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Canada’s reliance on IT specialists has led to a ‘shadow bureaucracy’ of private consultants in the federal government

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The Confederation Building reflects off the windows of a building in downtown Ottawa on Wednesday, April 7, 2020. Corporate Canada has played an increasing role in the Canadian public service in recent years. Sean Kilpatrick/The Canadian Press.

This week’s Auditor General’s report on McKinsey & Company is just the latest example of the federal government’s substantial and growing spending on private consultants to deliver public services.

Auditor General Karen Hogan called out the government for spending $200 million on professional services from the multinational consulting firm, between 2011 and 2023.

“We found frequent disregard for procurement policies and guidance and that contracting practices often did not demonstrate value for money,” noted her report.

In 2022, federal spending on all contracts outsourced to the private sector (categorised as “professional and special services” by the Public Accounts of Canada) saw its greatest annual increase since 2006: a 23.6 percent rise from $11.8 billion to $14.6 billion in 2022. In 2023, professional and special services spending again rose to a record-breaking $15.6 billion.

This is despite the federal public sector growing to 274,219 employees in 2023, a 40 percent increase since 2015.

The federal government’s reliance on private firms ranges from businesses big and small. Earlier this year, revelations of the whopping $59.5 million price tag for the development of the ArriveCan customs app raised similar questions around public spending. It was later uncovered that developers at a small firm called Coredal, which later amalgamated into the IT staffing firm GC Strategies, received 118 contracts worth over $107 million since 2011.

In 2023, “professional and special services” spending was nearly double (93 percent) what the Trudeau government spent during its first year in office in 2015. During the 2015 election, the Liberals actually campaigned on cutting spending on consultants and professional services. Nevertheless, by 2016 after their first year in government, spending on professional and special services grew by $262.8 million.

Over the past two governments, the highest spending on consulting services as a share of federal revenue was 3.7 percent, in 2010 and 2021 respectively.

Nearly a decade after their election, insiders told The Hub that the Trudeau government’s $15.6 billion spending on professional and special services proves there is a reliance on the private sector that could become entrenched.

“A busier government needs more work done than a less active government. That actually is the variable that you’ll find underneath the (private contracting) data,” said Michael Wernick, the former clerk of the Privy Council and secretary to cabinet (2016-2019), explaining the reasons behind this growth. Today, the former head of the federal public service is chair of public sector management at the University of Ottawa and a senior advisor to MNP Digital (which the public sector contracts for consultation).

One of the reasons the government often chooses private short-term contractors over their own staff is the difficulty of moving bureaucrats between departments and the costs that come with their long-term employment, including pensions and benefits.

However, alongside this rapid growth in private sector contractors, the government has also been rapidly hiring public servants. In April, public sector employment was up 208,000 from the year previous, outpacing the private sector. Since 2014, the federal public sector grew 40.4 percent according to the Fraser Institute. Since 2015, their compensation has increased nearly 37 percent, adjusted for inflation.

Wernick also points to the launch and expansion of government programs like dental care, the firearms buyback program, and climate rebates as reasons for the substantial growth in private spending. He adds that much of the technical innovation expertise the public service requires can only be found in the private sector.

Quickly responding to COVID-19 also meant relying on the private sector, he said. During the early days of the pandemic, the government scrambled and improvised to provide Canadians with remote services. Passport and immigration backlogs created pain points.

Wernick said the government responded by “throwing people and money at making the pain go away.”

This eventually required tapping IT consulting firms to help develop systems, networks, and servers. The resulting substantial migration of data from in-house physical servers to cloud-based servers was also billed as “services” under the same umbrella as contractors.

Likewise, with 88 percent of Canadians now accessing government services online, there is an expectation for customization and service quality from the government on par with banks or telecom providers, said Wernick.

In 2021, 72 Canadian departments and agencies saw 265 million requests for 1,375 different services, only 23 percent of which were available end-to-end online, according to a report from Toronto Metropolitan University. In order to increase that percentage, “the expertise on where that wave has moved through—to websites to apps to adding AI and chatbots—resides outside of government,” said Wernick.

Others disagree with the approach the government has taken.

“There is a capacity gap that must be fed by consultants, which essentially means the building of a shadow bureaucracy,” said Robert Shepherd, a professor of Canadian public management and federal program evaluation at Carleton University.

