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Business News/ News / World/  KPMG received around $670,000 contract from Canadian govt on cutting consultant costs: Report
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KPMG received around $670,000 contract from Canadian govt on cutting consultant costs: Report

KPMG was hired by Canada's Department of Natural Resources for consulting advice at a cost of $669,650. The government's outsourcing spending has grown sharply since 2015.

Canadian government's spending on outsourcing has grown sharply from when the Liberals promised in 2015 to cut back on the use of external consultants (REUTERS)Premium
Canadian government's spending on outsourcing has grown sharply from when the Liberals promised in 2015 to cut back on the use of external consultants (REUTERS)

Canada reportedly hired global professional services company KPMG at a cost of hundreds of thousands of dollars to provide managing consulting advice.

According to the Canadian Parliament, the Department of Natural Resources, led by Minister Jonathan Wilkinson, approved $669,650 for KPMG, The Globe and Mail said in its report.

The thousand-dollar contract involved discussion on how Canadians’ tax dollars can be used efficiently and invested in the priorities "that matter most to them".

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The Globe and Mail has reported that Canadian government's spending on outsourcing has grown sharply from when the Liberals promised in 2015 to cut back on the use of external consultants.

Treasury Board President Anita Anand is currently leading efforts to save about $ 15 billion over five years from existing spending plans of the Canadian government. All government departments in Canada were given a target of 2 October to submit their proposed cuts to Anand’s department for review.

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The latest documents were tabled in response to a written question from NDP MP Gord Johns, who had asked all departments to provide details on any contracts with third-party management firms to assist in identifying spending cuts.

All other departments responded by saying they had not hired consultants as part of this exercise, the Globe and Mail report added.

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KPMG's analysis illustrated how "ridiculous and out of control and absurd it’s getting" when it comes to federal outsourcing.

KPMG consultants had submitted certain documents to the Ministry of Natural Resources in Canada. According to the titles, the consultants provided a final report on “IT cost optimization." That report included supporting documents on IT contractors, domain utilization, printer consolidation, software asset management, and suggestions for reducing costs in each area.

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The Natural Resources department approved two “task authorization" payments against its existing KPMG contract. One was for $325,000 with an August 25, 2023 deadline and the second was for $344,650 and an October 31, 2023 deadline, for a total of $669,650.

Notably, the Canadian government's spending on outsourcing has continued its upward trend for the fiscal year 2022-2023. Ottawa spent $ 15.7 billion on professional and special services that year, a broad category that includes outsourcing spending in areas such as IT services and management consultants.

That is a nearly 88% increase over outsourcing levels in 2015-16 when Ottawa spent $ 8.35 billion.

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Last year, The Globe and Mail report underscored the total spending of the Canadian government on the ArriveCan app is on pace to reach more than $ 54 million this year. Among the list of companies on the ArriveCan app, GCstrategies received the most contracts. However, GCStrategies had fewer than five employees and relied heavily on dozens of subcontractors.

The Globe found several issues related to transparency on the app. "Many of the contracts that are related to the app are not clearly stated as such when they are posted on the government’s contracting site.," The Globe and Mail has mentioned in a report in 2022.

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Published: 09 Nov 2023, 07:56 AM IST
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