PACP Committee Meeting
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Standing Committee on Public Accounts
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EVIDENCE
Tuesday, March 19, 2024
[Recorded by Electronic Apparatus]
[Translation]
Good afternoon. I call the meeting to order.
Welcome to meeting number 109 of the House of Commons Standing Committee on Public Accounts.
[English]
Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely using the Zoom application, including today's witness.
All comments should be addressed through the chair.
[Translation]
Pursuant to Standing Order 108(3)(g), the committee is resuming consideration of report 1 of the 2024 reports of the Auditor General of Canada, entitled “Report 1: ArriveCAN”, referred to the committee on Monday, February 12, 2024.
[English]
I would like to welcome our witness.
David Yeo, business owner, is joining us, as I've said, by video conference.
Mr. Yeo, I appreciate you making yourself available to us today. As discussed with the clerk, you have an opening statement of up to five minutes. Please go ahead.
I would like to start off by saying thank you, Mr. Chair and honourable members of the committee.
This land that we gather on today is the traditional, ancestral and unceded territory of the Anishinabe Algonquin Nation and is now home to many other first nations, Métis and Inuit peoples.
I am a descendant of treaty-signing chief Robert Franklin, who is my great-grandfather and was past chief of Alderville First Nation. He was also a World War I veteran. I hold the Alderville First Nation community near and dear to my heart, as this is what forms my indigenous ancestry. I have family who live there and my father is also buried there next to my great-grandfather.
I, too, am an indigenous veteran. I served in the Canadian army for 14 years, from 1987 to 2001. Following this, I joined the Canadian Armed Forces reserves for another 10 years, from 2001 to 2011.
From September 1991 to February 1992, I was deployed to Cyprus as part of a UN mission with the 2nd Battalion, The Royal Canadian Regiment. I was a C9 machine gunner and driver along the front lines for six months.
From August to November 2010, I was deployed to Afghanistan as a contractor for the Department of National Defence to deliver a high-assurance security capability to Kandahar. We also went outside the wire to all the forward operating bases as well. I received a Command Commendation for my contribution to Task Force Kandahar.
I am a tactical security specialist, with expertise and certifications in high-assurance guarding technologies for the Canadian Armed Forces on both mobile platforms and specialty areas within the CAF.
In 2002, I founded Dalian Enterprises, which is a hardware and software cybersecurity company. The Government of Canada is Dalian's primary customer.
From 2002 until September 2023, I was not an employee of the Canadian government in any capacity, but a contractor providing IT professional security services through Dalian to the Department of National Defence.
Since 2002, Dalian has been regularly audited by Indigenous Services Canada to confirm compliance with all requirements of the procurement strategy for indigenous business. The company has passed every one of them, including one just recently in February 2024.
The PSIB is designed to help indigenous entrepreneurs like me start and grow a business by providing them access to procurement opportunities from the Government of Canada, either directly or through partnership. The PSIB has been successful in helping many indigenous-owned companies, including Dalian, to launch, grow and prosper.
In late September 2023, long after the completion of all work on ArriveCAN by Dalian, my professional relationship changed with the Department of National Defence. It changed from that of a consultant providing IT professional security services to a public service employee with the PIPSC union. That happened on September 19, 2023.
Due to this change, I took steps to address any conflict of interest concerns by entering into a confidentiality, non-disclosure and no-access agreement with Dalian, in which I agreed to refrain from participating in any Dalian proposals, projects, contracts, ventures or any other activity relating, directly or indirectly, to the Department of National Defence.
Since becoming a public service employee of National Defence, I've honoured that agreement. I have not been involved in any management or operations at Dalian and have not had access to Dalian confidential information of any kind.
I also made the appropriate conflict of interest filings with the Department of National Defence, resigned as a director and officer of Dalian and put my Dalian shares into a blind trust.
Unfortunately, no one from the media ever contacted Dalian or me before publishing reports late in February that suggested that I was a public service employee for decades. This resulted in an unfounded allegation at DND that I was in conflict of interest.
I understand that DND has now made a statement that there was no conflict of interest, but I had already made the choice and resigned from the public service after just 168 days, mostly due to this very difficult situation.
Even more disappointingly, no one from the federal government had ever contacted Dalian or me before undertaking the unfounded action of terminating all contracts with Dalian—hardware and software, and professional services—suspending security clearances, suspending Dalian and Coradix from continuing current work and competing for future opportunities with the Government of Canada, their primary customer for 22 years and 29 years respectively. This all happened within 48 hours, without due diligence or, in our concept, due process.
There has not been a single review, investigation, audit, report or study that has indicated Dalian or Coradix did anything wrong or illegal during ArriveCAN or the ArriveCAN project, or any other government project that we've been involved with.
Despite this and as a result of these unfounded terminations and suspensions, hundreds of employees and consultants are already out of work, or soon will be, from both companies. Neither company has done anything wrong or different for the past two and three decades of working with the federal government.
Thank you, Mr. Chair.
Thank you very much. That went a little over time, people might recognize, but I did want to give you an opportunity to get your words on the record.
Okay. I'll circle back to that.
On what date were you first employed in any capacity with the Government of Canada, including in the Canadian Armed Forces?
Have you been employed by any other departments other than as a regular reserve member of the Canadian Armed Forces and the Department of National Defence?
In the documents that the committee has received it says that the department signed a contract with you on that very same date. I find that interesting that on September 19, 2023, you were awarded both a contract and a job in the public service.
Does Dalian have contracts that are current with the Government of Canada?
No, we are not. We have been suspended from all security clearances, obviously, pending this discussion and other discussions that are ongoing. All of our contracts have been terminated. By virtue of that, there is no ability to execute....
That is a really good question.
From a professional services standpoint, I would actually have to get back to you on that. From a hardware and software perspective, we have four or five we use.
Sir, if you're going to get back to us with the number, can you also provide the committee with the names of those subcontractors?
Perhaps you could note that for us, please, Chair.
The Chair: It's noted.
Mr. Michael Barrett: Was GC Strategies ever a subcontractor of Dalian?
Again, I spent a large portion of my time with the defence department, whether it was my 168 days as a public servant or my consulting time at the department. To answer your question, the obvious answer is yes, but on the aspect of their working with us, I'd have to get more detail for you.
Okay. Thank you.
We know, of course, that they were. I appreciate your indicating an even tertiary awareness of it. They were caught not following security requirements for government contracts.
For all of your contracts with the government, knowing that GC Strategies did not meet security requirements, are you able to guarantee the security of all of the contracted work that you have done with the Government of Canada?
Again, the short answer would be yes, because we are ISO certified in our processes. A large part of this happens to be with our...as a prime contractor with the federal government, whether it's an aboriginal set-aside contract or not, because we've had both in the past. I would say in retrospect to that, if they have some misgivings on their security clearances, that would be tracked through, and we should have an awareness of that at our own security shop. I've never been told of any issues with the security clearance side of things with GC. Again, I've just been read into this file over the last number months, and it hasn't come up as an issue.
Are you aware of the reports I'm referring to where GC Strategies did not follow the security requirements for contracts with the Government of Canada?
Is that something you've been aware of prior to my speaking of it with you just now?
No. You'd have to give me more details on the actual security requirements that were not followed, because I'm not aware of any.
Have you or your partner at Dalian ever provided any hospitality to any Government of Canada employees?
Have you or your partner at Dalian ever met with government employees outside of government offices?
I know I have not. This is not something that is even remotely looked at from an internal perspective, but as far as I'm aware, no.
I would assume yes to that question. Obviously, there was a subcontract that was put together for the CBSA for this effort. I would imagine there would have been dialogue that would have had to have happened, yes.
You stated previously that you are constantly audited to ensure you're eligible for the indigenous set-aside when winning bids as a joint venture with Coradix.
Who is conducting these audits, and when was the last audit done?
The audits are done by ISC, which is Indigenous Services Canada. The last one was done in February 2024, just a few weeks ago.
I started the company in 2001-02. We won our first contract within the first year, so shortly after that.
I'm very much two gates deep at DND in what I do, or what I did at the department before I had to resign after 168 days. The upshot is that when it comes to ArriveCAN, and I've been read into the file now and have been for a while, the aspect of revenue, from what I understand, is $4.9 million. That's basically $1.6 million per year for the three years the contracts were open. From what I understand, that went through a staff augmentation contract at the CBSA, so it wasn't actually an ArriveCAN app, it was a directorate or a department level standing offer through TBIPS, or, in this case, BASD. From my understanding, that's the staff augmentation contract that was used to facilitate this. It was 20 contractors for three years for approximately 100 days per year, which is basically part-time.
I don't have a personal relationship or a professional relationship with GC. I mean, from my understanding and getting read into the file, it was part of the communication from the CBSA that there was a task authorization coming that needed to be fulfilled through GC. As a prime contractor and a general contractor for that contract, we facilitated that. That was basically my interaction with GC, which was nil. I haven't spoken to any of the principles. I've just been read into the file, and this is what I know.
As far as Coradix is concerned, it's a much different relationship. I've been with it since 2001-02. I first started this company from Barrhaven on my kitchen table. Going after the first indigenous contract that I was awarded in the first year with the RCMP and Bell Canada was to provide hardware to the RCMP.