“Many IT specialists actually leave the public service to take on higher paying jobs in the private sector. So, there is a constant churn of people entering the public service to fill positions of those who have left, and very few competencies remain.”

In terms of addressing outsized outsourcing, the 2024 federal budget proposed reducing spending on consulting, professional services, and travel by $500 million, or three percent of 2023’s multi-billion dollar professional and special services budget. A February report from the PBO detailed the reductions for each government department.

The greatest cuts, both as a percent of last year’s expenditures and dollar amounts alone, are expected with the Department of Public Works and Government Services and the Department of Foreign Affairs, Trade and Development. Most organisations will reduce their consultation, professional services and travel spending by less than one percent of 2023’s operating budget expenditures, while the majority of larger cuts are planned to occur in smaller organisations.

“​​A major rethink is needed of public service policies, processes and systems. Only then will we have a solid picture of where the public service needs to focus its energies and retool for the future”, said Shephard. “Michael (Wernick) is aware of many of these arguments, but it is certainly not as simple as higher workloads to explain the increase in professional services spending.”

‘They fight to end conquest’: 80 years of reflections on D-Day and the great fight for freedom

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A veteran takes part in the D-Day 75th Anniversary Canadian National Commemorative Ceremony at Juno Beach in Courseulles-Sur-Mer, France on Thursday, June 6, 2019. Sean Kilpatrick/The Canadian Press.

Today marks the 80th anniversary of D-Day, a pivotal moment in the Second World War and a day that helped forge our Canadian identity as a country capable of heroism and committed to defending freedom. Over the last eight decades, many have marked the Allied undertaking,  including presidents, prime ministers, and the commanders who organized the endeavour, to the veterans who fought in it, to the modern-day leaders who have since aimed to uphold the liberties fought for on that momentous day. To mark the occasion, The Hub has collected a variety of these speeches and reflections below.

American President Franklin Delano Roosevelt’s radio address on D-Day, 1944

“They will be sore tired, by night and by day, without rest until the victory is won. The darkness will be rent by noise and flame. Men’s souls will be shaken with the violences of war.

For these men are lately drawn from the ways of peace. They fight not for the lust of conquest. They fight to end conquest. They fight to liberate. They fight to let justice arise, and tolerance and goodwill among all Thy people. They yearn but for the end of battle, for their return to the haven of home.

Some will never return. Embrace these, Father, and receive them, Thy heroic servants, into Thy kingdom.

And for us at home—fathers, mothers, children, wives, sisters, and brothers of brave men overseas—whose thoughts and prayers are ever with them—help us, Almighty God, to rededicate ourselves in renewed faith in Thee in this hour of great sacrifice.”

British Prime Minister Winston Churchill’s address to the House of Commons on D-Day, 1944

“It would be futile to attempt to estimate our final gains at the present time. It is our duty, however, to pay the warmest tribute of gratitude and admiration to General Alexander for the skill with which he has handled this Army of so many different States and nations, and for the tenacity and fortitude with which he has sustained the long periods when success was denied. In General Clark the United States Army has found a fighting leader of the highest order, and the qualities of all Allied troops have shone in noble and unjealous rivalry. The great strength of the Air Forces at our disposal, as well as the preponderance in armour, has undoubtedly contributed in a notable and distinctive manner to the successes which have been achieved. We must await further developments in the Italian theatre before it is possible to estimate the magnitude and quality of our gains, great and timely though they certainly are…

…So far the Commanders who are engaged report that everything is proceeding according to plan. And what a plan! This vast operation is undoubtedly the most complicated and difficult that has ever occurred. It involves tides, wind, waves, visibility, both from the air and the sea standpoint, and the combined employment of land, air, and sea forces in the highest degree of intimacy and in contact with conditions which could not and cannot be fully foreseen.”

Canadian Prime Minister William Lyon Mackenzie King’s radio broadcast on D-Day, 1944

“At half-past three o’clock this morning, the government received official word that the invasion of Western Europe had begun. Word was also received that Canadian troops were among the Allied Forces who landed this morning on the northern coast of France. Canada will be proud to learn that our troops are being supported by units of the Royal Canadian Navy and the Royal Canadian Air Force.

A great landing in Western Europe is the opening of what we hope and believe will be the decisive phase of the war against Germany. Fighting is certain to be heavy, bitter, and costly. We must not expect early results. We should be prepared for local reverses as well as successes. No one can say how long this phase of the war may last. But we have every reason for confidence in the final outcome.

