New figures show that Ottawa’s outsourcing of the main business pandemic loan program is one of the government’s largest contracts to a major consulting firm, raising renewed concerns about why it had never been publicly disclosed.
The Globe and Mail revealed in February that the $49-billion Canada Emergency Business Account program was mostly administered by Irish-American consultants Accenture Inc.
The contract will likely be examined as part of a House of Commons committee probe into the sharp rise in recent years of government outsourcing to major consulting firms, including McKinsey & Company, KPMG, PricewaterhouseCoopers, Deloitte, Ernst & Young and Accenture.
Neither Ottawa nor Accenture would provide an up-to-date value of the CEBA contract when asked, so The Globe filed an access-to-information request with Export Development Canada, the Crown corporation that is working with Accenture on the program.
The updated financial statements show that the consulting firm was paid $43-million in the 2020-21 fiscal year, $43-million in 2021-22, and $47-million up to the end of January, 2023. The document then adds forecasted spending of $13-million for February and March, for a total of about $146-million in payments to Accenture.
The overall budget to administer CEBA is $189-million, and just $12-million of that has been work done by public servants.
The CEBA contract is the most valuable Accenture has won from the government. For example, according to Ottawa’s online proactive-disclosure database, the company also helped to deliver Canada Emergency Response Benefit payments to individuals, at a cost of $18-million.
Of the six global consulting firms being examined by the House committee, the only contract awarded during the pandemic that was larger was a $198-million, competitively sourced contract to Deloitte to modernize the Old Age Security payment system over 3½ years. OAS is the largest federal program and is forecast to send $75.9-billion to seniors in the 2023-24 fiscal year, according to the 2023 budget. The budget, released last week, dedicated a short section to explaining new funds for OAS system modernization.
It also said the government is planning to save $7.1-billion over five years through reduced spending on outsourcing and travel. That follows many years of increased spending on consultants. In fiscal 2021-22, outsourcing increased to $14.6-billion, 74-per-cent higher than when the Liberals promised in 2015 to cut back on the use of external consultants.
In the government’s online database, Accenture’s CEBA contract is not included and was not otherwise disclosed publicly.
EDC declined to answer questions from The Globe, such as whether the contract was sole-sourced or why Accenture’s role was not publicly known. EDC has said it had to outsource the program because it fell outside of the agency’s core work, which is providing credit for Canadian enterprises doing business abroad.
The EDC financial statements list some of Accenture’s responsibilities as operating a call centre and providing web services. The amounts budgeted for each expense, however, are redacted from the document as being confidential third-party information.
Matt Malone, a law professor who studies trade secrets and commercial confidentiality at Thompson Rivers University in Kamloops, B.C., said he “absolutely” thought the contract should have been disclosed earlier.
“The public’s right to know how the government spends public funding is essential to keeping government accountable,” he said.
Small business groups push for extension to repay outstanding CEBA loans
The EDC financial statements also provide other amounts paid to external consultants, including: $4.5-million to unnamed external legal firms; $2-million to consulting firm KPMG for investigations; and more than $3-million to consulting firm Gartner for support on issuing requests for proposals and a “loan integrity operating model.”
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 the design and implementation of CEBA was set up within two weeks.
An Accenture spokesperson said the company would co-operate with the parliamentary committee’s study of outsourcing.
“Accenture is a long-standing partner of the Canadian government, and we are proud of the work we have done on behalf of Canada’s citizens,” spokesperson Stephanie Malcolm said in an e-mail. “We will work with the committee with regard to its inquiry,”
NDP MP Gord Johns, who sits on the House committee and successfully pushed to broaden the study to include Accenture and a few other firms, said there are still a number of things not known about the company’s work on CEBA.
“There’s no transparency,” Mr. Johns said. “We have no idea, first, why they chose Accenture.”
He also wondered about the firm’s involvement in loan collections. Although CEBA loans are not due in full until Dec. 31, 2025, about 50,000 small businesses were told in the fall to pay back the loans immediately because Ottawa deemed they should not have received them in the first place.
“Is Accenture going to be responsible for calling those loans?” Mr. Johns said. “What role is Accenture going to be playing in those decisions?”
EDC told The Globe earlier this year that Accenture’s current work on CEBA includes building “collection infrastructure” for when loans come due.
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. A 2020-21 report on EDC’s Canada Account shows that financial institutions were paid a total of $92-million in administrative fees in that fiscal year.
Chris Hannay