Government has suspended all contracts with Dalian Enterprise, which is run by a defence department employee
An IT firm run by a defence department employee has been awarded millions of dollars in government contracts since 2015.
Dalian Enterprise has come in for scrutiny recently over its involvement in the development of the ArriveCan app. The company had received $7.9 million for its work on the project as of last March, according to a
recent report from Canada’s auditor general.
The company has received more than $200 million in government contracts since 2015, according to a CBC News analysis of documents tabled in the House of Commons in January.
The documents were filed in response to an order paper question from Conservative MP Dan Muys. They list the contracts awarded to Dalian from each government department between November 2015 and November 2023.
Natural Resources Canada and the RCMP have had contracts with Dalian but they were not listed in the documents. CSIS and the Communications Security Establishment didn’t disclose if they’ve had contracts with the company, citing national security concerns.
Dalian’s president and founder, David Yeo, is also an employee of the Department of National Defence (DND). CTV first reported the news and the department confirmed it to CBC News.
“Due to the serious nature of the concerns raised, DND is launching an internal investigation into the matter. The individual has been suspended while this investigation is underway. We are in the process of suspending contracts with Dalian,” a department spokesperson told CBC News in an email.
Public Services and Procurement Canada announced Friday afternoon it had suspended Dalian from working on existing federal contracts and bidding on new ones.
“PSPC has taken swift action to suspend the security status of Dalian Enterprises (Dalian) in response to information that recently came to light,” a news release from the department said.
CBC News has reached out to Yeo and Dalian for comment but hadn’t received a response at the time of publication.
Government suspends Dalian contracts
The House documents suggest that Dalian’s contracts with DND since 2015 total $1.9 million.
Defence Minister Bill Blair said Thursday during question period that all government contracts with Dalian have been suspended.
“We have suspended all contracts with Dalian, we have suspended the employee and we have launched an investigation on how this person became an employee in the first place,” he said.
DND would not say how long Yeo had been working for the department, but his LinkedIn page suggests he has been there since 1987.
Conservative Leader Pierre Poilievre said the government should refer the matter to the police.
“This individual should be immediately fired. And there should be an immediate police investigation of his conduct and that of the company with which he is associated,” he told reporters during a press conference Thursday.
While the documents only include contracts after November 2015, the
government’s procurement website indicates that the company had received contracts — some worth up to $2 million — under the previous Conservative government as well.
Indigenous Services auditing Dalian contracting
Earlier this week, a government spokesperson told CBC News that Indigenous Services Canada began auditing Dalian’s past work.
Dalian’s website describes itself as “Aboriginally owned, veteran operated.” In October, Yeo told a House committee studying ArriveCan that he is the great-grandson of Chief Robert Franklin of the Alderville First Nation in Ontario.
The government has pushed to ensure that
a minimum of 5 per cent of federal contracts are awarded to Indigenous businesses.
But another IT firm, Botler AI, raised concerns about Dalian’s contracting processes during a separate October committee hearing.
Botler’s chief executive, Ritika Dutt, told MPs that she fears Dalian’s procurement policies are “another example of monetization and theft using the trauma of marginalized communities.”
Dutt claimed Dalian is used by other companies who want government business because they can “go after Aboriginal contracts” by bidding with Yeo’s firm as a joint operation.
Yeo denied Dutt’s claims, telling MPs that they “don’t ring true.”
But after reviewing some of the evidence tabled at the committee, Liberal MP Jenica Atwin said “it’s clear to me” that Dalian “appears to be the flow-through as an Indigenous-led organization.”
“It is deeply disturbing to me that it was used in such a manner,” Atwin said.
When questioned about his firm’s work on the ArriveCan app last year, Yeo struggled to tell MPs what exactly his company did on the file.
He conceded that his two-person firm usually subcontracts out the “daily” work on federal projects to other businesses.
Dalian bids for tenders set aside for Indigenous businesses, collects the government money and disperses funds to the relevant parties that do work on a particular project, he said.
Yeo ran as a candidate for the People’s Party of Canada in the 2021 election. The party put out a statement Thursday denouncing Yeo’s involvement with ArriveCan.
“During the candidate vetting process, he did not disclose to us that his company had received a government contract to work on the ArriveCan project, as this would obviously have been grounds for rejecting his candidacy,” the party said in a statement on X, formerly Twitter.
With files from Andrew Ryan and John Paul Tasker