I cannot better express to the people of Canada the government’s feelings at this moment than by giving to you the words of General Crerar, the Canadian Army Commander as conveyed to the Canadian assault forces on the eve of their embarkation. ‘I have,’ said General Crerar, ‘complete confidence in our ability to meet the tests which lie ahead. As Canadians, we inherit military characteristics, which were feared by the enemy in the last Great War.’ I should like to add this word: let the hearts of all in Canada today be filled with silent prayer for the success of our own and Allied forces and for the early liberation of the peoples of Europe.”

King George VI’s speech to the nation on D-Day, 1944

“Four years ago, our Nation and Empire stood alone against an overwhelming enemy, with our backs to the wall. Tested as never before in our history, in God’s providence we survived that test; the spirit of the people, resolute, dedicated, burned like a bright flame, lit surely from those unseen fires which nothing can quench.

Now once more a supreme test has to be faced. This time, the challenge is not to fight to survive but to fight to win the final victory for the good cause. Once again what is demanded from us all is something more than courage and endurance; we need a revival of spirit, a new unconquerable resolve. After nearly five years of toil and suffering, we must renew that crusading impulse on which we entered the war   and met its darkest hour. We and our Allies are sure that our fight is against evil and for a world in which goodness and honour may be the foundation of the life of men in every land.”

Supreme Allied Commander of the Allied Expeditionary Force Dwight D. Eisenhower’s Order of the Day on D-Day, 1944

“Soldiers, Sailors, and Airmen of the Allied Expeditionary Force!

You are about to embark upon the Great Crusade, toward which we have striven these many months. The eyes of the world are upon you. The hope and prayers of liberty-loving people everywhere march with you. In company with our brave Allies and brothers-in-arms on other Fronts, you will bring about the destruction of the German war machine, the elimination of Nazi tyranny over the oppressed peoples of Europe, and security for ourselves in a free world.

Your task will not be an easy one. Your enemy is well trained, well equipped and battle-hardened. He will fight savagely.

But this is the year 1944! Much has happened since the Nazi triumphs of 1940-41. The United Nations have inflicted upon the Germans great defeats, in open battle, man-to-man. Our air offensive has seriously reduced their strength in the air and their capacity to wage war on the ground. Our Home Fronts have given us an overwhelming superiority in weapons and munitions of war, and placed at our disposal great reserves of trained fighting men. The tide has turned! The free men of the world are marching together to Victory!

I have full confidence in your courage, devotion to duty and skill in battle. We will accept nothing less than full Victory!

Good luck! And let us beseech the blessing of Almighty God upon this great and noble undertaking.”

Commander of the First Canadian Army Lieutenant-General Henry D.G. Crerar on D-Day, 1944

“We enter into this decisive phase of the war with full faith in our cause, with calm confidence in our abilities and with grim determination to finish quickly and unmistakably this job we came overseas to do…As in 1918, the Canadians, in Italy and North West Europe will hit the enemy again and again, until at some not distant time, the converging Allied Armies link together and we will be rejoined, in Victory, with our Comrades of I Canadian Corps.”

American war correspondent Martha Gelhorn on D-Day, 1944

“Everyone was violently busy on that crowded, dangerous shore. The pebbles were the size of apples and feet deep, and we stumbled up a road that a huge road shovel was scooping out. We walked with the utmost care between the narrowly placed white tape lines that marked the mine-cleared path, and headed for a tent marked with a red cross…Everyone agreed that the beach was a stinker, and that it would be a great pleasure to get the hell out of here sometimes.”

American President Ronald Reagan’s speech at Pointe du Hoc commemorating D-Day’s 40th anniversary, 1984

“The Rangers looked up and saw the enemy soldiers—the edge of the cliffs shooting down at them with machine guns and throwing grenades. And the American Rangers began to climb. They shot rope ladders over the face of these cliffs and began to pull themselves up. When one Ranger fell, another would take his place. When one rope was cut, a Ranger would grab another and begin his climb again. They climbed, shot back, and held their footing. Soon, one by one, the Rangers pulled themselves over the top, and in seizing the firm land at the top of these cliffs, they began to seize back the continent of Europe. Two hundred and twenty-five came here. After two days of fighting, only 90 could still bear arms.

Behind me is a memorial that symbolizes the Ranger daggers that were thrust into the top of these cliffs. And before me are the men who put them there.

