organizations have expressed concern about this type of arrangement, warning it could encourage “imaginary joint ventures”.
“It’s actually really complicated because it’s actually difficult in some cases to define who is Indigenous,” Hajdu told reporters on Tuesday. “We are working with our Indigenous partners to think about better ways to hand over management of the list to them, perhaps at some point.”
GCStrategies, Coradix, and Dalian follow the same business model. A small team wins a federal contract and then finds subcontractors to do the work. GCStrategies said it maintains commissions of 15-30% of the contract value.
After receiving questions about Dalian and Koradix from the Globe and Mail late last year, federal procurement officials asked Indigenous Services Canada to audit the companies.
Federal officials told the Globe that Dalian and Koradix have not been audited to determine whether they meet the requirements of the program to support indigenous entrepreneurs.
Ministry spokesperson Anispiragas Piragasanatar told the Globe in December that the audit was ongoing but the results would not be made public because they “contain commercially sensitive information.”
In 2021, the government announced that the City of Ottawa will fully phase in rules ensuring that all departments award at least five per cent of total federal contracts to Indigenous businesses by 2024.
To help achieve this goal, Ottawa has a long-standing program that allows Indigenous businesses to partner with non-Indigenous businesses, provided the Indigenous business has at least 51 per cent ownership and control of the joint venture. You can qualify through a joint venture. At least 33 per cent of the total work will be performed by or using Indigenous subcontractors.
Ms. Hajdu has served as Minister of Indigenous Services since October 26, 2021. She was Minister of Health at the beginning of the pandemic when the ArriveCan app was launched as a joint project between the Public Health Agency of Canada and the Canada Border Services Agency. It was then fully transferred to the CBSA.
Discussion in the House of Commons and some parliamentary committees continued Tuesday to be dominated by fallout from this month’s ArriveCan report by Auditor General Karen Horgan, which found that Ottawa has revealed that it spent approximately $59.5 million on contractors.
RCMP Commissioner Mike Duhem was asked at Tuesday’s committee meeting whether the RCMP was investigating ArriveCan.
“Based on what I’ve heard about ‘arrival fraud’, is there going to be an investigation?” asked Conservative MP Michael Barrett.
“I can confirm that the investigation is ongoing. And I’m not going to comment because it’s ongoing,” Commissioner Duhem said.
The RCMP’s media relations team subsequently clarified that the force is still assessing the auditor general’s report to determine whether further action is warranted.
The Globe first reported in October that RCMP were investigating allegations of contract irregularities at the CBSA. These allegations involved companies such as GCStrategies, Dalian, and Coradix, while he was working on ArriveCan, but were related to another of his IT projects.
The allegations were raised by Montreal software company Botler.
The work was funded through a major subcontract linked to a $21.2 million “information professional services” contract with Dalian (entered out under the Indigenous Savings Program). This agreement was also used to fund the work of the ArriveCan app.
Indigenous leaders are questioning how Ottawa is administering funds for Indigenous businesses.
2021 Survey report The Indigenous Business Council of Canada called on the government to address “predatory practices” with set targets.
“Imaginary joint ventures that use Indigenous partners as a front for non-Indigenous companies to obtain cancellation contracts undermine the integrity of Indigenous procurement policy,” the council report said.
After the release of Hogan’s report, the Public Services and Procurement Agency of Canada said in a statement that GCStrategies was no longer eligible to participate in government tenders. In November, the CBSA announced it was suspending all contracts with three IT staffing companies.
The House of Representatives on Monday unanimously approved a formal subpoena ordering GCStrategies partners Christian Firth and Darren Anthony to appear before the Government Operations Committee within 21 days.
If they fail to appear within the time limit, the motion states that the sergeant-at-arms will “detain Christian Firth, Darren Anthony, or both, as the case may be, for the purpose of enforcing their attendance.” Committee.
GCStrategies has previously testified twice before the Government Operations Committee as part of its investigation into ArriveCan and broader contracting issues.
During his last court appearance in November, Firth admitted to submitting inflated invoices as part of the federal procurement process related to the bottler project. This is a unique event, he said. However, Procurement Ombudsman Alexander Yeglic’s report on ArriveCan found that GCStrategies “simply copied the required work experience listed by the government on a points grid to describe the skills and experience of subcontractors proposed by the government.” Found “numerous examples” of “&paste”.
Firth and Anthony failed to respond to summonses in December, citing mental health issues.
The House of Commons spent the day following a lengthy motion by Conservative leader Pierre Poièvre calling on the government to recover and recover all funds paid to ArriveCan contractors, which “did nothing for the ArriveCan app.” was discussed. It also called on the government to produce an extensive document.
