The Canadian government allocated over $19 billion for external professional and specialized services in the fiscal year 2024-25, marking a rise of nearly $2 billion from the previous year and approximately $8.5 billion since 2020, as per official government data. The surge in expenditure is primarily attributed to increased investments in engineering and architectural services for projects like shipbuilding, healthcare services to aid refugee claimants, and specialized training for air force pilots and aircrew personnel, as highlighted by the Treasury Board of Canada Secretariat.
Reports indicate that a total of $23.1 billion was disbursed for professional and specialized services in the financial year ending on March 31, with approximately $19.5 billion directed towards external entities. Notably, the Department of National Defence (DND) contributed $6.9 billion for both internal and external professional services in 2024-25, while Immigration, Refugees and Citizenship Canada (IRCC) expended $1.7 billion.
Over the years, the Liberal government has faced criticism for its significant spending on external consulting services, especially from public service unions advocating for tasks to be handled by government employees. Former Prime Minister Justin Trudeau, in his 2015 election manifesto, pledged to decrease the reliance on external consultants by the government. Despite this promise, between 2015-16 and 2024-25, expenditures on external services escalated from around $8.3 billion to about $19.5 billion.
One of the contentious projects that drew criticism towards the Liberal government was the ArriveCan app initiative, launched in April 2020 to track health and contact details of individuals entering Canada during the COVID-19 crisis. Auditor General Karen Hogan’s report revealed that poor record-keeping practices and dependence on external contractors led to a substantial increase in the project’s cost, reaching close to $60 million from an initial contract value of $2.35 million.
In 2019-20, the government’s public accounts disclosed a spending of $11 billion on external professional and specialized services. The Public Service Alliance of Canada (PSAC) disclosed in 2023 that it had negotiated terms in contracts to safeguard public service positions and diminish external contracting. Additionally, the government committed to engaging in a consultation process regarding the concerns associated with outsourcing in the federal public service.
Prime Minister Mark Carney, who assumed office in March, vowed during the recent election campaign to reduce government expenditure by notably minimizing reliance on external consultants and enhancing the public service’s ability to recruit expertise internally. In the latest budget release, the federal government affirmed its intention to slash expenses on management and consulting services by 20% within three years to curtail wasteful spending and empower the public service to assume more responsibilities and accountability.
As negotiations for contracts involving thousands of PSAC members are underway, the association emphasized its ongoing efforts to thwart the outsourcing of government services when such tasks can be handled by its members directly.