Question Period Note: Procurement & Use of Consultants

What is being done to ensure the contractors are being used prudently?

• I expect that all spending to be well managed and directed to priorities that provide value for Canadians.
• The use of professional and special services is a normal part of government operations.
• Very little of what the government spends goes to management consultants, and in 2025, spending on management consulting and IT services decreased by 10%.
• Professional and special services are mostly used for specialized expertise and capacity needed to advance key priorities.
• For example, the government uses contracting to hire construction firms to build and maintain various assets, to secure nurses for health care in the north, and to manage contaminated sites across the country.
If pressed on IT contracting:
• While contracting for IT services is sometimes necessary, we are focused on building our own digital workforce.
• Through our Digital Talent Strategy, we are investing in skills development and training so the federal public service has the in-house talent needed to deliver secure and efficient digital services.
If pressed on measures being taken to improve procurement:
• To strengthen procurement oversight the government has:
o Updated the Manager’s Guide and introduced new mandatory procedures for procuring professional services.
o Published the Directive on Digital Talent to support the development of a robust internal digital workforce, establishing reasonable thresholds for departments to ascertain whether qualified talent is available before contracting out.
o Completed a horizontal audit to evaluate governance, decision-making, and contracting controls. The audit found that we have processes in place to manage and oversee procurement, in compliance with roles, responsibilities and accountabilities.
o Developed a new Risk and Compliance Process to assess controls and risk in procurement and other key administrative areas, which was launched in June 2025.

Government spending on External Professional Services (EPS) – This is a broad type of services, including, but not limited to health and welfare, engineering and architectural services, scientific services and management consulting – increased by $2.0B (14%) in 2023/24 when compared to fiscal 2022/23. 65% of departments have increased their EPS in fiscal 2023/24 which is consistent with prior year, and the year over year variance or “growth rate” of 14% for the Government of Canada is higher than the average increase for the past 4 years (9.7%).
While absolute procurement spending has increased, the proportion of spending on EPS has decreased slightly when compared to overall adjusted gross expenditures of the past 10 years (9.7% compared to an average of 11.6%). Specifically, total departmental EPS in 2014 was 11.1% of gross external expenditures excluding transfer payments and public debt charges as compared to 12.4% in 2023. Through those years, the range was from 10.6% (2021) to 11.8% (2016 and 2017).
TBS and Public Services and Procurement Canada (PSPC) published the results of their review of contracts with McKinsey & Company in June 2023. The independent audits conducted as part of the review found no evidence of political interference in the contracts awarded to McKinsey. The review also found that certain administrative requirements and procedures were not consistently followed. TBS has since implemented several measures to address these findings. This includes amendments made in June 2023 to the Directive on the Management of Procurement and the Guide to the Proactive Publication of Contracts to increase transparency and strengthen risk-based systems of internal control and documentation requirements.
There have been serious questions raised regarding the integrity of the federal procurement system, including the practices of certain suppliers to the Government of Canada. Recent and ongoing audits (including by the Office of the Auditor General, Indigenous Services Canada, and departmental internal auditors), practice reviews (by the Procurement Ombud), investigations (including by internal departmental investigators, the Privacy Commissioner, and the Royal Canadian Mounted Police) and studies by parliamentary committees concerning the use of professional services have consistently identified gaps in contracting practices and documentation.
In their reports, the Auditor General of Canada and the Procurement Ombud confirmed there are clear rules in place to ensure sound procurement management practices across government, but more can be done. In response, TBS and PSPC announced a series of new measures on March 20, 2024, to strengthen management and oversight of government procurement. This includes undertaking a horizontal audit of professional services contracts governance (complete), updating the Manager’s Guide on procuring professional services (complete), and new mandatory procedures on procuring professional services (compete). TBS and PSPC are continuing to explore and action procurement modernization efforts with the intent to strengthen procurement and management practices.
While contracting is a normal and acceptable delivery strategy, the Government of Canada Digital Talent Strategy supports skills development and training for the federal public service’s digital and IT community and helps ensure it has the in-house digital talent and leadership needed to build, deliver, and maintain simple, secure, and efficient digital services and programs.

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