MPs Question Government Witnesses About Billions Spent on Outsourcing

The Peace Tower and Parliament Hill on Sept. 1, 2020. (Adrian Wyld/The Canadian Press)

MPs questioned government witnesses about billions spent on outsourcing contracts by Ottawa and criticized the level of oversight during a House of Commons committee meeting on Oct. 3.

“Who is looking after taxpayers? Who is assuring accountability?” asked Conservative MP Kelly McCauley. He said $16 billion was spent in a year on outsourcing, which would be around a third of the $50 billion that is spent annually on salaries.

In an email to The Epoch Times, McCauley said that $16 billion is a number he “heard bandied about.” He said he asked the Treasury Board for the amount spent on outsourcing for the last year, but they didn’t provide it.

“My focus is on the massive amount being sent to Deloitte, McKinsey, etc., and the complete abdication by TBS [Treasury Board] on their oversight duties and the lack of accountability from the departments on the spending,” McCauley wrote.

“Outsourcing has risen dramatically under the Liberals,” he added.

$24 Billion Spent on Goods, Services, and Construction

Mollie Royds, associate assistant deputy minister of contracting at the Department of Public Works, testified that the department buys on behalf of other “federal organizations some $24 billion worth of goods, services, and construction each year from nearly 10,000 suppliers.” She added that “procurements range from office supplies to military equipment and everything in between.”

Emilio Franco, executive director of contracting at the Treasury Board, said that “audits are done by the internal audit department of each organization, many of which are published on their departmental websites, and the auditor general reports are public for all.”

Franco said he would provide specific audits upon request from the committee.

McCauley asked the committee members: “Real quick, yes or no, if you believe taxpayers are getting fair value for money, the billions being spent on outside contracts,” and did not receive a direct answer.

McCauley said within a three-week period, there were three $72,000 payouts for security and event security services.

“Deloitte was hired three separate times to see if the contract was awarded fairly in a transparent manner. It’s a quarter of a million dollars repeating the same item three times in a row. ... Do you find that justified?” he said.

Royds said that she could not comment about that specific situation, but that “there are a variety of reasons that we do outsource specific tasks, whether it’s for specialized skills, or given a search capacity or other elements that are that are lacking in our in-house expertise.”

When questioned about whether anyone was keeping track of amendments to contracts and supervising the spending to see if it came in at the same price as estimated, Franco said the federal government handles about 400,000 contracts a year and the majority are simple, straightforward, and match the initial contract value.

However, there “are a number of complex procurements that are conducted by the Government of Canada every year... these procurements are complex in their nature. Often the deliverables or the final outcome is uncertain,” he said.

These complex cases that may increase in value are not tracked at a “granular level,” he added. “But we can say that the information is typically publicly disclosed through our practice of disclosure, and where all contracts and amendments over $10,000 are made publicly available on the Open Government portal.”

New Democrat MP Gord Johns was concerned with the amount spent on individual consultants and questioned whether public service cuts made from 2010 to 2015  were responsible for an increase in outsourcing. Royds replied that she could not speak to a particular trend.

McCauley wanted to know the best way to make sure taxpayers were getting the most for their money moving forward, and the panel continued to say that the responsibility for oversight of spending was within the specific department that spent it. They said they would try to bring forward specific departments to speak on specific examples as requested.

Outsourcing Contracts Ends Up Costing Twice the Original Price: PIPSC

The Professional Institute of the Public Service of Canada (PIPSC) said in January 2020 that $11.9 billion was spent on outsourcing contracts from 2011 to 2018 and that the contracts end up costing the public twice the original price.

“Shockingly, spending on IT consultants more than doubled—from $605 million in 2011 to over $1.3 billion in 2018—totalling $8.5 billion in that time period,” PIPSC said in a press release.

“Enough is enough. It should be easier to hire and train public servants than to pay a shadow public service that ends up costing twice as much [as] originally expected,” said PIPSC president Debi Daviau.

“It’s time for the federal government to reduce outsourcing, as promised by the Liberal government in 2015, and to increase requirements for outsourcing.”