The federal government will announce new guidelines Thursday aimed at cutting back on the use of outside consultants, a move that is part of an effort to shave about $15-billion from existing spending plans.
Treasury Board President Anita Anand will release a new “manager’s guide” for public servants who are responsible for signing off on billions of dollars in outsourcing and procurement each year.
The announcement will be made one day after The Globe and Mail reported that the RCMP is investigating allegations of misconduct involving an outsourced IT project at the Canada Border Services Agency. The Globe report also said the agency received warnings about cozy ties between IT consultants and federal officials.
“We’re certainly taking a very close examination of outsourcing contracts and I’m going to have more to say on outsourcing guidelines tomorrow,” Ms. Anand told The Globe.
Prime Minister Justin Trudeau commented Wednesday on the police investigation.
“Obviously, the RCMP will be doing its work. This is something we need to take very seriously,” he said on Parliament Hill in response to a question from The Globe.
According to a senior government official, Ms. Anand’s announcement Thursday will include a new manager’s guide that aims to reduce the overall cost of federal outsourcing. The guide will also include suggestions for ensuring contracts are structured to deliver the best value for taxpayers and that they can be effectively managed.
The Globe is not identifying the official as they were not authorized to comment about a coming announcement.
Opposition parties said Wednesday that the RCMP investigation supports their criticism of the Liberal government’s approach to consultants.
Conservative Treasury Board critic Stephanie Kusie, who is part of a study of outsourcing spending at the government operations committee, said MPs are planning hearings focused on how to promote ethical procurement.
“Once again contracting practices are called into question under this Liberal government,” she said.
NDP Leader Jagmeet Singh said the Liberal government wastes money through the excessive use of private consultants.
“I think this is another indictment of the Liberal government that continues to be obsessed with outsourcing to the direct harm of Canadians,” he said.
“This government continues to outsource instead of using the incredibly talented public service that we have to do the work that they can absolutely do internally. And again and again, we’re seeing outsourcing result in not just failures to deliver the proper services, but now potential criminal investigations into wrongdoing.”
The Globe reported Wednesday that the RCMP is investigating allegations that were first brought to the attention of the border agency by two tech entrepreneurs. They performed work for the agency related to a pilot project to test software aimed at supporting victims of sexual harassment. They alerted top agency officials about improper contracting practices and cozy relationships between the public service and private firms.
The two entrepreneurs – Ritika Dutt and Amir Morv, co-founders of Botler – said their initial warning in September, 2021, appears to have been ignored. They submitted a more detailed report to the agency in November, 2022. The agency told The Globe that in response to that report, it referred the allegations to the RCMP.
The agency said it has also launched its own investigation and internal audits and is requiring employees with contracting authority to retake procurement certification courses by the end of the fall.
The small pilot project, worth less than $500,000, was funded from a larger $21.2-million contract for general services that was also used by the agency to fund outsourcing work related to the ArriveCan app, the tool for travellers during the pandemic that generated controversy after its more than $54-million cost to build and maintain was first revealed by The Globe late last year.
Federal spending on outsourcing increased to $14.6-billion last year, 74 per cent higher than when the Liberals promised in 2015 to cut back on the use of external consultants.
In the case of the Botler pilot project, the CBSA contacted Ms. Dutt and Mr. Morv via Kristian Firth, who is the managing partner of a two-person IT hiring firm called GCStrategies.
Mr. Firth also arranged numerous meetings across government with the goal of securing a much larger contract to have Botler software used as a government-wide option for the public service.
E-mails from 2018 released through access to information show Mr. Firth would also arrange meetings between other technology companies and Marc Brouillard, who was then the chief technology officer for the federal government.
Neither Mr. Firth nor his colleague Darren Anthony have ever registered as lobbyists. They did not respond to a list of questions, including why they do not register as lobbyists.
Legal experts say the situation raises questions as to whether IT hiring shops like GCStrategies are effectively acting as lobbyists for other companies. The Lobbying Act requires lobbyists to report certain meetings with government officials on a frequently updated public registry.
The Lobbying Commissioner’s website defines lobbying as communicating with public office holders with regard to several different types of work, including “the awarding of federal grants, contributions or other financial benefits and the awarding of a federal government contract (for consultant lobbyists only.)”
The commissioner defines a consultant lobbyist as a category distinct from an in-house lobbyist, who communicates with government on behalf of the company that employs them. A consultant lobbyist is defined as someone who is paid to communicate with public office holders on behalf of their clients.
An in-house lobbyist is only required to register if lobbying takes up 20 per cent or more of their time.
Scott Thurlow, an Ottawa-based lawyer, said that even if an IT company believes its activities fall under the in-house category, he generally advises clients to err on the side of registering.
“My advice is always just to register. I actually have slides in my presentation to clients that says, ‘Do you want to be doing math, or do you want to be conspicuously transparent in the public? Always the latter.’”
Thompson Rivers University Faculty of Law assistant professor Matt Malone, who has extensively researched federal outsourcing on ArriveCan, said current practices are not transparent.
“The proliferation of IT consultants who outsource work in exchange for exorbitant consulting fees needs to be reined in with better lobbying and transparency legislation,” he said. “Who we hire to do this work, and how much we pay them, must be open by default.”
Duff Conacher, co-founder of the advocacy group Democracy Watch, said federal watchdogs responsible for public service integrity and lobbying rules should also be investigating the issue.
“The evidence points to ongoing systemic flaws and loopholes in the enforcement of the ethics, transparency and value for money rules for contracting out by the federal government, and this situation is likely the tip of an iceberg of similar wrongdoing in many government institutions and agencies,” he said.
Manon Dion, a spokesperson for the lobbying commissioner, declined to comment on the issues raised by Botler.
“As the RCMP is looking into this matter, it would be inappropriate to comment further on this,” she said.