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 nine 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
• Three cases that were publicly disclosed by PSPC on November 6, 2024, and
• Two cases that were publicly disclosed by PSPC in Spring 2025

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. To date, several actions have been taken to reinforce the capacity to detect and deter overbilling fraud schemes, and PSPC is actively working on implementing further measures.

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 $4.1 million of the $4.5 million deemed to have been fraudulent billed
  • On March 7, 2025, the Department of Justice filed a Statement of Claim in the Ontario Superior Court of Justice against the prime contractors who had not agreed to repay the Government of Canada, along with the subcontractor they engaged
  • The defendants were officially served with the Notice of Action and Statement of Claim in late July 2025
  • The Statement of Claim seeks approximately $400,000 from the defendants. This includes the original outstanding amounts owed to Canada ($320,000), as well as other costs (approximately $80,000)
  • For the cases disclosed in November 2024, agreements are in place to repay $115,000 of the approximately $800,000 deemed to have been overbilled