These are the boys of Pointe du Hoc. These are the men who took the cliffs. These are the champions who helped free a continent. These are the heroes who helped end a war.

Gentlemen, I look at you and I think of the words of Stephen Spender’s poem. You are men who in your ‘lives fought for life . . . and left the vivid air signed with your honor.’…

…There was the impossible valor of the Poles who threw themselves between the enemy and the rest of Europe as the invasion took hold, and the unsurpassed courage of the Canadians who had already seen the horrors of war on this coast. They knew what awaited them there, but they would not be deterred. And once they hit Juno Beach, they never looked back…

…The men of Normandy had faith that what they were doing was right, faith that they fought for all humanity, faith that a just God would grant them mercy on this beachhead or on the next. It was the deep knowledge—and pray God we have not lost it—that there is a profound, moral difference between the use of force for liberation and the use of force for conquest. You were here to liberate, not to conquer, and so you and those others did not doubt your cause. And you were right not to doubt.”

Canadian Prime Minister Stephen Harper’s speech at Juno Beach, 2009

“Sixty-five years ago, the free world called for Canada to lead right here at Juno Beach, and lead our soldiers, sailors and airmen did. This was a critical achievement that helped turn the tide of war and rescue the world at its darkest hour. These heroes continue to represent the very best of what it means to be Canadian. We must honour those who served, and the fallen, and help to keep alive the values for which they fought and sacrificed so much…

…Despite the fearful carnage, by the middle of the day the Royal Regina Rifles, the Royal Winnipeg Rifles, The North Shore Regiment, Le Régiment de la Chaudière, the Queen’s Own Rifles, and other Canadian units, had punched through Hitler’s vaunted Atlantic Wall and secured their first objectives.

Canadians were now to fight in Europe until Europe was free of fascism.

And fight they did.

Such was the nature of the Canadian Army, such was their intensely aggressive fighting spirit, that during the Battle of Normandy that followed D-Day, they would suffer the most casualties of any division in the wider British Army Group.

To continue moving forward, while their comrades fell on all sides, they needed remarkable courage.

A courage that no words can express; words fail.”

German Chancellor Gerhard Schroeder’s D-Day commemoration speech, 2004 

“France was liberated from German occupation and we Germans from the Nazi tyranny. This day is much more than victory or defeat. It has become a symbol of the struggle for freedom, democracy and human rights. It is only right that we Germans take part.”

French President Emmanuel Macron’s D-Day commemoration speech, 2019

“Being worthy of the promise of Normandy means never forgetting that free people, when they join forces, can surmount any adversity. We shall never cease to perpetuate the alliance of free peoples. That is what the victorious sides did, when they created the United Nations, the North Atlantic Treaty Organization. That is what a few years later the leaders of Europe did in bringing about the European Union. The lessons of Colleville-sur-Mer are clear: liberty and democracy are inseparable.”

Queen Elizabeth II’s D-Day commemoration speech, 2019

“Seventy-five years ago, hundreds of thousands of young soldiers, sailors, and airmen left these shores in the cause of freedom. In a broadcast to the nation at that time, my Father, King George VI, said: ‘…what is demanded from us all is something more than courage and endurance; we need a revival of spirit, a new unconquerable resolve…’ That is exactly what those brave men brought to the battle, as the fate of the world depended on their success. Many of them would never return, and the heroism, courage, and sacrifice of those who lost their lives will never be forgotten. It is with humility and pleasure, on behalf of the entire country–indeed the whole free world–that I say to you all, thank you.”

Harry Billinge, a British soldier in the 44 Royal Engineer Commandos, remembers the Normandy landings, 2019

“Don’t thank me and don’t say I’m a hero. I’m no hero. I was lucky, I’m here. All the heroes are dead and I’ll never forget them for as long as I live…

…When I landed, it was hell. I’ve never seen anything like it in my life. You had the ships firing over your head and the Germans firing at you from inland. Eighty-eight millimetre guns they used, which would blow you off the face of the Earth.

A mate of mine died in my arms and he was in a field in Caen. He had a three-week-old baby called Nieve. They took me to the 60th anniversary to find out where he was buried. They buried him in a little cemetery called La Deliverande and I go up there and put a cross on his grave.

All I know is Normandy veterans love one another beyond the love of women. If you (were) in a hole with another bloke, you got to know him. Marvellous men. My generation saved the world and I’ll never forget any of them.”