Obviously, being one guy trying to start a business, I partnered with Coradix, because I know some people. We've had a very good relationship since then. It's been a shared services model between two companies. Coradix does much different work than we do at Dalian as far as security is concerned, so it seemed like a good fit. It's been a 22, 23-year relationship with Coradix, yes.
I'd like to hear, in your view, the timeline of the events. We've been talking about various dates already in this meeting. What is the timeline of events that has led us to this point?
Again, I'm buried two gates deep doing high-assurance security, trying to get it out to our war fighters, so getting right into this file was probably my first shot, back in October of last year, realistically, when we got the notification that we needed to go and talk to OGGO. From a timeline perspective, that's where I sit, from getting right into the file.
However, after gaining some knowledge on it, my understanding is that this goes back to 2019. We had a very good contract with the CBSA, a staff augmentation contract through PSPC, and we were doing some good things over there. The intent of the CBSA was actually to bring over 25% of its server applications from the CBSA on-prem to the AWS cloud. I think that's where it started in 2019.
Then, obviously, in the early 2020s, we had this whole COVID-outbreak thing happen and all of this craziness that happened with the ramp-up to getting ArriveCAN out the door. We were a small part of that; we were $4.9 million of that—$1.6 million per year and 20 part-time contracts. From that perspective, that's where I think it started.
When it finished was May 2023, from what I understand, and that was certainly well before I started with the public service.
Have you spoken to anyone else on this issue, to anyone who has been looking into the matter—for example, the Auditor General?
No, I have had no interaction with the Auditor General at all, other than I know that our staff noticed the discrepancies within the Auditor General's report. They notified the Auditor General on January 30 of this year of the discrepancy, that it wasn't $7.9 million but $4.9 million, but that never made it into the report.
You mentioned discrepancies in the report. You just mentioned one of them. Are there any other discrepancies that your staff or you have noted in the report that you brought to the attention, or plan to bring to the attention, of the Auditor General?
As it sits right now, I have read the report. I am a certified contract and procurement specialist. That's what I did for my first 100-some-odd days with DND, and I've been around contracting forever, so I understand it completely.
What I can say out of the gate is that when I read through the Auditor General's report, I see that it's a good report, but it has vagaries and discrepancies in it. There is incorrect information in it. One of those incorrect areas is in our revenue stream because $7.9 million is not $4.9 million, and $4.9 million is not $7.9 million. There's a $3-million difference, and it's a 60% delta. From that concept right there, it's definitely a different aspect.
The other side of it is that, under “Findings”, there is a paragraph in there that says, “We found that 18% of invoices submitted by contractors that we tested did not [provide enough information] to determine whether expenses related to ArriveCAN or another information technology (IT) project.”
I have a good number of notes on this. I've gone through the entire thing. I have a lot of questions and things like that.
Thank you, Mr. Chen. That is your time.
[Translation]
Ms. Sinclair‑Desgagné, you have the floor for six minutes.
[English]
Apparently there is a globe on the bottom of your screen. If you click on that, it will probably give you interpretation.
[Translation]
[English]
[Translation]
Thank you, Mr. Chair.
Mr. Yeo, I have a quick first question: How many employees does Dalian have and what is its employment history since 2008?
[English]
We had, I believe, up to seven or eight full-time employees during the 2008 to 2012-13 time frame. The reason behind that, obviously, is that we were growing. That was a good time for us, but SSC came in during the 2012-13 time frame and changed a lot of our abilities to execute with the government. Therefore, there was a lot of downsizing after that, and a lot of consolidation.
We've now moved down, as a matter of fact, to two full-time employees. However, where this gets off the rails is..... Because we have a partnership with Coradix, we have a shared services model. We were doing shared services before Shared Services became a thing.
[Translation]
Okay. Thank you, Mr. Yeo.
According to the timeline provided to us by the Department of National Defence, you started your job on September 19, 2023, and a contract was signed on September 28, 2023. Only nine days later, you signed a contract while you were a full‑time employee of the Department of National Defence.
Mr. Yeo, I would like to draw your attention to the fact that, when public servants take up their positions, they must comply with the Values and Ethics Code for the Public Sector. The code states very clearly that you must declare any appearance of a conflict of interest to a superior. Did you do so on September 28, 2023?
[English]
Again, being buried two gates deep in DND in what I do with hired security there.... Also, on the 19th and even prior to that, I started to devolve myself from the company. I gave the ability for...as I was moving through the aspects of divestiture with my lawyers and everything else. It took some time. I will agree. That timing is not charitable to your timeline of only a few days.
However, the short answer is this: No, I did not inform anyone at the department that I signed anything. Then again, I did not actually sign it. I had a signature available for the staff at the office to use after the 19th—
[Translation]
Sir, you know very well that in court, a signature has legal effect. If your signature was put to a contract by someone else, you are responsible for it. I hope you are aware of that, because you are responsible for the contract that was signed on September 28. It's your signature, so you're accountable.
Apparently, you did not inform a supervisor that there was at least a very strong appearance of conflict of interest.
We learned through the newspapers that, according to the Public Accounts of Canada, Dalian had received nearly $150 million in total for contracts since 2008. I understand that there are subcontractors. The fact remains that, for a company that has had at most 10 employees, that's a lot of money.
Why did you accept a position that paid less than $100,000 with the Department of National Defence when your two-person company had made $150 million in a few years?
[English]
That's a good question, and I appreciate it.
Yes, we had some great years between 2008 and the run-up to Shared Services. We had some pretty lean years between 2013 and now, basically, from a hardware-software perspective, for sure. You know, my reasoning for getting back into the department was not based on money. I did 36 years with the department in varying capacities, whether regular forces, reserves or by contracting time plus my 168 days as a civil servant.
However, I got back in primarily to drive capability and high-assurance guarding solutions towards the war fighters who are in harm's way on the eastern flank of NATO. That was my job there. That was my claim and what I did at the department. Because I was there for so long, I understood it, and I was at the pinnacle of my technical abilities. It made sense for me to get in and drive technology down to the war fighters who need it the most.
That's primarily the reason, because I didn't do it for the money.
[Translation]
During that time, a contract was nevertheless awarded to Dalian by the Department of National Defence to carry out work, and that contract was signed by you.
How many hours of work did you do? How many hours of work did Dalian carry out on the last contract I mentioned, the one signed on September 28, 2023? What work did Dalian do on that contract?
[English]
Again, I got right into that part of it just recently because it was a very small contract. I think it was $40,000 or maybe $49,000, from what I'm aware of, but it was attached to a hardware—
[Translation]
The average annual salary of a Quebecker is $40,000. That is not a “small contract”. If I were you, I would choose my words carefully.
[English]
Yes, but 75% or 80% of it goes back to the consultant doing the work.
To answer your question, though, there is precedence for how you handle conflict of interest within a 60-day period or windows of that time frame, and I did put in a no-access, no-contact, no non-disclosure with Dalian within that 60-day period. I signed that on November 10, 2023, which was within the 60-day window.
After that, we were working with lawyers and getting our stuff together as far as forms and everything were concerned, getting my divestiture done and that sort of stuff during the time frame, and that has already been submitted to DND as well, but, due to the hype and everything else around this particular ArriveCAN app, I ended up having to put in my resignation. I was still on probation because I was only there for 168 days.
[Translation]
Thank you very much, Mr. Chair.
I want to thank the witness for being with us today. It's a very important topic.
My colleagues asked some questions, but I'll have you reiterate some of the responses you gave in relation to the origin of your company.
When did your company start under the name Dalian?
Well, I started it myself in 2001-2002. I don't have the exact date on me, but there are documents that stood up the company at that time, and I named the company myself.
It was very shortly thereafter. I was talking with Terry Matthews here in town at a breakfast meeting, and he mentioned to me that I should go after indigenous business because that was something he was aware of.
At that point I looked into it, and I found an indigenous contract that I could go after, and I won it within the first year that I started the company.
It was only one person then, because it was from my dining room table in Barrhaven, but we have grown.
It grew in 2008 to 2010 to 2012, and then we've obviously contracted a lot because our hardware business has all but dried up. We still do some professional services.
From 2015 until now, we have had $91 million in contracts on TBIPS basically, the professional services contracts.
We're a hardware and software company as well as a professional services security company.
Basically, we go after government contracts as a general contractor. When it comes to our professional services, we hire our contractors through either subcontracting or potentially a JV with another company.
Again, that's a great question. I don't have that on the tip of my tongue, so I'll have to go back to the shop and ask them.
I want to turn attention to statements that were made by a firm known as Botler.
Their chief executive named Dutt told MPs in another committee that she feared Dalian's procurement policies were “another example of monetization and theft using the trauma of marginalized communities.”
Why do you think she said that?
I have my own opinions—there's no question about that—but I'm not sure I can give them here.
It's really an irrational statement, to be honest with you. I've been operating for 22 years with the government, with top secret clearances and top secret facility clearances. We are not a bricks-and-mortar company. I have an office on the seventh floor of 222 Somerset Street downtown, and Coradix is down on the fifth floor.
I believe that Botler, for what they've brought to this situation, were hired for four or five deliverables. They got through two of them, and CBSA cancelled their task authorization for whatever reasons.
