Feds Plan to Spend $2.2 Billion More on Consultants: Parliamentary Budget Office

Parliamentary Budget Officer Yves Giroux waits to appear before the Standing Senate Committee on National Finance in Ottawa on Oct. 25, 2022. Adrian Wyld/The Canadian Press

Federal spending on consultants will jump 13 percent this year as the Liberal government intends to pay more for their services, according to a report by the Parliamentary Budget Office (PBO).

“The Government is proposing to raise planned spending on professional & special services to $19.5 billion, an increase of $2.2 billion (13 percent) from last year’s Main Estimates,” said the report, titled “The Government’s Expenditure Plan and Main Estimates for 2023–24.”

Included within “Professional & Special Services” are 14 categories, of which the three largest areas of spending are engineering and architectural services, business services, and health and welfare services, said the report, published on March 3.

“Since 2015–16, there has been significant growth in spending on health and welfare services (115 percent) and management consulting (95 percent),” the PBO noted, as first reported by Blacklock’s Reporter.

“While management consulting only accounts for a small portion (5 percent) of overall spending on professional and special services, it has shown consistent growth year after year.”

According to the report, management consulting services that the government spent on include financial management, transportation, economic development, environmental planning, and public consultation.

‘Shadow Public Service’

At a hearing before the Commons government operations committee on Jan. 30, the president of the Professional Institute of the Public Service testified that years of increased hiring of consultants had created a “shadow public service” operating alongside the government workforce.

“This shadow public service plays by an entirely different set of rules,” said Jennifer Carr, who headed the union. “They are not hired based on merit, representation, fairness or transparency.”

She added that the consultants were not subjected to budget restraints or hiring freezes by federal departments or agencies.

“And they are not accountable to the Canadian public, yet, year after year, the federal government continues to make costly decisions on outsourcing,” Carr said.

‘Hard to Tell’

Sean Boots, a senior policy adviser with the Treasury Board who also testified at the hearing, said numerous contracts had been awarded to private consultants and it has become difficult to scrutinize the spending.

“Even after the data cleaning we did, it’s hard to tell, from the publicly available data, what a given contract was for,” Boots told MPs.

“That’s especially true for management consulting firms, which provide a very wide range of services to government departments.”

The policy adviser said a contract could be described merely as “management consulting” in a database, meaning it could be anything from advisory work to IT implementation to subcontracting other vendors.

“It’s hard to tell what work was involved, let alone how successfully the project turned out.”

Boots said he noticed a phenomenon where consultants were hired to check the work of other consultants when large sums were poured into such contracts.

“Especially for large IT projects—one management consulting firm might be hired to oversee the work of another management consulting firm,” he said.

“That can lead to a set of dynamics in which each firm isn’t necessarily motivated to hold the other to account, given that their positions will likely be reversed on other, future projects.”