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The Issue: Preserving Professional Expertise

The contract between public employees and the federal government is breaking down as more and more services are outsourced for longer and longer periods of time. This is resulting in higher costs to Canadians, less transparency and accountability, fewer checks and balances, a loss of institutional knowledge, and the circumvention of federal employment standards of bilingualism, inclusiveness, and merit-based hiring. While the Liberals have announced their intention to reduce public spending on outside consultants to 2005/06 levels, more aggressive targets need to be achieved to reduce government dependence on outsourced services. The 2016 Budget estimates $170 million in savings for the current year alone. As the Toronto Star has reported1, at that rate it will take another 10 years before spending is reduced to 2005/06 levels, after which the government will still spend several billions every year on outsourcing. Reducing outsourcing must be given a greater government priority.

Key Facts2

  • The federal government currently spends over $10 billion a year on outsourced services, more than the budgets of Statistics Canada, Health Canada, Fisheries and Oceans, Environment Canada, the National Research Council of Canada, the Canadian Food Inspection Agency, the Public Health Agency of Canada, and the Canadian Nuclear Safety Commission combined.3
  • No official (or at least public) estimate exists of the total number of outsourced federal government workers, who constitute what has been styled a “shadow public service.”
  • Nearly half (48%) of PIPSC members who were surveyed in 2015 said they were aware of contractors in their team or work unit, and 59% said contracts in their team or work unit are routinely renewed. 41% reported contractors present for periods between 1 to 5 years. 17% reported contractors present for over 10 years4.
  • Outsourcing affects a large number of IT, medical and other professionals throughout the public service. PIPSC currently represents over 16,000 IT professionals alone.
  • Over 8 in 10 (83%) of all PIPSC members surveyed in 2015 said that no training was offered to existing employees before vacancies were filled by a contracted worker5.
  • In fact, 89% of survey respondents reported that contracted-out positions were never posted internally. This percentage was even higher among IT experts – 91% of whom said such positions were never made available. 6
  • Although generally understood to cover periods of short duration, nearly 1 in 5 outsourcing contracts are for periods longer than 52 weeks.
  • A 2010 study by the Public Service Commission (PSC) provided compelling evidence that government managers are misusing outsourcing provisions and circumventing the hiring practices set out in the Public Service Employment Act (PSEA). The PSEA exists to ensure staffing in government agencies is guided by principles such as merit, integrity, transparency, regional and ethnic diversity, and bilingualism.
  • A subsequent 2012 Auditor General’s report echoed these concerns, concluding, among other things, that government departments conduct very limited assessments of the benefits, costs and risks of contractor use.
  • Hiring delays and a cumbersome government employment process are sometimes blamed for departments’ increased reliance on outsourcing. The average hiring time for permanent federal public service positions is 5.5 months.
  • At many management levels, contract values can be increased by 50% without requiring the department to seek Treasury Board approval.
  • Outsourcing does not save money. The threats of ‘scope creep’ and ‘change fees’ are significant, hidden cost escalators in outsourcing contracts. Many contracts in the areas of management consulting, IT consulting, and temporary help services are revised at least once.
  • The growth of outsourcing costs has far out-stripped the growth in payroll. For example, in one extreme case, the cost of outsourcing contracts for HRSDC skyrocketed by 242%, from $35 million in 2005/06 to almost $120 million 5 years later. Over the same period, HRSDC personnel costs shrank by 4%.
  • Outsourcing projects, such as Shared Services Canada’s current $400-million Bell-CGI consolidation of federal government email, run serious risks of lengthy delays, security lapses, and cost overruns. The Bell-CGI project, for example, is currently more than 18 months behind schedule. A recent audit of SSC outsourcing practices found that the most common missing documentation among the procurement files sampled had been confirmation that contractors met the government’s security requirements7. The most recent Auditor General’s report found SSC does not adequately measure, track or report on its costs, progress or savings related to its consolidation of government email and IT infrastructure transformation8.

Our Position

  • Contrary to current practice, outsourcing government services does not ensure Canadians get the best expertise available, when it’s needed, more efficiently, or at less cost. The best, most efficient and usually least expensive expertise for public services already exists within the public service and should remain there.
  • As public service professionals, we oppose depriving Canadians of critical government expertise and relying on private, for-profit businesses that cost our members and Canadians decent jobs, taxes, transparency and security. Private companies don’t answer to taxpayers and shouldn’t become the repository of vital government expertise and knowledge.
  • Canadians deserve the highest standards of government expertise possible. They deserve public services that are second-to-none, accountable, secure, cost effective, and transparent.
  • Federal public hiring processes ensure the best-qualified are hired and paid fairly and transparently. HR shortcuts – such as outsourcing – short change public employees, public services and Canadians.
  • We work for Canada and Canadians, not private companies. Like the country, we’re in it for the long term, not a short-term contract. Public work deserves public employment. That’s fair to both the public and to employees.
  • Public services aren’t a profit-making venture and shouldn’t be delivered by companies whose first obligation is to their shareholders or to turning a profit at taxpayers’ expense.

1. Liberals commit to cutting bill on consultants, adverts, Toronto Star, March 27, 2016,

2. Except where indicated, all of the foregoing data is drawn from The Shadow Public Service: The swelling ranks of federal government outsourced workers, David Macdonald, CCPA, March 2011.

3. source: Budgetary Expenditures (2015-16 Estimates)

4. Programmed to Fail: How outsourcing is costing the federal government money, jobs, morale, accountability and productivity, PIPSC, June 2016.

5. Ibid.

6. Ibid.

7. “Snail mail? New federal government email system six months behind schedule,“ Kathyrn May, Ottawa Citizen, June 26, 2014

8. 2015 Fall Reports of the Auditor General of Canada, Report 4—Information Technology Shared Services