Canadian government pays Deloitte $90k per day
It was revealed recently that the federal government has contracted Deloitte to help trim the federal budget. Deloitte’s 8-month contract is worth $19.8 million, drawing ire from the opposition New Democratic Party.
There was grumbling from some opposition MPs in Ottawa after it was revealed that Big Four accounting and consulting firm Deloitte is earning over $90k a day from the Canadian government in return for delivering advisory services. As part of an 8-month contract with a total value of $19.8-million, Deloitte is advising the federal government on several cost-cutting measures. The news comes on the heels of a government announcement that it has paid PricewaterhouseCoopers a $2.5-million fee for a strategic plan to reduce 308 data centers to nearly 20.
Deloitte was hired in August 2011 to help the federal government cut costs and find enough savings to balance its books by 2014. Canada is facing a massive cost-cutting challenge, with the government setting out to trim $4 billion from $80 billion in annual program spending. Deloitte was selected out of a shortlist of more than 20 "pre-qualified" firms, including Ernst & Young, IBM and Accenture. The victorious Deloitte will advise senior and elected officials on public- and private-sector best practices in improving productivity and achieving operational efficiencies. The contract runs to March 2012, with an option for a one-year extension.
Criticism from the opposition
Voices from the opposition NDP party were critical of the Deloitte contract. "Hiring Deloitte and paying them firm $90,000 a day is wasteful and unnecessary," remarked NDP MP Peggy Nash. "The government likes to pretend that they're prudent in terms of economic spending but at the same time they have this massive contract with an external consulting firm that will only advise them to chop thousands of public sector jobs," she added.
According to NDP MP Jean Crowder, the Canadian people "will not buy the justification for spending $90,000 a day for an outside consultant to plan cuts.” She continued, “A day's pay for [Deloitte Consulting] is more than a year's pay for front-line Service Canada workers. While Conservatives throw money away on high-priced consultants, they are forcing Canadians to accept cuts to the programs and services that they rely on.”
Government defends deal
In reaction to the criticism, the government stood firm in its decision to hire Deloitte. Industry Minister Christian Paradis called the Deloitte contract "normal," saying that "there will be major decisions to be taken and we need an expert from the private sector to do it properly."
"With respect to spending, we certainly are opposed to reckless spending,” added Finance Minister Jim Flaherty. “Private sector advice is valuable, it’s important, it’s essential."
