The federal government unveiled its spring economic update on April 28, shifting its focus to reducing spending on external consultants as part of broader efforts to shrink the public service. The update, tabled in Parliament, targets savings of $450 million in the next fiscal year and $900 million annually from 2028-2029 onward through cuts to management and other consulting services.
Consultant Spending Under Scrutiny
Out of $23.1 billion in total spending on professional and special services in 2024-2025, the government spent $5.1 billion on management and other consulting. The new targets expand on an existing budget commitment to trim consultant spending by 20 percent over three years, concurrent with public service job cuts. The government aims to protect defense priorities, strengthen internal capacity, and accelerate in-house skills development.
Questions Raised by Experts
Hadrian Mertins-Kirkwood, senior researcher at the Canadian Centre for Policy Alternatives, noted that while cutting consultants is sensible on paper, it raises questions about essential services previously provided by external firms. He emphasized the need for clarity on how the government will maintain services while reducing both internal and external capacity, suggesting that productivity gains, possibly through AI, are the only stated solution.
The pledge follows similar promises by successive governments, but details remain scarce. The update provided little information on the comprehensive expenditure review, which aims to find $60 billion in savings over five years from departmental operational budgets. Instead, it highlighted ongoing horizontal reviews of federal procurement, consulting, and programming.
Mostafa Askari, chief economist at the University of Ottawa's Institute of Fiscal Studies and Democracy, expressed surprise at the lack of detail on public service cuts, expecting a complete picture by the next budget.
