Six weeks after the federal government tabled Budget 2025, a stark contradiction is emerging between its promises and its projected spending, particularly concerning the use of external consultants.
Promises Versus Projections: A Widening Gap
During the spring election campaign, the Liberal government pledged to reduce its reliance on private consultants. However, the numbers in Budget 2025 tell a different story. Federal spending on professional and special services is projected to reach a record $26.1 billion this fiscal year. This represents a staggering 37 per cent increase from the previous year and effectively doubles the pre-pandemic outsourcing levels.
The budget claims it will "cut back" on these services, but even if it achieves a promised reduction, outsourcing would remain roughly double what it was a decade ago. This acceleration of a long-term trend moves Canada in the opposite direction of the government's stated goal of building a stronger, more efficient public service.
Public Service Shrinks as Contractor Spending Grows
Compounding the issue, Budget 2025 projects the size of the core public service will be reduced by approximately 40,000 positions from its peak. This includes around 30,000 jobs slated for cuts in the coming year, on top of roughly 10,000 lost last year.
Critics argue this represents an erosion, not an efficiency gain. Replacing skilled, permanent public servants with higher-cost contractors leaves departments less resilient and increasingly dependent on private firms to perform core government functions. Studies indicate that private contractors can cost taxpayers up to 26 per cent more than equivalent public service work.
Historical Precedents and Future Risks
The Professional Institute of the Public Service of Canada (PIPSC), which has heard from members that fighting outsourcing is a top priority, warns of the risks. They point to costly failures like the Phoenix pay system and the $60-million ArriveCAN app debacle as examples of projects built by outside firms that resulted in massive cost overruns and systemic failures.
This shift towards external consultants, now draining billions annually, threatens the in-house expertise needed for critical systems Canadians rely on, including food safety inspections, emergency response coordination, digital security, and environmental protection. The budget's approach, framed as modernization, is instead creating a more expensive and fragile governance model dependent on the private sector.