We got that cancellation of the task authorization. We passed it on to GC Strategies, and it floated down to Botler, and they've been not necessarily the kindest to Dalian since.
The costing of this is small with respect to the ArriveCan application project.
Botler made clear that they were not certain your firm or other firms, in particular GC Strategies, were aware that there were that many subcontractors.
When did you become aware that there were subcontractors like Botler engaged in the same project you were?
I'm two gates deep in DND on a pretty much daily basis, helping them over there, getting the right capabilities into the right hands of the war fighters. I got right into this as quickly as I could in the fall, especially when Botler was making the waves they were, which I think was inappropriate.
No, as far as I'm concerned, it's unfortunate that Botler took that tack.
I don't know if I answered your question. I apologize for that. If I didn't answer your question, ask it again, please.
I'll ask it in a different way.
The issues that were brought forward by Botler include layers of subcontracting that hide key details about who is getting paid for what and the cozy ties between private staffing firms and, of course, those public servants who ultimately influence that decision.
Please comment directly on your knowledge related to the subcontracting and whether in your mind key details about who was getting paid for what were clear.
Subcontracting happens all the time. We are the prime contractor on a lot of contracts, and then we sub out a lot of our work to other subcontractors. It happens in every industry. It doesn't matter whether it's for pencils—
But the government is very particular. This is public money. It's very important to understand that we pay the utmost attention to the integrity of our public service.
Do you believe there were key details being hidden by way of multiple layers of subcontracting?
In my next round of questions, I'll speak to you directly with respect to your knowledge on subcontracting, how many other subcontractors there were, and the numbers associated with those subcontracts, as well as the task authorization process.
Thank you, Mr. Desjarlais.
We're opening our second round.
Mr. Brock, you have the floor for five minutes.
Thank you, Chair.
Good afternoon, Mr. Yeo.
I understand from earlier testimony that you became a public servant with DND on September 19, 2023. You last testified before a committee on October 31, 2023, approximately a month and a half after you secured full-time employment as a public servant.
I've read the transcript of your previous testimony. At no point in time, despite being asked several questions about the nature of your employment—you focused squarely on your directorship and your shares within Dalian—did you say anything about the fact that you were a public servant.
It begs the question: Why would you withhold that information from Canadians?
I appreciate the question.
This needs to be analyzed a little more. It was on September 19 that I joined the public service. It was 42 days later that the meeting came to us and we were invited as Dalian. I was invited to come to you and speak at OGGO as Dalian.
The understanding was that Dalian holds a top secret facility clearance. Those who know what a top secret facility clearance is know. I hold and I did hold a higher than top secret security clearance for Dalian. As well, in my short time of 42 days with the department, I also had a top secret clearance there and a secret clearance.
By virtue of that aspect and the fact that this had zero to do with DND, zero to do with what I was doing during the day as a high assurance specialist for the department and zero to do with my employment there, as well as the fact that—
Sir, I'm going to stop you there. My time is limited.
I don't accept your response, and I think most Canadians don't accept that response. After a month and a half, you were divesting your interests in Dalian. You had resigned as a director. You put all of your interests in a blind trust and you were working on a full-time basis with DND. Correct? You had no interest in Dalian, yet you gave the impression you were still an active participant in this two-person company. So, sir, with respect, I completely disagree with your word salad of an explanation because it just doesn't add up.
Now I'm going to move on to a monetary aspect.
You confirmed to my NDP colleague you've received $91 million in federal contracts since Justin Trudeau essentially took over government in 2015. What is your commission rate of that $91 million?
Most of the time it ranges between 12% and 20%, and in this case for the ArriveCAN aspect—that $91 million wasn't ArriveCAN, by the way—it was 18.2% from what my staff told me.
Okay. So your 18.2% of $4.9 million—I can't do the quick math—was that shared between you and your partner?
Sir, was it shared between you and your partner? Is it a fifty-fifty share operation with your other partner?
It's a gross profit. When it gets to be a gross profit, you have to factor in expenses: employees' wages, commissions—
Okay, let's not play games. What did you take home? What was your commission for ArriveCAN? Give me a number, please.
—so why would you not have this number?
You're going to provide this committee, sir, within seven days, your actual remuneration or bonuses on the ArriveCAN app. Okay?
Mr. Brock, you're out of time. You've asked for some documents.
Mr. Yeo, you received a request from a member to provide some financial documents. Is that something you're prepared to do, is that something you can do, within a reasonable amount of time?
I say that because often witnesses will agree to provide information that is requested by the committee. I think you said if you are asked by the committee, you would do so. We can formally do that, but we try to avoid that.
The information Mr. Brock asked you to provide us, could you do that?
Yes.
Like I said, I'm willing to support the committee on anything and everything you need to be able to get to where you need to go.
So if there's a request for what kind of remuneration would have come out of $4.9 million in ArriveCAN, then we will provide that for sure.
Okay. I appreciate that.
Also, Mr. Brock mentioned seven days. I'm a little more generous. You have a couple of weeks to get that before you begin to get some calls from my assistant on this committee.
I believe you will. Thank you very much.
We move now to Ms. Yip.
You have the floor for five minutes, please.
Thank you.
Mr. Yeo, could I also ask that when you send in the documents for that you also include your commission on the contract between DND and Dalian in 2013?
Could I ask for a few more details about that? That's somewhat vague. I'm not sure which contract you're talking about back then, 10 years ago.
Absolutely, yes. And, as a matter of fact, just from that perspective, I've been a consultant at DND for 22 years. It's been through Dalian, and they're very well aware that I contract through Dalian, yes.
Let's go back and look at it step by step through the hiring process and the ethics and conflict forms that you signed. Can you tell us what you signed?
Through the public service, there's a natural progress. That was followed to the letter as far as the department was concerned. I did receive a letter of offer on September 5, and then we went back and forth a little bit. I signed it shortly after that, with a start date of September 19.
Within that offer is obviously the level that I went in at, which was an IT-3—everybody can look at that and see what that level is—and also, obviously, a bunch of background information on the whole aspect of DOADs and codes of ethics, and the rest of it. Yes, that was all in there.
No, I didn't sign a.... I signed the offer, but within the offer, they described multiple paragraphs, and one of them had to do with conflict.
Okay. Dalian signed a contract with DND after you became an employee again in fall 2021. This is obviously a conflict of interest. Why did you not feel you were in conflict?
At that time I had my hands off the wheel of Dalian—even before September 19—and that's why I provided my signature to the staff so if there was something going on, I would not even be aware of it. In all honesty, I was not even aware that this smaller contract had even come through until I started reading into this file for our meetings.
You said there were lots of paragraphs in your contract dealing with conflict of interest. Can you just explain a little bit more about that?
There weren't multiple paragraphs dealing with conflict; there were multiple paragraphs just describing my relationship with DND at it related to the PIPSC union, as it related to health care and a bunch of different things that you would normally have on an offer. However, there was one paragraph in there, for sure, on conflict.
Are you satisfied with your work on ArriveCAN? Do you feel that Canadians got good value for money there?
That's a great question.
As not only a certified high-tech consultant, but also a security specialist certified in many different areas, from purely an IT perspective I believe that the aspect of putting all of that together—getting the coding done, getting it on an AWS landing spot, getting all of the cybersecurity, all of the other health care, PII information that needed to be adjudicated and coded into the application.... Is it fair value? I would have probably booked it in at about $25 million to $30 million with probably a 10% or 15% contingency, which is around the number that it would come in at—around $40 million or $45 million over the three years.
There are two, actually. I've basically been a PC supporter for a long time, but during the 2021 election period, I did move over to the PPC, and then I moved back to the PC party after that.
[Translation]
Thank you, Mr. Chair.
I'd like to continue with my previous line of questioning.
Mr. Yeo, you don't remember exactly how much money you made from the contracts for ArriveCAN. I can help you remember that. The money may have been deposited in accounts in tax havens.
According to information uncovered by La Presse, you have opened accounts in tax havens in your name twice since 2011.
What's going on here? How much money did you deposit in tax havens, Mr. Yeo?
[English]
First of all, La Presse came out with its fake news about my having been an employee of the government for decades. You have to take that for what it's worth.
In reference to that, this goes back to my Afghanistan days. I'll be honest with you. In 2008, 2009 and 2010, before I went to Afghanistan, I was travelling all over the world and basically going to NATO operational planning meetings in Germany and in the U.K.—
[Translation]
People don't usually open bank accounts in places they travel to, Mr. Yeo, even if they go there for diplomatic purposes.
[English]
Yes, but I was a consultant back then. It gave me an awareness of international.... I'm an entrepreneur first, I'm a soldier second and I'm the owner of Dalian third.
[Translation]
Can you answer the question, please? I'm asking you how much money has been deposited in recognized tax havens.
[English]
[Translation]
[English]
I was getting to that. As an entrepreneur, I am very interested in international business. When I came back from Afghanistan, I looked into trying to understand how to do international business. That's what led to me figuring out how to do an IBC and how to do international bank accounts and things like that.
It was purely an exercise in my own entrepreneurship and trying to figure out stuff. There's no smoking gun there. There's nothing down there.
