OTTAWA–As the federal Conservatives cut the ranks of the public service, spending on extra professional services for departments and agencies has been steadily increasing to more than $10 billion a year, a Torstar News Services analysis reveals.
Federal spending woes
Federal departments and agencies spent more than $10 billion a year for the past four years on professional services – work like management consulting, IT assistance, and engineering, purchased from external contractors or from other government entities. That’s up from the $7.8 billion spent in 2006, a 27.8 per cent increase under Prime Minister Stephen Harper’s tenure.
Over the seven year period, the federal government has spent more than $67 billion on outside professional help. The bulk of that money – about $41 billion – has been spent over the past four fiscal years alone.
Treasury Board officials say the contracting is required to address unexpected fluctuations in departmental workload, or to acquire special expertise. But critics say it’s an attack on the public service that the Conservatives have never fully trusted – one that will limit the public’s access to information and could end up costing the federal coffers more.
“We have no evidence that the use of external consultants actually costs the taxpayer less,” said Mathieu Ravignat, the NDP’s Treasury Board critic, on Wednesday.
“I think Canadians are better served by (the public service) than a consulting company that Canadians know very little about.”
The number of contracted out services could continue to increase as the government works its way through plans to eliminate 19,200 positions from the core public service by 2015.
Ravignat said the increased reliance on private contractors spells trouble for transparency in government operations – the public can request to access information from public servants, but not from a private management consulting firm.
“It’s a tool that they can use, which perhaps is easier and more flexible than using the internal services of the public service,” Ravignat said. “But obviously the right for Canadians to know is important, and if they were doing this (work) with our public service we would know more about it.”
Data compiled by Public Works and Government Services Canada shows three budget portfolios have consistently spent the most on professional services: National Defence, Public Works, and Public Safety.
National Defence, which includes the department as well as the Communications Security Establishment of Canada and the Military Police Complaints Commission, spent $2.985 billion on professional services in 2012-2013 – a 32 per cent increase since 2006-2007.
Defence has been criticized for its spending on external contractors before. In a 2011 report, retired Lt. Gen. Andrew Leslie accused the department of centralizing staffing in its Ottawa HQ.
DND spokeswoman Justine Lafond said the department is continuing to attempt to trim down its professional services spending in recent years.
“With a shift in focus towards force development, particularly on major procurement initiatives, there is an opportunity to rebalance the resources and assets within the Defence Team,” Lafond wrote in an emailed response to questions.
The Public Works portfolio, which includes Shared Services Canada, came in at $1.678 billion last year. That’s up 38 per cent since the Conservatives came to power. Officials noted they often provide services to other government departments and agencies, and the increases reflect more requests for service.
Public Safety, together with agencies including the RCMP, the Canadian Border Services Agency, and Correctional Services Canada, paid just over $1 billion for professional services in 2012-2013.
Treasury Board, the department meant to have control over the public purse strings, said any specific questions on professional services spending should be directed to individual departments.
In terms of specific service categories, engineering and architecture services were most in demand, costing the government $2.18 billion in 2012-2013. “Business services” comes next, with $1.8 billion, followed by “Other” – a catch-all for non-professional services that can’t be accounted for elsewhere – at $1.36 billion.
Sharon DeSousa, the Ontario regional director for the Public Service Alliance of Canada, said many of those services should remain within government.
“We have been seeing more of it, and it’s extremely troubling,” DeSousa said. “What it’s doing is creating a shadow public service which really has no accountability to Canadians and taxpayers, and the focus of these companies is profit.”
The “shadow public service” term is borrowed from a 2011 report from the Centre for Policy Alternatives, a left-wing think tank. In that report, Ottawa-based economist David Macdonald noted that temporary private contractors function under very different rules than public sector employees.
Macdonald argued that a handful of outsourcing firms have developed close relationships with certain departments, becoming a sort of external human resources department.
“These private companies now receive so much in contracts every year that they have become de-facto wings of government departments,” Macdonald wrote. “These new ‘black-box’ wings are insulated from government hiring rules. They are also immune from government information requests through processes like Access to Information and Privacy.”
The Conservative government has taken a harder line with public sector unions in recent months. The omnibus budget implementation bill, introduced in October, will drastically alter the balance of power between public sector unions and the federal government, limiting unions’ right to strike by giving the government exclusive powers to designate essential services.
Treasury Board President Tony Clement has also been aggressive in his negotiations with unions – a number of which are heading into collective bargaining in 2014 – and his department has commissioned a series of studies into salary and performance comparisons between the public and private sectors. Clement has also pledged to overhaul union sick leave benefits in the coming rounds of negotiations.