Question Period Note: Fraudulent Billing

The Government of Canada is pursuing efforts to investigate and deter fraudulent billing by individuals working as sub-contractors on federal professional services contracts.

• Public Services and Procurement Canada has detected several fraudulent billing schemes undertaken by individuals who worked as subcontractors on federal professional services contracts
  • This has been the result of Public Services and Procurement Canada’s efforts over the last five years to strengthen its approach to detecting fraudulent activity and other types of wrongdoing
  • Public Services and Procurement Canada is actively pursuing the recovery of illegitimate amounts billed to the Government of Canada and referring cases to the Royal Canadian Mounted Police for criminal investigation

Since March 2024, Public Services and Procurement Canada (PSPC) disclosed seven cases of fraudulent billing by professional services subcontractors (i.e. individuals who were subcontracted) who were employed by prime contractors that held multiple contracts with a number of federal departments and agencies. These cases have been referred to the RCMP for criminal investigation:

• One older case that was referred by PSPC prior to March 20, 2024 (this case was publicly disclosed when the RCMP laid charges in July 9, 2024)
• Three cases that were publicly disclosed by PSPC on March 20, 2024 and
• Three cases that were publicly disclosed by PSPC on November 6, 2024.

PSPC has a robust fraud risk management framework in place to prevent, detect and respond to wrongdoing in order to safeguard the integrity of the federal procurement system. This approach includes the use of a variety of tools to actively detect fraudulent activity, and respond to alleged misconduct that the Government of Canada is being defrauded in either a specific contract or on a broader scale.

PSPC employs active measures to raise awareness among procurement officers on how to identify potential instances as well as the use of data analytics and tips from the public to identify potential instances of fraud and wrongdoing. In order to respond to alleged instances, the department has an investigatory capacity to examine allegations that the Government of Canada is being or has been defrauded within its procurements.

The focus of PSPC’s administrative investigations have been on the illegitimate billing practices of sub-contractors, not the prime contractors. That said, Canada has provisions in its contracts to recover these illegitimate payments and is working with the impacted prime contractors to recover these funds.

• Public Services and Procurement Canada has reached agreements with the firms impacted by the three cases disclosed in March 2024 to repay approximately $3 million
  • On February 7, 2025, the Department of Justice filed a Notice of Action in the Ontario Superior Court of Justice against several prime contractors who have not agreed to repay the Government of Canada, along with the subcontractor they engaged
  • The Notice of Action seeks approximately $1.6 million from the defendants. This includes the original outstanding amounts owed to Canada ($1.3 million), as well as other costs (approximately $300,000)