[Translation]
Your answer is mind-boggling, Mr. Yeo: To engage in international business, you opened bank accounts in tax havens. Frankly, it is mind-boggling.
I'll move on to other questions.
Let's talk about your affiliation with Mr. Bernier's People's Party of Canada.
You ran as a candidate in 2021. Is that correct?
[English]
[Translation]
[English]
There's no connection.
Obviously, in dealing with the CPC and him going after the leadership during the Andrew Scheer days...that's my awareness of him, but I hadn't met him before, to be honest with you.
[Translation]
You're saying you ran as a candidate for the People's Party of Canada without knowing the person who was recruiting for the party. Is that right?
[English]
[Translation]
You ran as a candidate for the People's Party of Canada without knowing the key person who was recruiting candidates for the party. You don't know Mr. Bernier. Is that right?
[English]
[Translation]
Your time is up, Ms. Sinclair‑Desgagné.
[English]
It sounds like a no, but the question is whether you met Mr. Bernier.
[Translation]
Thank you, Ms. Sinclair‑Desgagné.
[English]
I'm going to pocket all this for relevance at a future committee meeting, when I'm being called on about relevance.
For now, we'll turn to Mr. Desjarlais.
Of course, it's my belief that members have a wide latitude to ask questions. This will be exhibit A.
Mr. Desjarlais, you have the floor.
Thank you very much, Mr. Chair.
I'll just follow up on that last question, and then I'll go to another question if I have enough time.
In relation to your political affiliation, you said you're an active member of the Conservative Party today.
Moving on, then, I'll go back to my previous line of questioning about your knowledge of the execution of contracts, subcontracting and task authorizations.
It's clear from testimony that we heard in prior committee meetings from Botler that they did not provide written consent of their knowledge, and that you executed a subcontract in their name without their knowledge. Is that true?
Yes. As far as we're aware, when it comes to Botler, we had a task authorization come from CBSA that was going to GC Strategies, and where it stops is with GC Strategies. They hired Botler as a sub-subcontractor underneath them, so our relationship was really with GC Strategies and Botler's relationship was with GC Strategies.
We didn't have a direct relationship with Botler.
You feel that your relationship with GC Strategies in this case was your level of accountability to the task authorization and not to the other subcontractors of GC Strategies. Do I understand that correctly?
Yes. In normal circumstances, the prime contractor and the subcontractor have the relationship. If there are other things happening below that, then we have no influence on that.
Considering you're engaged in the same project, it seems unlikely that you did not have knowledge that GC Strategies had this sophisticated layer of task authorizations that hid the actual work that these subcontractors were doing, including your company.
I'll ask one more time: What does your company do? What did you do other than hiring other subcontractors?
What do I do other than that? Hmm. I'm trying to get to that.
When it comes to what we do, this was asked of me at the OGGO committee as well, and I'm sure that's—
No, this happens with your company. I'm asking about your company, sir. What does your company actually do?
Mr. Desjarlais, I'm giving the floor to Mr. Yeo for an answer, but your time is up. Please don't interrupt.
Mr. Yeo, I'll allow you to answer, and then we'll move on to the next person.
For every general contractor with the government, whether it is TBIPS contracts, PS Online or TSPS, it doesn't matter. We are the general contractor and the prime contractor for the government. We hire subcontractors to do the work. What we do is contract management, not the actual work.
Thank you, Chair.
Mr. Yeo, it's good to see you again. You testified before Parliament on October 31 of last year. I did ask you at the time what you would say you do here. In one answer you gave in the course of that round, you said, “I am an executive on the board of directors for Dalian, and I maintain all of the governance as it relates to the PSAB”.
Mr. Yeo, was that the truth as of October 31, 2023?
I will answer you, for sure.
It ends up that we were in that time frame of dealing with lawyers and I had been in a director role for the company—
Sir, on October 31, you were before this committee. You answered my question in a particular way. Was what you said to the committee then assembled on October 31 the truth?
Were you “an executive on the board of directors for Dalian”? Were you the one who maintained “all of the governance” on October 31? Was that true? Yes or no?
We were in flux during that time period in order to.... Obviously, we had 60 days to get everything done and we did that with Dalian and got our non-disclosure in and our no-access agreement during that period.
Sir, you were not in flux. You either were on the board of directors or you weren't on the board of directors. A person is either pregnant or not. They're either on the board of directors or they're not on the board of directors. They're not half-pregnant, and they're not half on the board of directors.
You have said that, shamefully, the media have claimed that you were on the board of directors and a government employee at the same time without asking you. Maybe they didn't need to ask you because they foolishly assumed that what you told Parliament on October 31 was true.
Sir, your LinkedIn account says that you were a business owner at Dalian Enterprises from 2001 until present, and you were employed by the Department of National Defence continuously from 1987 until present. Again, to your truthfulness or not, was your LinkedIn account accurate in the description of those timelines?
If you look at LinkedIn, it is a non-authoritative source. First of all, it's LinkedIn. It's a web page. Second of all—
Why would we expect that you would put accurate information on your own LinkedIn page? That's outrageous.
I'm going to turn it over to Mr. Genuis. It is his round of questioning.
We can all hear you quite clearly, so if you could just keep that in mind, Mr. Genuis.
Hold on.
Mr. Genuis, names are important. We all make mistakes, but if you could conduct yourself in a way that shows our witness respect, I would appreciate it.
Sir, you have on your LinkedIn profile a claim that you were simultaneously working for the government and leading Dalian. You told a committee on October 31 that you were on the board of directors for Dalian. You were, at the time, employed by the government. You subsequently said that no, there was some flux going on.
You clearly were in a conflict of interest, weren't you, sir? You were clearly doing both at the same time. Now you're trying to weasel your way out of it after the fact, but you were clearly in a conflict of interest.
Were you not?
Okay, I need to answer the LinkedIn side of it first.
First of all, it's a non-authoritative source and it's on the Internet—
It did not describe all of my service that I have done. I've done 14 years in the reg force, 10 years in the reserves and 20 years as a contractor. I've had 36 years in the department.
I probably should have.
I need to answer your question. You asked me a question and I'm trying to answer.
The department has deemed—
Were you not in a conflict of interest, being on the board of directors of Dalian at the same time as you were an employee of a department that was giving contracts to a company that you, according to your testimony before Parliament, were on the board of directors of?
Thank you, Mr. Chair.
Mr. Yeo, getting back to your aborted political career when you were a candidate for the PPC, which is a party that was against vaccine mandates, do you not see any hypocrisy in working on an ArriveCAN app that was designed to track people's vaccine records when you actually didn't believe in the vaccine mandates in the first place and were running for a party that actually took that position?
There's definitely a “why”, as to why I was trying to become a member of Parliament, much like you folks around the table today. I wish somebody would ask me about that at some point during this time period because it's a much different answer than you'd think.
Second of all, when it comes to vaccine mandates, I'm very two-gates deep at DND and then on nights and weekends I'm doing work with the PPC for the election. From my side of it, I had no visibility into a low-level contract that was with staff augmentation—a contract with CBSA—and the work that was going on for ArriveCAN.
We were doing much more work than just ArriveCAN, so I had no visibility at the time.
I just want you to go back again because I'm a bit confused.
I think a previous answer was that Dalian, and you personally, did no actual work on the ArriveCAN app. You subcontracted it all.
Is that correct that you didn't actually do any actual work on that?
We're prime contractors on a staff augmentation contract that staffs subject matter experts into CBSA to actually perform the work—to code the application, do project management, security and everything else.
Saying that we don't do any work is a little not true. At the end of the day, we do subcontract out that work to subject matter experts who do eventually make their way into CBSA to actually perform the work.
You got an 18.2% commission rate on the $4.9 million ArriveCAN contract.
Is that correct?
That's about $890,000 in commission.
I'd have to go and ask our CFO to try to figure that out, but my office in 222 Somerset has employees, commissions and everything else like that.
I'm not sure what the exact number is to be honest with you.
Absolutely.
In some cases, it's our own consulting bench that goes out to do this and in some cases we did some work with GC Strategies.
Again, that's a question of how much expenses are within the company, but in a normal sharehold perspective, if you're a majority shareholder and you have minority shareholders, at the end of the year everybody's T5ed out as far as dividends are concerned if we have a profit.
Going back to when you formed your company in 2001 or 2002, basically Dalian was formed to go after indigenous contracts.
Right.
If you subcontract everything else out to other companies, they don't have to be indigenous service providers.
No, not necessarily.
I helped Allen Frost, with a number of other companies, start the PSAB. He had already got it going but we had helped him formulate some of the policies back then.
It was basically for entrepreneurs who needed to have access to government contracts, so from that perspective it was all about having ownership in the company and having the ability to grow the company through government contracts and then potentially either start another company or potentially hire employees and keep growing your own business.
It's a very good policy.
In your testimony, Mr. Yeo, you mentioned that you provided your signature to your staff to use when needed.
Do you think that was appropriate under the circumstances, looking back on it?
Absolutely.
I was divesting myself from the company, I had no hands on the business after September 19 and actually prior to that, and they still needed to get stuff signed.
You see that all the time in big corporations where the signature's provided.
I think a person's signature indicates that you're personally tied into that contract or that deal.
