The federal government paid consulting firm Accenture Inc. at least $61-million to deliver the main pandemic loan program for businesses, according to details that Ottawa has never publicly released and that were obtained under access-to-information law.
A parliamentary committee is currently investigating the sharp growth in the number and value of contracts to consulting firms under the Liberal government. The committee, which was originally examining spending directed just toward McKinsey & Company, voted Feb. 13 to expand its probe to cover five other firms, including Accenture.
The federal proactive-disclosure database lists more than $67-million in contracts given to Accenture during the pandemic, including $18-million to help deliver benefits for individuals. But the database does not mention the largest single contract the consulting firm was given, which was to administer loans to businesses under the Canada Emergency Business Account program.
Ottawa announced the creation of CEBA on April 9, 2020, and sent more than $49-billion to nearly 900,000 businesses. Each loan is worth up to $60,000, and is interest free and partly forgivable if the balance is repaid by Dec. 31, 2023. CEBA was the first and most widely used of the government’s business aids.
Responsibility for CEBA was handed to Export Development Canada, a Crown corporation whose main role is helping Canadian businesses finance deals abroad.
However, EDC actually outsourced most of the work on CEBA to Accenture, according to documents obtained through access-to-information law. Accenture’s role with CEBA has never been publicly acknowledged by the company or EDC.
Briefing materials prepared for senior bureaucrats show that, of the $78.4-million in total costs incurred for the CEBA program up to Aug. 13, 2021, $61.2-million went to Accenture. Costs forecast after August are redacted.
The documents list Accenture’s duties as including website building, running a call centre for applicants, bringing financial institutions on board, handling investigations and collecting data.
A breakdown of how much Accenture charged per duty was redacted by EDC under an exemption for protecting the confidential information of third parties.
The documents say that, in the same time frame, EDC spent $4.9-million of its internal resources on CEBA. Other costs include legal services and taxes.
Neither EDC nor Accenture would say how much the total contract has been worth to date. Both said the arrangement continues.
“Accenture also supports the day-to-day operations of CEBA and the ongoing buildout of collections infrastructure in order to ensure the government is set up for the future collection of the non-forgivable portion of CEBA loans upon loan maturity,” EDC spokesperson Shelley MacLean said in an e-mail.
The Globe has previously reported that CEBA was not originally designed with a mechanism for collecting outstanding loans and EDC did not have the in-house capacity to handle collections, so the task of chasing down business owners was given last year to the Canada Revenue Agency.
EDC said it outsourced the delivery of CEBA because the program fell outside its core expertise as an export credit agency.
EDC was given the task of managing CEBA in large part because it is the steward of the Canada Account, a mechanism for the federal cabinet to lend money to businesses that EDC would otherwise find too risky to support. For example, the Canada Account has been used to fund expansion of the Trans Mountain Pipeline or to purchase billions of dollars of General Motors and Chrysler shares during the Great Recession.
Accenture said it worked with more than 230 financial institutions and, at the program’s height, deployed more than 50 call-centre agents. It said CEBA was initially set up within two weeks.
EDC “worked with Accenture to design, build, implement and operate the infrastructures required, enabling the delivery of loans approved by the government to small businesses across the country,” Accenture spokesperson Stephanie Malcolm said in an e-mail.
Accenture executives have occasionally praised the government’s delivery of CEBA, without disclosing that the firm had been paid to administer it.
“The launch of the Canada Emergency Business Account (CEBA) last year was remarkable,” Patrick Raimondi, Accenture’s managing director of strategy and consulting, and banking lead for Canada, wrote in a May 27, 2021, blog post on the company website that applauds EDC and financial institutions for upgrades of digital systems.
Dan Kelly, president of the Canadian Federation of Independent Business and one of the lead voices advocating for businesses affected by the pandemic, said he was surprised to learn of Accenture’s role in CEBA. He said it never came up in the thousands of contacts his organization had with the government about CEBA.
“We had no idea that Accenture was behind all this,” he said.
He said that while many businesses appreciated the support of the CEBA program, it was often “rage-inducing” to try to get the government to fix technical glitches or fill gaps in eligibility, such as when the initial version of the program left out sole proprietors.
NDP MP Gord Johns, who sits on the operations committee and who introduced the motion to broaden the study of consulting contracts, said it was alarming to hear about Accenture’s involvement with CEBA.
“We assumed it was running through the public service,” he said. “We didn’t know this until now.”
He said the six companies being probed have seen their government contracts balloon from a total of $50-million a year a decade ago to half-a-billion dollars now.
Mr. Johns said the problem with the rise in outsourcing is that it leads to higher cost to taxpayers and a diminishing capacity of the public service to deliver programs, which can become a self-reinforcing cycle.
“I get it,” he said. “There are times when we don’t have internal capacity. The government needs to turn to external help. But this should be a last resort, not the government’s first call.”
The costs of administering CEBA were a regular topic at the meetings of the cross-department group of bureaucrats known as the CEBA working group, the documents show. Minutes from a Sept. 24, 2021, meeting show that the members of the group agreed with EDC that the costs were in the expected range. “In fact, as a % of total program size and complexity, the cost incurred are very reasonable,” according to the minutes.
In addition to the money paid to Accenture, financial institutions were also given a fee to deliver CEBA to their clients, which was 0.4 per cent per year of the outstanding balance of CEBA loans handled by the bank. The total amount of fees paid to banks was redacted in the documents under an exemption covering EDC’s trade secrets.
With a report from James Bradshaw