The Canadian government allocated over $19 billion for external professional and special services in the fiscal year 2024-25, marking an increase of nearly $2 billion compared to the previous year and a rise of approximately $8.5 billion since 2020, as per official government data. This surge in expenditure is primarily attributed to heightened investments in engineering and architectural services for initiatives such as shipbuilding, health services to aid refugee claimants, and specialized training for air force pilots and aircrew personnel, according to the Treasury Board of Canada Secretariat.
Government records indicate that a total of $23.1 billion was disbursed for professional and special services for the fiscal year ending on March 31, with around $19.5 billion of that amount directed to external entities. Notably, the Department of National Defence (DND) accounted for $6.9 billion of internal and external professional and special services spending in 2024-25, while Immigration, Refugees and Citizenship Canada (IRCC) expended $1.7 billion.
Over the years, the Liberal government has faced criticism for its extensive reliance on external consulting services. Various public service unions have raised concerns, advocating for tasks to be undertaken by government employees instead.
In a bid to address this issue, then Prime Minister Justin Trudeau pledged in his 2015 election manifesto to diminish the government’s utilization of external consultants. However, between 2015-16 and 2024-25, the government’s expenditure on external services surged from approximately $8.3 billion to around $19.5 billion.
Criticism was particularly directed towards the ArriveCan app project, initiated in April 2020 to monitor health and contact details of individuals entering Canada amid the COVID-19 pandemic. Auditor General Karen Hogan highlighted deficiencies in record-keeping and heavy reliance on external contractors, leading to a substantial escalation in project costs, which escalated to nearly $60 million from an initial contract value of $2.35 million.
In the 2019-20 fiscal year, the government’s public accounts reveal an expenditure of $11 billion on external professional and special services. The Public Service Alliance of Canada (PSAC) disclosed in 2023 that it had negotiated contractual terms to safeguard public service positions and curtail external contracting, alongside securing a commitment from the government to engage in a consultation process regarding contracting issues within the federal public service.
Following his assumption of office in March, Prime Minister Mark Carney pledged during the spring election campaign to trim government spending, notably by substantially reducing dependence on external consultants and enhancing the public service’s capability to recruit expertise internally. The federal budget unveiled recently includes a commitment to slash expenses on management and consulting services by 20% within three years, with the aim of minimizing wasteful expenditure and empowering the public service to assume greater responsibility and accountability.
Even as PSAC is presently in negotiations for contracts encompassing thousands of its members, the organization asserts its ongoing efforts to resist the outsourcing of government services when capable members within the public service can undertake the tasks.