I think people don't look at a signature thinking, that's not really Mr. Yeo, that's just somebody else who is signing for Mr. Yeo.
I think they would probably think that you were overseeing it or responsible to stand behind your signature.
Ultimately, I own the company and I'm responsible, right? I've taken that hit and I'm no longer with DND and my company's been terminated as far as all contracts are concerned, so I'm taking the direct hit on this.
What I can tell you is that this does happen.
Thank you.
We're beginning our third round with Mr. Nater.
You have the floor for five minutes, please.
Thank you, Mr. Chair.
Thank you, Mr. Yeo, for joining us this afternoon.
I want to clarify a few things.
Can you confirm that you resigned from the public service on March 5, 2024? Is that correct?
You said that DND had made a statement that there was no conflict of interest.
Was that made directly to you?
No.
It was an alleged conflict that somebody put up, I guess. What I've heard in the papers—and I know in my own heart—is there was no conflict.
So you never received a report on March 3 of a conflict of interest report from the Department of National Defence.
Okay, we will pull open that another time.
You mentioned that you had been a consultant for a number of years with the Department of National Defence. I think often we see examples of consultants who work within the department almost parallel to or often in conjunction and integrated with public servants.
Did you ever personally have such a relationship at DND in which you worked at DND HQ or worked closely with full-time, indeterminate public servants during your time as a consultant?
The way the consultant aspect works for most of the departments is that you are the subject matter expert player within the directorate. You have public servants who manage you on a day-to-day basis, so the interaction is there, yes, absolutely.
That is very similar to an employment situation, although you would be on a contract rather than an employee of His Majesty's public service, is that correct?
I'm not sure I would go with the employment side of it. You're there as a contractor through TBIPS, SBIPS, PS Online, or one of these other staff augmentation contracts. There's a pretty clear line. You have zero ability to sign off, or do anything as a consultant.
It was at a government office.
When was the first time you cashed a cheque, or e-transfer, for your ArriveCAN app work? When was the first time you received payment? You mentioned $4.9 million over three years. What was the date of the first payment receipt?
I'd appreciate getting that information on the first day it was received, as well as the last day. Are you able to approximately tell us when that last payment came through?
Absolutely. Our CFO shop would have all those details. We would provide that to you in a timely basis, for sure.
I would appreciate that.
You mentioned in your opening statement how you were either putting your interests in Dalian into a blind trust, or you had already put them into a blind trust, when you joined the public service.
Can you clarify what you meant by a blind trust?
When you divest, there are lawyers involved. You have to divest your shares. You have to put them in to a trustee. There is a lot of documentation back and forth in order to facilitate that. We did start that right away.
My meetings with my lawyers and things like that happened in November all the way through into January. We put the non-disclosure and non-access in with Dalian at the same time. Eventually, we did put all of our documents with DND.
In hindsight—I'll be honest with you—knowing what I know now, and the whole situation that we've run up against here, there's a direct response from me that I should have put all of that in prior to signing the offer. I should have done all of that prior to even looking at the offer from the government. That one's on me, but, at the end of the day, all the information went to where it needed to go.
I'm going to push you a little bit on this. When we hear the terms “blind trust”, it's tough to see how a blind trust would work when you are the founder and majority shareholder of a corporation named Dalian. You can't all of a sudden forget that you own it, whether its visible in a blind trust or not. You also used the terms “divesting your interests in it”.
I'm not entire clear which one you were trying to do. Were you trying to put your corporation into a blind trust? I'm not sure how arm’s-length that could be, or were you divesting yourself of your corporation at that time?
We know now that you're back in full swing with the company, but what was actually your intent at the time? Was it to have it at an arm’s-length, untouchable entity of a blind trust, or were you divesting? Were you selling off your shares? Were you divesting yourself of your corporation at that time? It's not clear what you were doing while you were active as a member of the public service of Canada.
Absolutely, it was not a divestiture, but a blind trust. I did acquire a trustee that I trusted to hold my shares. That's the course of action that we took. If I mentioned divestiture, that's not the case.
Thank you very much, Chair.
Mr. Yeo, I think you've managed to do something that actually should happen here at public accounts, which is to have all members equally questioning what it is that we're hearing, and wanting to get to the truth of the matter for the sake of the public trust. That's where I for one find that your story has a number of holes in it. Although, it does come together in one way.
You mentioned early on that you met a gentleman, Terry Matthews. Who was that?
Okay, so he's someone who knows how to make money, because you mention that you're not really in it for the money, but you met with someone who knows how to make money. He said you should get it on—how did you put it?—indigenous—
So he put you on to something and, indeed, that's what business people do.
Now, you were not in business at the time. As you said, you had no experience with technical work or coding. What was your background? You were a reservist with the armed forces.
If you predate...my experience, I went through computer science, and I've been involved with computers my whole life. Certainly there's the aspect of my military career and my reserve career, and then eventually getting back into my high-tech world after all of that experience was the direction that I took, so I do have a background in both.
Was it your intention then to start up a technical services company? Were you, as an indigenous person, as you have identified yourself to us, then providing services to the government of the time? This has covered, of course, a number of governments trying to promote indigenous businesses.
Yes, in fact, the company started out as a hardware and software company. We didn't really get into professional services until 2007-08, so my initial—
Was it your intention then, when you did get into professional services, to hire indigenous employees?
All right, well, at least there's that, but somehow it didn't work out. You had high points and low points. You weren't making money. At some point, you decided to get yourself hired again with DND. You entered into a contract of service.
Referring to your contract, there were a number of paragraphs there that refer to the code of ethics of the public sector and the conflict of interest code. In one such paragraph, there a form called the confidential report, form DND 2839, that talks specifically about conflict of interest. This is in your contract that you signed. Do you recall this form that you would have signed?
It does speak specifically to conflict, which is not something that you have been forthcoming about here in earlier testimony.
You seem to be an equal opportunity conflict of interest operator, because it goes on to talk about political activity, where federal public service employees have a right to engage in political activities while maintaining the principle of political impartiality in the public service, and there's information in that regard.
Is that something that you also recall signing?
All right, and then going back to when you did decide to become a member of Parliament, I'd like to hear why you decided that, because, at the time, you were operating Dalian, and you had contracts with DND that were involved in the ArriveCAN, and, as other colleagues have pointed out, it's hard to believe that you did not know that Dalian was working on ArriveCAN.
Why did you decide to become a member of Parliament to run as a candidate?
In true form, on my indigenous heritage side of it, my great-grandfather signed the treaties in November 1923. In the spring of 1924, the colonials came back through and enfranchised my whole entire family. They enfranchised hundreds of people, and they enfranchised thousands of people—
You ran for the People's Party of Canada in recognition of your indigenous ancestry. Is that correct?
I'm definitely getting to my “why”, for sure, and that is that my entire family has been enfranchised, and I am caught up in the second gen cut-off rule. This is a politically genocidal article out of Bill C-31 that is still in the Indian Act today, and my entire family is caught up in it. Hundreds of thousands of Canadians are caught up in it.
My “why” as to why I wanted to get back in as a member of Parliament was to create a private member's bill that would allow that part of the Indian Act to be solved once and for all, which would not only help me but help hundreds of thousands of Canadians.
Thank you.
That is your time, Mrs. Shanahan.
[Translation]
It is now over to Ms. Sinclair‑Desgagné for two and a half minutes.
Thank you, Mr. Chair.
Mr. Yeo, you previously stated that you had put the shares of your company into a blind trust, and you just said so again today.
Did you inform your team or your support staff that you were doing that?
[English]
[Translation]
Did those people understand that signing an agreement was the same as giving approval? With your signature on it, it was now your responsibility. However, if you were no longer supposed to be involved in Dalian business, you weren't supposed to be signing anything. That is just elementary.
By the way, who was the person who put your signature to things on your behalf without your knowledge?
[English]
It would have been my staff that I directed. This is definitely on me. I would have directed my staff. I did direct my staff to.... While I was in this area of being able to work with the department and also put everything into a blind trust, I gave them the authority to go ahead and make sure. I trusted them.
[Translation]
Earlier, you said that Dalian had only two employees, you and your partner. Who are you referring to when you talk about staff?
[English]
That's kind of where there's a misinterpretation of that.
We have two people on staff as far as our full-time employment is concerned, but we have a shared services model with Coradix that allows us to work with the CFO, HR, operations etc. It's been like that for 20 years.
[Translation]
It was someone at Coradix who put your signature to documents without your consent, when you had asked that the shares of the company be placed in a blind trust. Is that correct?
[English]
[Translation]
[English]
No, it was one of my members of staff to whom I gave the authority to use my signature while I was at DND.
[Translation]
[English]
[Translation]
You say that Dalian is made up of you and your partner. Was it your partner who signed your name without your consent? Why didn't he just sign, if he co‑owns the company?
[English]
He's not an owner. He is a member of my staff. I gave him the authority to use my signature while I was at DND.
[Translation]
[English]
[Translation]
Can you give me the name of the person who put your signature to things and failed to inform you that they were signing contracts on your behalf?
[English]
[Translation]
[English]
Yes, the member of my staff that I gave my authority to is Kyle Dixon.
