ArriveCAN | A new company is in the crosshairs of federal authorities

(Ottawa) The front of the financial fiasco surrounding the design of the application ArriveCAN is expanding: a second company that won contracts as part of this project, and which also has only two employees, is the subject of scrutiny by federal authorities.

Dalian Enterprises Inc., which has won numerous federal government contracts in recent years thanks to its recognized status as an indigenous business, is the subject of audits by the Department of Indigenous Services Canada (ISC), at the request of the Ministry of Public Services and Procurement (PSPC), learned The Press.

The chairman and founder of Dalian Enterprises Inc., David Yeo, claims to have indigenous roots. This is one of the criteria for obtaining Indigenous business status with the federal government.

But in addition to demonstrating that it is majority owned by members of the First Nations, Inuit or Métis, the company must also demonstrate that it is it that carries out the work required in the contracts.

In October, the directors of the Montreal firm Botler AI, Ritika Dutt and Amir Morv, raised questions before a parliamentary committee about the behavior of Dalian Enterprises Inc. which would have allowed her to obtain a contract reserved for Aboriginal people to which she was not entitled, according to them.

“We were disgusted,” Mr. Morv said.

Among other things, they had accused Dalian Enterprises of using their identities without their knowledge or consent in a “ghost company contracting” scheme between GC Strategies, Dalian Enterprises and another company named Coradix Technology Consulting in as part of a project not linked to ArriveCAN. In other words, Dalian and Coradix subcontracted the work to GC Strategies which, in turn, subcontracted it to Botler AI.

A facade “

M^me Dutt had argued that Dalian’s claimed indigenous ownership of at least 51% was just a front that allowed Coradix to obtain contracts reserved for indigenous contractors, but in reality subcontracted them to companies non-natives, which is contrary to the spirit of federal rules. She accused them of “monetization and theft using the trauma of marginalized communities.”

“I think it’s a slap in the face for Indigenous businesses,” she added. They thought they had an opportunity to obtain these contracts, but in reality they were being subcontracted and carried out through parties who were, in fact, not eligible for these funds. »

“In view of the allegations of wrongdoing as well as the reviews and investigations then underway, Public Services and Procurement Canada contacted ISC on November 29, 2023 to verify whether it had conducted post-award audits of the contracts with Dalian Enterprises,” said SPAC spokesperson Michèle LaRose.

“Having obtained confirmation that such audits had not been conducted, on December 5, 2023, PSPC requested SAC to conduct post-award audits of active contracts. These audits are ongoing. »

5% target

In 2021, the Trudeau government has set itself the objective of annually granting at least 5% of the total value of all federal public contracts to Indigenous businesses, the equivalent of the proportion of the Indigenous population in the country. This represents approximately 1 billion per year.

This “mandatory minimum of 5% in procurement” target is implemented in three phases. All organizations must meet or exceed this target by March 31, 2025.

Indigenous Services Canada was given the mandate to establish and manage the Indigenous Business Directory. This department is also responsible for verifying the eligibility of Indigenous businesses. The joint venture formed by Dalian Enterprises and Coradix Technology Consulting is listed in the Indigenous Business Directory.

“SAC has confirmed that Dalian Enterprises did indeed meet the criteria of the Indigenous Business Procurement Strategy at the time of the company’s initial listing in the Directory,” said Ms.^me The Rose. She said the ministry had never conducted an audit of Dalian Enterprises since its registration.

Dalian Enterprises obtained 7.9 million contracts as part of the development ofArriveCAN, which places it just behind GC Strategies, which took in 19.1 million. The Auditor General estimated that the total value of contracts related to the application ArriveCAN amounts to 59.5 million.

Dalian Enterprises Inc. Chairman and Founder David Yeo did not respond to messages from The Press Friday. “In my opinion, these kinds of accusations ring false,” he reacted during his appearance before the parliamentary committee in October.

He also said he was “very proud” to be part of the Aboriginal Business Procurement Strategy and to have participated in its creation, he who presents himself as a direct descendant of Aboriginal leader Robert Franklin, signatory of the Williams treaties with the federal government in 1923.

The president of Coradix Technology Consulting, Colin Wood, also noted that there was “some confusion” in his opinion surrounding this policy. “The strategy aims to help Indigenous people build, develop and grow their businesses,” he said. Its objective is not to hire Indigenous information technology contractors. »

Some of Botler AI’s claims were questioned Thursday by Cameron MacDonald and Antonio Utano, the two officials suspended in the wake of the scandal.ArriveCAN. They accused the firm of wanting to trade the information it had collected against contracts with the Canada Border Services Agency (CBSA). The Royal Canadian Mounted Police still opened an investigation after Botler AI’s allegations were brought to its attention by the CBSA.

With William Leclerc, The Press