The Canadian government’s expenditure on external professional and special services in the fiscal year 2024-25 surpassed $19 billion, marking an increase of nearly $2 billion compared to the previous year and approximately $8.5 billion since 2020, according to official government reports. The rise in spending can be attributed mainly to increased investments in engineering and architectural services for projects such as shipbuilding, healthcare services to aid refugee claimants, and specialized training for air force pilots and aircrew personnel, as disclosed by the Treasury Board of Canada Secretariat.
Government data reveals that a total of $23.1 billion was allocated to professional and special services during the fiscal year ending on March 31, with approximately $19.5 billion of this amount directed towards external entities. Notably, the Department of National Defence (DND) accounted for $6.9 billion of the total spending on internal and external professional services in 2024-25, while Immigration, Refugees and Citizenship Canada (IRCC) expended $1.7 billion.
Over the years, the Liberal government has faced criticism regarding its substantial expenditure on external consulting services, with public service unions contending that such tasks should be performed by government employees. In his 2015 election manifesto, former Prime Minister Justin Trudeau pledged to decrease the government’s reliance on external consultants. Despite this commitment, between 2015-16 and 2024-25, government spending on external services surged from approximately $8.3 billion to around $19.5 billion.
One particular project that drew criticism was the ArriveCan app initiative, initiated in April 2020 to track health and contact details of individuals entering Canada amidst the COVID-19 pandemic. Auditor General Karen Hogan’s report highlighted poor record-keeping and dependence on external contractors, resulting in the project’s costs ballooning to nearly $60 million, far exceeding the initial contract value of $2.35 million.
In 2019-20, the government disbursed $11 billion towards external professional and special services, as revealed in the public accounts. The Public Service Alliance of Canada (PSAC) disclosed in 2023 that it had negotiated contractual provisions to safeguard public service positions and curtail external contracting, alongside securing a commitment from the government to engage in consultations concerning contracting out within the federal public service.
Prime Minister Mark Carney, who assumed office in March, vowed during the recent election campaign to trim government expenses by significantly reducing reliance on external consultants and enhancing the public service’s internal expertise. The federal budget, unveiled earlier this month, outlined plans to slash expenditures on management and consulting services by 20% within three years to curb wasteful spending and bolster the public service’s capability to handle more duties and be more accountable.
As the PSAC engages in fresh contract negotiations for its numerous members, it underscores its ongoing efforts to resist the outsourcing of government services when internal personnel are capable of performing the tasks.