I'm at a point right now where you have to understand that I'm trying to help you get to where you need to go and give you the answers that you need. If you want people's names in my staff, I'll give you all of the names of my staff.
[Translation]
Your time is up, Ms. Sinclair‑Desgagné. Thank you.
[English]
Mr. Desjarlais, you have the floor for two and half minutes, please.
Thank you very much, Mr. Chair.
At the very beginning, Mr. Yeo, you mentioned that you were hired on September 29, 2023, so why did Corporations Canada have you listed as a director until March 2024?
It was September 19, 2023 when I started my employment with the public service. As far as Corporations Canada getting their updates, as I said, my lawyers were putting all of the documents and everything together and staffing that for me. That's the date I guess that they have on record.
I've really been working with the department for 36 years. It was just recently that I decided—because, you know, I have five, six, maybe seven years left of working—that I would actually look to go back and provide more value to the department by driving some of their large projects.
As a contractor, I've been working with the department for 22 years. The discussions about me moving over to the public service have been very recent. I just signed on September 19.
I'm not sure if I answered your question or not.
From September to March.... In the time between those two dates—the time you left Dalian and the time you were a public servant—did you declare a potential conflict of interest at any moment?
We were in the process of doing that over the fall and into January—getting all the documents and paperwork together to put everything into a blind trust and that sort of stuff. That's on me. We probably should have done that way before September 19, and we didn't, so I'm—
DND has come back out and said there was no conflict because of the.... I don't know why they.... The whole idea of the conflict is a bit nebulous to begin with, because of my position in DND and the documents I put together for Dalian. I've had no access or visibility into what they've been doing since the 19th, so—
At any point during your discussions of the declaration of conflict and with this employee you have...was the conversation of the paperwork that never got done...? At what point did he bring that up as a potential issue?
The paperwork did get done. It just could have been done on a more timely basis and prior to my joining on the 19th.
If you could repeat your question, I'll answer it.
I'll ask it in a different way, if I can, Mr. Chair.
Did you know there was a potential conflict before your trustee made you aware of it, or did you ask your employee to be your trustee in the knowledge there may be a potential conflict?
No, I didn't ask my employee about it.
I have to make sure I get this right: The whole idea of putting in the appropriate documentation and putting things into a blind trust happened over all of the fall and into the early part of 2024.
At the very start of today's discussion, one of my Conservative colleagues put a question to you about a potential conflict here, and you flat out said there was no potential conflict. Now you're saying that you obviously knew of the potential conflict and filed paperwork to that degree.
No, we didn't expect a conflict to happen at all, because of the level of position I went into at DND. It's a very low-level position. There was no conflict awareness at all. We were just putting in the safeguards to make sure that, if there ever were one in the future, they would be in place.
Thank you very much. I'm afraid that is your time, Mr. Desjarlais, but you'll get another round.
We're turning now to Mr. Barrett.
Mr. Barrett, you have the floor for five minutes.
Oh, it's what you do. It's working for the federal government as a public servant and also as a contractor concurrently.
Well, yes, I would assume there are a lot of people in the public service who have companies outside the public service. I'm not aware of any.
What do you base that on? Is it from your personal experience or conversations with other public servants?
I would say it's my own perception. I've been around the department forever and everybody has their day-to-day work and maybe a little side gig at night doing something else.
You talked about how you took this job to drive projects. What did you say your position was within the public service?
I am a tactical security specialist certified in high-assurance capabilities that go into the Canadian army at the very pointy end of the stick—in combat vehicles and on soldiers. I'm a soldier myself—
Okay.
Were you leading change as an IT-3? Is it common for IT-3s to be leading departmental and organizational change?
I certainly wouldn't put it up that high.
“Team lead” is the correct statement. As an IT-3, you're in charge of a number of projects. In this case, from my side, it was a high-assurance security project.
You said that the figure that the Auditor General attributed to your companies is incorrect. Is that fair?
You read it and determined that the Auditor General—who is by definition a general, with an army of auditors, which should be easy for you to understand, based on your experience—and her whole army of auditors was wrong and this one-man army was right. But you've offered a series of assertions in your committee appearances that aren't true. Those have been highlighted by members of other parties and by my colleagues.
Even just today, you said that you're a member of the Conservative Party, and that's not true. You haven't been a member of the Conservative Party since 2021.
Some hon. members: Oh, oh!
Mr. Michael Barrett: No, that's fine. We know how—
Order.
Just one second. I'm going to stop the clock.
First, that is a prop and it is not allowed. Second, that is a donor card. It's not a membership card. We all get them to try to get money.
Mr. Barrett, you have a minute and a half.
So it's a donor card. Again, what you're offering is not an honest representation of what you're doing. I know that you thought it would be a great gotcha moment, but it demonstrated that you're not being truthful, sir.
When it comes down to your not knowing the difference between being a member of a party and making a donation to a party, should we really trust your assessment on whether or not the Auditor General of Canada is wrong in the amount of business you've done with the Government of Canada? I'm inclined to trust the Auditor General, just as I know that I can trust membership services: They knew that whatever it was you were going to hold up wasn't going to be what you said it was. While your misrepresentations vary, that's just another great example that we can't trust what you've said to be true. It gives rise to more questions than it does answers.
I'll cede my time back to the chair.
Thank you very much.
I'll turn now to Mr. Jowhari.
Thank you for joining us, Mr. Jowhari. You have the floor for five minutes, please.
Thank you, Mr. Chair. It's good to be here once again.
Mr. Yeo, I'd like to go back to ArriveCAN. Can you kindly tell me how the contract for ArriveCAN came to Dalian?
My understanding is that we never had an ArriveCAN contract. This was all through staff augmentation contracts that were competitively awarded to Dalian on behalf of the CBSA. My understanding is that it was through staff augmentation contracts.
On the staff augmentation contract that was awarded to Dalian on behalf of CBSA, how did that come about?
Again, I'm buried two gates deep at DND, and I don't have the exact aspects of how that actually transpired. I could ask our staff and get back to you.
Sir, you indicated that the amount of the contract was $4.9 million. The amount for staff augmentation was $4.9 million over three years for 20 employees at 100 hours. You called that part time. Is that correct?
If my math holds—$1.6 million divided by 20, divided by 100—you are charging about $815 an hour, whereas GC Strategies, for ArriveCAN, was charging $1,200 plus. Can you explain why? Can you tell me what your team, that 20-person team, was doing for CBSA?
I'm not exactly sure of their specific tasks, because this goes into staff augmentation. The people who went into it were in software development, testing, project management, technology architecture and cybersecurity. Once they got over to the CBSA through the staff augmentation contract, it was really up to the technical authority to drive whatever business needs were happening on that side.
To get to your question about the 20 people on the contract, my understanding, from what my staff has provided me, is that the bill rates ranged from $540 to $1,000 per day, depending on the service.
Okay. That is pretty much aligned with what the Auditor General was talking about as a rate, but that's very different from the rate that GC Strategies was charging.
Was Dalian dealing directly with the CBSA, or was it through another organization?
My understanding is that Dalian was the prime contractor for these contracts, so yes, we were dealing directly with the CBSA.
There are 20 IT professional consultants—not employees—but I would have to check with our staff to see if any of them are actually indigenous.
Of the projects that you have worked on with the Government of Canada, whether as a subcontractor or whether it was your employer, how many of them have been indigenous?
This is a challenge that we have with our indigenous culture. We don't have enough trained, technical people coming out of the indigenous side of things. I don't know the exact number.
From a training perspective, I would say that we have had experiences with Algonquin College in the past. I have given out an aboriginal achievement award to technical people who have passed the bar at Algonquin. I've brought them in for a 12-week placement at the company, and then they have either stayed or have moved along.
Would it be fair to say that because of your claim of indigenous status, you're very comfortable taking...under the procurement allocation or under a set-aside contract, yet Dalian's investment into either hiring or training and building capacity within that indigenous group is non-existent?
The PSIB—the PSAB at the time—is not actually in the spirit of that aspect. It's in the spirit of trying to get access to government contracts and being able to compete against bigger companies.
Absolutely, we've done what we've done in the past with Algonquin and have tried to hire indigenous people, which we have as internal staff and also as contractors, but I just don't have the current number of how many indigenous contractors we have today.
Thank you. I appreciate that, Mr. Jowhari.
We'll look for that response, as well, Mr. Yeo.
This is now our fourth and last round.
Mr. Brock, you have the floor for five minutes, please.
Thank you, Mr. Chair.
I want to pursue this line of misrepresentations, Mr. Yeo.
I know that Mr. Barrett and other members have asked you some questions that, in my opinion, really challenge your credibility.
Both you and the president of Coradix, Mr. Wood, testified on October 31, 2023. Both of you were quite emphatic that both businesses are regularly audited by Indigenous Services Canada with respect to the procurement strategy for indigenous business and that you both had been receiving clean audits.
However, that was a misrepresentation. It was a lie because Indigenous Services Canada said that all it does with respect to the set-asides that both of your companies operate under from time to time are pre-audits. It doesn't do post audits.
Do you agree with that assessment from Indigenous Services Canada?
Well, it's your policy. I understand that we go through audits, but I think that's a normal course of action for ISC in its entirety, not just for our company.
