Canada ‘Got Fleeced’ for Spending $54 Million on ArriveCAN App: Tech Leaders

The federal government recently halted the mandatory use of its ArriveCAN app for travellers arriving in Canada, along with easing other COVID-19 measures. The app was criticized by the travel industry and also border officials for causing a decline in travel and also delays at airports.

But now that the app’s requirement has been axed, the Globe and Mail asked tech leaders what they thought about the app’s price tag at a whopping $54 million, more than double its original budget.

The Canadian government used 23 separate contractors to develop ArriveCAN and also unnamed additional subcontractors, instead of just sticking to a single app developer.

According to Neil Selfe, founder and chief executive officer of INFOR Financial Group Inc., he told the Globe, “the people in the Canadian technology community that I’ve talked to are outraged, and I’ve talked to a lot today.”

Analysis of ArriveCAN’s federal contracts broken down by the Globe shows Ottawa-based GCstrategies received $9 million, followed by IBISKA at $8.07 million, Amazon Web Services at $4.29 million and more, as of March 31, 2022.

GCstrategies has since received three contracts worth $45.2 million from the federal government. Kristian Firth, managing partner of the firm, told the Globe it has no offices and is virtual only, with its employee headcount at just one to four people.

“It is not uncommon for us to have over 75 subcontractors at one time helping us deliver our projects to multiple departments. At present, we are working with over a dozen government departments and 80 independent consultants under multiple contracts for distinct deliverables,” said Firth.

GCstrategies says it cannot reveal the identities of subcontractors because of confidentiality agreements in federal procurement rules. The company also worked on the COVID Alert which cost the federal government about $20 million.

arrivecan app spending

The investigation by the Globe says the federal government has kept some contractor names confidential. Matt Malone, an assistant professor of law at Thompson Rivers University, has been investigating the ArriveCAN app. He said, “If you create the possibility of shrouding in confidentiality all aspects of the work that was done, what kind of transparency and accountability is that?”.

Fahd Ananta, an investor at Roach Capital, said Canada got ripped off. “It’s outrageous,” he told the Globe. “In my view, I think they got fleeced.” Normally, an app for an enterprise client would cost no more than $1.5 million.

Nick Van Weerdenburg, CEO of Toronto-based Rangle, said his company could have built the “simple” ArriveCAN app in less than month for just $250,000. He called it “completely unacceptable” that the feds used a company that outsourced to subcontractors, when other Canadian tech firms could have done the job.

It’s possible the unidentified subcontractors could have been from outside of Canada, but at this point we’ll never know. If we take the cost of ArriveCAN at $54 million and COVID Alert at $20 million, that’s $74 million spent on two apps so far by the federal government.