Finance Minister François-Philippe Champagne, along with Public Works and Procurement Minister Joël Lightbound, is calling on senior bureaucrats to push for savings on contracts.PATRICK DOYLE/The Canadian Press
Federal ministers are asking the public service to push for savings from the roughly $66.9-billion Ottawa spends each year on goods and services contracts.
Finance Minister François-Philippe Champagne and Joël Lightbound, the Minister of Government Transformation, Public Works and Procurement, sent a letter Thursday to senior public servants responsible for federal spending and contracting, to ensure that contract spending is part of an overall federal effort to spend less on day-to-day operations.
The letter points out that the government of Canada is one of the biggest buyers in the country and there is an opportunity to save money by bulk buying with provinces and territories, prioritizing “digital by default” and renegotiating contracts in areas like IT, real property and travel.
The ministers state in the letter that they expect officials to actively secure value-for-money for the contracts entered into by all departments as a way to spend less on government operations.
The Globe has previously reported on the steady rise in spending on outsourcing since the Liberals formed government in 2015 under former prime minister Justin Trudeau. Spending on professional and special services, a category that does not include hard goods but covers categories such as lawyers, consultants and training - climbed to a record high of $17.8-billion as of March 31, 2024, up from about $8.4-billion when the Liberals came to power.
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The ministers ask the heads of Public Services and Procurement Canada, the Treasury Board, Shared Services Canada and the Chief Information Officer of Canada to submit a detailed proposal within 45 days on how to find savings through federal contracting.
The letter said the effort is “in the spirit of the Comprehensive Expenditure Review,” which Mr. Champagne launched in the summer ahead of the 2025 federal budget, which is expected to be released in October.
Mr. Champagne sent a letter to his cabinet colleagues in July asking them to reduce program spending by 7.5 per cent in the fiscal year that begins April 1, 2026, followed by 10 per cent in savings the next year and 15 per cent in the 2028-29 fiscal year.
The government has not provided a public update on what savings have been found through that exercise.
The Liberal campaign platform projected a deficit of $62.3-billion this fiscal year, but outside estimates now predict that figure will be significantly higher in light of economic trends and federal spending announcements over the summer, including billions more for defence.
Prime Minister Mark Carney has said the 2025 federal budget will include “austerity” measures to pay for new investments in priority areas.
“It’s going to be a challenging budget,” he said during a news conference Thursday. “These are tough times. We have to take some tough decisions.”