I think it's a pretty big deal, sir, when you lead the committee to believe that you're running a clean business, that your indigenous set-asides are legitimate and are not operating under a phantom scheme. I know that you've been heavily criticized by a number of indigenous organizations that you're running this.
In fact, Botler even made the same allegation, so these are real concerns. I think you have to be honest with committee members, sir, because although you haven't been sworn to tell the truth, there is a presumption that you will tell the truth at committee. There are consequences when people do not tell the truth at committee.
Ultimately, we're going to find out by the end of this summer through Indigenous Services Canada, which is going to audit everything you have done and that Coradix has done for the last eight years, hopefully, if not longer, with respect to all the indigenous set-asides. I think Canadians deserve to know whether or not indigenous Canadians have benefited from this particular government operation. If they haven't, sir, then you'll have some questions to answer. I put that out to you, sir.
The other aspect that concerns me is your relationship with GC Strategies. Is it accurate, sir, that the one and only time you worked with GC Strategies was on the Botler task authorization?
That I would have to ask our staff. I'm not exactly sure if there was anything else in relation to working with GC Strategies. I'd have to ask our staff about that.
Let's talk about Botler for a moment, please. You do know that Kristian Firth from GC Strategies testified that on not one occasion but upwards of five occasions he deliberately and intentionally doctored work experience for both of the Botler partners. He claimed it was a mistake.
Given my former background as a Crown attorney, I can tell you that all accused persons, all criminals, claim they made mistakes.
What in fact Mr. Firth did was to commit forgery, and it was a fraud on the government. What concerns me, sir, is that The Globe and Mail recently reported that both your company Dalian and Coradix received those doctored résumés, those fraudulent forged résumés, and you in fact forwarded those on to the government. That was recent news to me and perhaps to this committee, because we were all led to believe that it was Kristian Firth at GC Strategies who delivered those directly to the government.
It really begs the question: If you had only a limited amount of time with GC Strategies, why would you accept their material at face value? Now you're implicated as part of a joint venture, as a party to the offence of fraud and forgery. It's no wonder the RCMP is currently investigating your company and Coradix. Just because you haven't been contacted doesn't mean you are in the clear.
You talked about having quality management systems in place. Why didn't the quality management systems catch these fraudulent résumés?
Yes, for sure it's a good question.
First and foremost, we're as dismayed as the rest of the committee with the findings on GC Strategies. We were definitely not aware of what was going on below our subcontractor. The contract between us and GC Strategies is exactly that. We have no reference to Botler in this case and what information was being provided by GC Strategies to us.
There are aspects—I will be honest with you—of third party verification of employment and that sort of thing, but there's no industry standard that everybody uses in the entire professional services market.
What we've learned from this is that, even though we do our due diligence on security clearances and putting the CVs together, and the categories and the grids, and staffing those up to CBSA, we likely need to put third party verification of employment in place to allow us to smoke out this kind of stuff. We just weren't aware of it.
Thank you, Mr. Chair.
Mr. Yeo, you've had a long career. You joined the Canadian Armed Forces in 1987. You were a reservist from 2001 until 2016. You were hired, as we heard today, by National Defence in 2023.
Earlier today in your testimony you said that it was fairly common for many government employees to have a company on the side. You said that was your own perception. Could you elaborate on what informed your perception that many government employees run side-hustle businesses?
I can tell you this. In Canada with our taxation system and everything being so expensive with inflation and everything else, whether you're a government employee or whether you're someone else not working with the government, there's likely a chance that you might have something else on the side to help pay the bills and put groceries on your table.
I'm an entrepreneur. I try to start things all the time. I'm looking for multiple sources of income, and I'm sure many Canadians are in the same boat, whether they're working for the government or not.
With all due respect, sir, that was not my question.
You said earlier that your perception, your own perception, was that many government employees have corporations on the side.
My question to you is what informed your perception that other—not you but other—government employees, and in fact many of them, as you stated, have corporations on the side?
Again this is my own perception. Whether they have corporations or whether they have things after hours, that's their own business. I can tell you that from my perspective, I'm out doing what I need to do for the government during the day, but then I'm an entrepreneur at night and trying to do other things.
I can't imagine that others aren't similar.
You talked earlier about how you got into securing government contracts. In fact, you said that you “go after” them.
I want to hear from you, Mr. Yeo, about how easy or how difficult has it been for you to secure government contracts. Would you consider yourself successful at being able to secure government contracts for work through your company?
In my opinion anyway, Dalian has been a very good success story up until recently with all of this hype about me being an employee prior to the ArriveCAN days and during ArriveCAN. This is what PSAB actually does for us. It allows us to be able to be a part of the solution with the government as far as indigenous companies are concerned and to learn about how to interact with the government through contracting, through procurement and through staffing and all of the other aspects that go along with that, so absolutely, yes.
You understand, as a former employee of National Defence and as somebody who has had many interactions with government over the years, that public servants play a fundamental role in serving this country and their conduct is carefully watched. It's important to uphold public trust, because Canadians put their faith in the government to deliver programs and services, and that includes the people who are hired within that public service to act in the most transparent, accountable and ethical ways.
Would you say that it can be seen as a perceived conflict of interest when you have been able to be so successful and yet I hear a very different narrative on the ground from people who are everyday Canadians unable to access government contracts and from companies that are doing good work and innovative work that have told me they're unable to even crack the door open? Do you find that there is a perception that there is something that is allowing you to have access that other people cannot? Also, there is the fact that you have said today that it's common for people working in the public service to have corporations, as you have?
The narrative I hear from everyday people in my riding is that they can barely get home in time—going through traffic, working 10 hours a day—to prepare a meal for their family, and the last thing on their minds is to set up a corporation and have a side hustle where they can make more money and be able to afford the things they need.
I'd like to hear your comments on that, Mr. Yeo.
I appreciate the backdrop.
It's been difficult. There is no easy button when it comes to working with the government. Many corporations die on the vine because of the fact that they just can't handle the actual process for actually winning contracts. I agree with you on the fact that Canadians are struggling and that some of the people don't understand how to actually process successful contracting mechanisms, but in the end, it's very competitive. It's supercompetitive. Our hardware and software business has shown that: In the last five or six years, we have put in multiple RFPs and not won them.
Certainly, learning the process, whether it's under PSAB or whether it's under a non-indigenous side, and how to interact with the government, is very long, very arduous and extremely complicated.
I'm afraid that's your time, Mr. Chen. We've gone well over. Your side does have another spot left. I know you have more questions.
I will move on to Madam Sinclair-Desgagné.
[Translation]
Over to you for two and a half minutes.
[English]
I believe that Colin came into Coradix a number of years ago, but again, I've been working at DND two gates deep for a long time and have not had exactly a lot of interaction with Colin.
[Translation]
Earlier, you mentioned that Coradix and Dalian had been operating under a shared services model for a number of years.
How long have Dalian and Coradix been working so closely together?
[English]
[Translation]
[English]
[Translation]
Did you know that just before he was with Coradix, Mr. Wood had worked at a firm called Veritaaq, which was convicted on February 23, 2009, of bid rigging for contracts with the Canada Border Services Agency? Were you aware of that?
[English]
[Translation]
Apparently, Mr. Wood hid that the company he worked for just before arriving at Coradix was engaged in, oddly enough, the same bid‑rigging schemes that Dalian, Coradix and GC Strategies are accused of today. Other charges were brought against Veritaaq shortly after 2015. Mr. Wood then left the company and moved over to Coradix, which works very closely with Dalian.
Do you see a link between the potential bid rigging revealed in the Auditor General's report and the schemes engaged in by a firm where Colin Wood was the director of sales at the time?
[English]
I can only attest to what I know, and that is I've known Colin since he came to Coradix. I was not aware of his previous employment.
[Translation]
Are you still considering working with Mr. Wood now that you know that the firm he worked for and for which he was the sales manager was convicted of bid rigging?
[English]
It's always a conversation. It will always be a conversation. Yes, I'll have a conversation with Colin.
[Translation]
[English]
[Translation]
Thank you, Ms. Sinclair‑Desgagné.
[English]
Mr. Desjarlais, you have the floor for two and a half minutes.
Thank you very much, Mr. Chair.
I do want to return to the comments you made in relation to one of my colleagues' questions on the doctored résumés.
What you do you know about these résumés?
Not much, to be honest with you.
In the end, if you talk about what happened between Botler and GC, they could put anything on there as far as their experience is concerned. Our relationship is with GC and with the Crown, with CBSA, as our subcontractor.
My company, obviously. It was a JV, so we obviously had interaction with GC Strategies in performing the task authorization requirements, yes.
I'd have to check with our staff and ask them that. I'm not aware. Obviously they had to have some interaction between the task authorization request and our relationship with GC, but I'm not aware of the details of what they discussed as far as Botler is concerned.
These forged résumés that gave preferential access and eventually the awarding of the bid are tremendously disingenuous and are defrauding Canadians.
I want you to know how serious this issue is and to understand that providing any assistance from your company to the forgery of documents is illegal.
Do you understand that?
Absolutely. That's why we're just as dismayed as everybody else as to why and how we could have gotten this information wrong.
