Report from the Parliamentary Budget Office Shows Federal IT Contracting Costs 25% More than In-house Services

January 16, 2025 TruthUSA

The parliamentary budget officer’s new report reveals that the federal government spent more on contracted IT services in four federal departments in 2022-23 compared to what it would have cost if public servants had performed the work.

According to the report, the federal government allocated $18.6 billion for professional and special services in 2022-23, with $2.6 billion specifically dedicated to IT services.

The major spenders on IT services among departments and agencies were the Canada Border Services Agency ($287 million), the Department of National Defence ($346 million), Employment and Social Development Canada ($268 million), Public Services and Procurement Canada ($230 million), and Shared Services Canada ($256 million).

Together, these departments and agencies accounted for over half of the total government expenditure on IT contractors.

The report indicates that in the four departments analyzed, outsourcing IT services to external contractors resulted in costs to taxpayers that were 22-25.7% higher compared to if the services were handled internally.

Notably, the CBSA did not provide sufficient data to be included in the findings.