Consultants advised feds on saving money on consultants

Finance Minister Chrystia Freeland clarified August 22 that 'savings' meant reallocating spending to other programs. Treasury Board President Anita Anand concurred with Freeland.

Consultants advised feds on saving money on consultants
THE CANADIAN PRESS/Adrian Wyld
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Ottawa spent $700,000 on consultants for advice on cutting costs on consultants. Yeah, you read that right. Noticeably absent from the tips and tricks offered by the paid experts are cutting consultancy costs.

“This is about smarter, not smaller, government,” explained Treasury Board President Anita Anand.

The details of the third-party contracts became public through an order paper question posed by NDP MP Gord Johns, reported Blacklock's Reporter.

According to documents tabled in the House of Commons, KPMG, one of the management companies contracted by federal managers, assisted Natural Resources Canada “to develop recommendations that could be considered as options to ensure Canadians’ tax dollars are being used efficiently and being invested in the priorities that matter most to them.”

KPMG received $669,650 for their cost-cutting suggestions.

Johns asked:

With regard to the President of the Treasury Board’s directive to find specific cuts within the departments, were any third-party management firms contracted to assist with identifying spending cuts?

Anand wrote in the Inquiry: "This is not about doing more with less or arbitrary cost cutting. This is about ensuring public servants and public funds are focused on the priorities that matter most."

Reducing consulting contracts became a staple Liberal promise that remains largely unfulfilled, as cabinet pledged “$15 billions of savings” in Budget 2023. 

According to the budgetary document, A Made In Canada Plan, federal spending is estimated at $497 billion. With pledged “savings,” the federal government hopes to spend $7.1 billion less on consulting, other professional services and travel over five years starting this fiscal year.

On January 30, witnesses forewarned the Commons government operations committee about the 'uncontrolled' spending on consultants. “It’s hard to tell from the publicly available data what a given contract was for,” testified Sean Boots, senior policy adviser with the Treasury Board. “That’s especially true for management consulting firms that provide a very wide range of services to government departments.”

“It’s hard to tell what work was involved let alone how successfully the contract turned out or not,” he said, acknowledging numerous cases where consultants received payment for checking the work of other consultants.

“Especially for large IT projects, one management consulting firm might be hired to oversee the work of another management consulting firm,” said Boots. “That can lead to a set of dynamics where each firm is not necessarily motivated to hold the other to account given their positions will likely be reversed on other future projects.”

Finance Minister Chrystia Freeland clarified August 22 that “savings” meant reallocating spending to other programs, reported Blacklock’s Reporter. “The fiscal forecast in the budget that we tabled in the spring includes $15 billion in savings so we could fund the programs outlined in the budget,” she said, providing nothing more than a clever misdirection.

The Finance Department expects $15 billion in reallocated spending over the next five years and an additional $4 billion afterward.

“How do you convince Canadians that you are serious about this?” asked a reporter. Freeland replied: “We are Liberals.”

Anand concurred with Freeland, claiming the “savings” pledge never implied less overall spending. “I asked all of my ministerial colleagues to ensure they are examining their respective portfolios so we can deliver a budget commitment for $15 billion over five years in refocused spending,” she said.

“We are refocusing our spending from pandemic-type spending to the broader economic priorities of the country. Savings from underutilized government spending will be shifted to priorities like health care and the clean economy,” added Anand.

According to Public Accounts, Parliament has not balanced a budget since 2007, running successive deficits that raised the federal debt past $1.1 trillion.

Federal debt interest charges are projected to rise from a pre-pandemic level of $20.4 billion to $43.9 billion this fiscal year — nearly double the national defence budget, according to Blacklock’s Reporter, who said taxpayers can expect federal charges to climb further in five years and exceed $50 billion by 2027.

“We have looked at the impact of increasing interest rates as well as the increase in the stock of debt, and we estimate that in the next four years, interest payments will probably double,” Parliamentary Budget Officer (PBO) Yves Giroux testified September 27, 2022, at the Senate banking committee.

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