I would expect that given our relationship as the prime to CBSA we would have staffed up the package for the task authorization to them as part of the requirements package. It would have gone on Dalian letterhead, but I'm not sure exactly what the interaction or documents or letterhead was between Botler and GC—
You're misrepresenting facts, Mr. Yeo.
That's completely disingenuous to then say your company never had any access to Botler, that your only relationship was with GC Strategies, and then you just now confirm that the résumés that were forged were on your company's letterhead. Is that true?
I understand what the process would be because I understand task authorizations, but I have not seen any of the paperwork personally.
You have not seen the paperwork but you just said you know the forged documents are on Dalian letterhead.
I can assume that, obviously, with us as the prime and giving the CBSA this documentation as part of the task authorization, it would have gone on Dalian letterhead—
He is. Okay.
You got $7.9 million for ArriveCAN alone, even though, as you've testified, you didn't do any actual work on the app.
How many indigenous Canadians, besides you two, benefited from that big, fat cheque the government wrote Dalian for ArriveCAN?
I'm just telling you the facts from our side.
We actually went out to the Auditor General on the 30th—
I think that's absurd, sir.
I want to focus on the indigenous procurement component of it. How many indigenous people, besides you and your partner—
Let me just stop the clock, Mr. Genuis.
I will remind everyone, because this has come up time and time again, that the Auditor General's terms do not allow her to go into companies like Dalian, which is the one before us.
You sent her documents. From her perspective, they could have been irrelevant.
You will all recall that the Auditor General noted that she came up with these numbers based on what the Government of Canada provided her. That's just a point of clarification for the committee.
It doesn't change any of your questions, Mr. Genuis. I just wanted to put it out there that this is an ongoing debate about the scope of ArriveCAN, and I think it is an important one.
We don't know what the answer is. That's why these committee meetings are happening.
Mr. Genuis, you have the floor for four and a half minutes.
Mr. Yeo, besides the two people at your company, how many indigenous people benefited from the $7.9 million that the Government of Canada gave you for the work you did on ArriveCAN?
In reference to the $7.9 million, which is actually $4.9 million, our actual representation of profit in that not only helps our staff, but helps with our staff augmentation with Coradix as well, because I have a shared services model—
How many indigenous people...?
You're not answering my question. You're talking about your staff, but there are two of you.
Okay. There are two indigenous people who benefited. They are you and your partner—
—but how many other indigenous people benefited from this particular outlay from the Government of Canada?
Well, we do work with Algonquin College on staffing bursaries and things like that. I have outreach back to my own reserve in Alderville. However, as far as benefiting from this—
What does that even mean though? You have reached back, so when you make a lot of money....
How do indigenous Canadians benefit from you getting this deal?
The PSAB process and the piece of policy...it's a government policy that we favour, because it's a great policy. It's not made to—
—help indigenous communities across the country. It's made to help the entrepreneur who's trying to get government contracts to grow his business.
In that context, it's not made to help out indigenous communities across the country.
You just said that the government's indigenous procurement policy, in your view, is not made to benefit indigenous communities across the country; it's made to benefit the particular entrepreneur.
It's made to help the entrepreneur get access to government contracting that would allow them to grow the company in whatever fashion they want.
Your position is that the policy made you money. Therefore, it's achieving its objective, regardless of the impact on indigenous communities across the country.
That could be your interpretation, but it's not the reality. The reality is that there are a lot of government—
No, you weren't repeating what I just said.
In the context of the PSIB, it's spread out across the entire country, and there are lots of people who are working within the framework of that. All of this—
Sir, that actually isn't what you said before.
To broaden this out, from what I understand, your company has received hundreds of millions of dollars in contracts from the Trudeau government since 2015. That was under the framework of a policy that I thought was intended to actually elevate the conditions that indigenous peoples in this country are living in. You're saying, “Well, no. It's good enough that the process made me money.”
Surely, that would seem to go against what Canadians expect of the policy.
My understanding of the value that you put out was $91 million. I've got it in front of me. It was from 2015 until now. At the same time, you can look at the PSAB and PSIB policies, and nowhere will it state—
I'm sorry. My time is about to run out, Chair, and I'd like to move a motion:
That the committee write to INAN to recommend that they investigate abuses in the indigenous procurement system.
I think the need for this motion is self-evident from the testimony we've received.
Thank you very much, Mr. Chair.
I'd like to speak to the motion, Mr. Chair, and the potential misrepresentation by Mr. Yeo about PSAB contracts. As a matter of fact, 33% of all contracts by PSAB must be completed by indigenous service providers, including when work is subcontracted.
Mr. Yeo, you've spoken a great deal about your experience in working with subcontracting, and your expertise at being a contractor of this great magnitude, and how you can solve all the government's problems with all this great general contracting, but you don't actually know the policy.
Just a point of clarification, we've now moved into debate on the motion. The witness is not to enter debate on this motion. It's for members to consider the motion. You can ask rhetorical questions, but the witness will not be engaged in any of this discussion.
I see your hand is up. Is that on a point of order or to speak?
This leads me to believe that, including in the motion made by our colleague to refer this to INAN for further investigation, we should confirm, by way of letter, Mr. Chair, to you, the nature of the PSAB contract policy, and refer that with the motion. It will help the officials a great deal, because they're not used to this kind of stuff, I don't think.
Chair, I would like to speak to this motion, but I'd also like to have just five minutes, so we can discuss it. Again, this goes to show that this is a committee that's working together. We find elements of this motion very interesting, but we'd like to discuss it with the members, so we can come to something pretty—
Yes. I will suspend for five minutes maximum. In the meantime, we'll try to get additional resources.
Mr. Yeo, I'm going to have to ask you just to kind of hold firm for a little while longer, because we might come back to you with some questions from just one last member.
I'll suspend for five minutes.
I call our session back to order.
Mrs. Shanahan, I believe you were first on the speaking list on the motion that is before us.
Thank you, Chair, for giving us those five minutes to speak with all colleagues, because I think it's pretty clear that the testimony we heard today is leading us all in this direction—to have a request for further investigation by INAN.
I think the wording of the motion is satisfactory to us, but I don't know if my colleague has something he wants to add.
To Mrs. Shanahan's point—and to your point, Mr. Chair—it's actually in relation to the content of the letter contained within the motion. I'm not sure if you want to hear my advice on that now or after the vote.
I believe the letter sent to INAN should include the PSAB policy, so they understand this is our concern—that there is a significant breach of what is in the policy.
My preference is this: By coincidence, we have a subcommittee meeting on Thursday. Let's bring it up then. We can probably even get some language drafted by the researcher before that. Then we can look at it. I will certainly incorporate the views of all members, given that I hope it's going to be a unanimous motion.
(Motion agreed to: yeas 10; nays 0)
The Chair: Thank you very much. That concludes this bit of business.
I'm going back to finishing up with our questions.
Mr. Yeo, I'm going to call you back up for your presence.
Ms. Yip, you have the last round of five minutes. It's over to you.
Thank you, Chair.
I'll be sharing my time with Mrs. Shanahan.
Mr. Yeo, you said repeatedly that DND said there was no conflict, and you keep talking about this document.
Can you provide a copy to the committee?
I see in the papers that DND made a statement indicating there was no conflict. It's a protected B document, but I have no issues with supplying you with anything.
It's a good report, but they had trouble putting this together because of the exact nature of how contracting works with TBIPS and SBIPS in professional services. They're all staff augmentation contracts. There potentially could be direct contracts for ArriveCAN only, so they have a challenge against them in trying to decipher all of this data.
Even though we sent an email back to the Auditor General on January 30 indicating that the $4.9 million versus $7.9 million attributed to ArriveCAN.... They themselves have even attributed to.... In paragraph 1.21 on page 5, they indicated that CBSA “expressed concerns that $12.2 million of the $59.5-million estimate could be unrelated to ArriveCAN.”
It's a challenging report, and it was a challenging effort to put it together.
I was delivering a high-assurance security capability to Kandahar and to all of the forward operating bases out in Afghanistan.
Basically, our effort was to ensure that all the pieces and parts were in place so all of our coalition members knew exactly where our friendly forces were, along with a couple of other capabilities.
Thank you very much.
I have a few more questions, Mr. Yeo, to clarify who you are, your background and so on.
How long have you been a member of the Conservative Party?
Well, I've been a member for my entire life. I've always voted Progressive Conservative. At the same time, I believe my last membership was for five years, after my very short stint with the PPC. I came back to the party.
That would be greatly appreciated, because it does seem that there's some confusion between whether it's a membership card or a donation.
It's quite evident that Mr. Yeo does not have a Conservative membership card; therefore, I don't object to the tabling.
Do you see how well we work together, Chair? It's so much appreciated.
Can you tell us, as you are a donor, roughly how much money you have donated to the Conservative Party?
All right, and just for the sake of parity, have you ever been a member of the Liberal Party of Canada?
I should ask maybe one last question. Concerning the People's Party of Canada, you said you're no longer a member. Can you give us the duration of how long you were a member of that party?
A voice: Is there overlap here, too?
It was maybe five months from start to finish, because originally I was in line to be the PC candidate for Ottawa West—Nepean, but I moved over to the PPC after Mr. O'Toole's policies came out.
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