Federal government defends hiring KPMG for cost savings advice

09 November 2023 Consulting.ca 2 min. read
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The federal government is defending a contract it awarded to accounting and consulting firm KPMG to help the Natural Resources department find cost savings in property and IT.

The $670,000 consulting contract was awarded in July 2022 – prior to the federal government’s pledge in the 2023 budget to cut down on external consultant spend.

The federal government has faced criticism in the last several years for excessive spending on consulting firms, including McKinsey and Accenture. Since PM Trudeau came to power in 2015, the Liberal government has spent more than $100 million on consulting contracts with McKinsey – compared to $2-million under Stephen Harper.

Accenture, meanwhile, was awarded an undisclosed $146-million contract to administer the Canada Emergency Business Account (CEBA) pandemic loan program.

When the 2023 budget was tabled in March, the federal government promised to reduce spending on consultants – which was driven by a huge spike in pandemic-related advisory services.Federal government defends hiring KPMG for cost savings adviceAnita Anand, the recently appointed president of the Treasury Board, has issued new guidance for departments seeking outsourced services. The guidelines include undertaking a review of whether the task can be performed internally and whether outsourcing is absolutely necessary within the context being proposed.

The KPMG contract’s details were uncovered when NDP MP Gord Johns, a vocal critic of the federal government’s spending on consultants, asked for details of any contracts awarded to outside firms for cost savings analysis.

Natural Resources delivered two tasks awarded to KPMG. The first, valued at $325,000 and due August 25, 2023, produced three reports on cost reduction opportunities in areas including IT contracting, cloud computing, and software asset management. The second, valued at $344,650 and due Oct 31, 2023, was listed as “TBD” (to be determined).

No other department said it hired outside companies to help find cost savings.

Miriam Galipeau, a spokesperson from Natural Resources, told CBC News the KPMG consulting work and the department’s internal analysis have resulted in proposals that could realize a potential $5 million in savings starting in 2026.