Carney government spent over $19B on external consultants in its first year
The federal government spent more than $19 billion on external consultants last year, despite a promise to cut back on its use of outside contractors.
Consultant spending nearly matches final year of Trudeau government
Catherine Morrison · The Canadian Press
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The federal government spent more than $19 billion on external consultants last year, despite a promise to cut back on its use of outside contractors.
The government's audited financial statements for last year, released Friday, show the government spent almost $19.2 billion on external professional and special services in 2025-26.
That's almost as much as the $19.5 billion it spent on those services the year before.
Organizations contracted by the government last year include Bell Canada, KPMG, Microsoft Canada Inc. and the City of Toronto.
The Liberals have been criticized for years over how much they spend on outside consulting. Prime Minister Mark Carney promised in his election platform to significantly reduce the government's reliance on consultants, and to improve the capacity of the public service to hire in-house expertise.
In its budget, released last week, the federal government said it had already taken steps to reduce spending on external management and other consulting services by 20 per cent, in the hopes of reaching annual savings of $900 million by 2028-29.
Sean O'Reilly, president of the Professional Institute of the Public Service of Canada (PIPSC), criticized the government for cutting public servants while not significantly reducing consultant fees. (Justin Tang/The Canadian Press)
Sean O'Reilly, president of the Professional Institute of the Public Service of Canada, said while the federal government keeps promising to cut outsourcing, Canadians keep footing the bill.
"Actual spending in 2025-26 was barely lower than the year before, and projected spending for 2026-27 is the highest on record," he said. "The government is cutting its own public service experts, then paying a premium to rent that expertise back.
"That's not efficiency. That's waste."
Cuts to public service
The Liberals' 2025 budget outlined a plan to slash the public service by 10 per cent by the end of the 2028-29 fiscal year.
The federal public service has shed more than 23,000 staffers over the last two years, according to Canada's parliamentary spending watchdog.
An online tool released by the Office of the Parliamentary Budget Officer in September estimates there were 344,970 federal employees in the second quarter of this year, down 6.5 per cent from two years ago.
The government's financial statements show that the total spent on contracted services last year was $22.8 billion, which includes external contracting and contracts signed with other government departments.
The government's estimates show that number is expected to reach $26.6 billion in 2026-27.
The Public Service Alliance of Canada said in 2023 it negotiated language in contracts to protect public service jobs and reduce outside contracting. It also said the government had committed to a consultation process on the issues associated with contracting out in the federal public service.
The government and the Public Service Alliance of Canada are now again in contract negotiations. Among the union's key issues are job security and the need to end contracting services that it considers "wasteful."
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