What happens if the government uses fewer consultants? Reducing reliance on consultants could be good for the public service in the long run, writes Jacob Danto-Clancy.
By Jacob Danto-Clancy Published Jun 02, 2026. Last updated 1 minute ago. 5 minute read.
A reader asks, how will cutting management consultants at the same time as the large loss of experienced workers to early retirement not result in significant problems?
Dear Public Service Confidential, Like governments before it, the current one under Mark Carney has said it is going to start reducing the amount it spends on external management and other consultants. There has been a lot of talk about having a large loss of institutional knowledge from the Early Retirement Incentive already. How will cutting management consultants at the same time not result in significant problems? — a public servant who is worried for the future.
Dear worried public servant, Let us start with the honest part: cutting back on external consultants is not inherently a bad idea. There are well-documented examples in Canada of governments paying too much, relying too heavily on familiar firms, and outsourcing advice that should have been challenged long before it became a line item. Nobody who cares about good government should be blasé about that. But the harder question is the one you are asking: what happens when government cuts external advice at the same time experienced public servants are being incentivized to leave? That is where this stops being about consultants and starts being about capacity.
The Role of Institutional Memory
The public service runs on memory. It matters that someone knows why a decision was made six years ago, what the last reorganization was really about, where the real bottlenecks are, and which files are politically untouchable regardless of what the briefing note says. That kind of knowledge does not live in org charts or briefing notes. It lives in people. And right now, a meaningful number of those people are being asked to consider a consequential and largely irreversible decision. The Early Retirement Incentive (ERI) is voluntary, but it is real: as of May 19, 6,497 applications had already been received, with the window open until July 24th. Those who will leave will predominantly be the more experienced — not older in some abstract sense, but the ones who know what not to repeat. This matters for your question because those who do leave — for legitimate, financially sound, and entirely personal reasons — take things with them that cannot be easily replaced or contracted out.
The Consulting Paradox
Which brings us back to The Consultants. The uncomfortable institutional irony is this: the two moves happening simultaneously could easily cancel out the other’s intended benefits. If senior people exit without structured handover, mentorship, or succession planning, the savings show up in head count alone. The costs show up later in slower files, repeat mistakes, weaker advice to ministers, and more demand for the very consultants the government says it wants to use less. It is like Beckett’s “fail again, fail better” — except here, the better part is not guaranteed.
This is also where Canada’s recent consulting history is worth keeping in mind. The criticism of government consulting is not abstract. ArriveCAN, McKinsey et al., the long tail of the Phoenix debacle — these were not just expensive. They point to something structural: departments reaching outside because internal capacity had already been allowed to thin, sometimes by the budget cycles that were supposed to restore fiscal discipline. Consulting can paper over a capacity gap, but it cannot fix one.
Understanding the Scope of Consulting
It is also worth being clear about the scope of what “consulting” covers. At a dinner party, “I am a consultant” tends to invite the follow-up: “OK, but what do you actually do?” The scrutiny is not entirely unearned. But the line item for external consulting on government books can mean very different things. Yes, sometimes it is the high-priced multinational with a polished, preloaded deck and a Bay Street address. But it also covers narrow technical expertise, independent third-party evaluation, and short-term surge capacity that no organization could justify keeping in-house. And behind a lot of that work sits a whole ecosystem of Canadian firms, local organizations, and non-profits that look nothing like the cautionary tales.
A healthy public service uses external support for surge capacity, specialized expertise, facilitation, or independent review — situations where internal capacity genuinely does not exist or where an outside perspective is the point. There is an old joke that a consultant flies 10,000 miles to tell you the time. Fair enough — but the more interesting question is why the room could not read the clock itself. Sometimes an organization needs someone from outside to say what it already knows but cannot quite say to itself — and in those cases, the consultant is not the problem. Mistaking the arrangement for an indefinite solution is.
An unhealthy public service does exactly that — using consultants as a substitute for institutional memory, decision cover, or permanent staffing workarounds. The diagnostic question is not “How much are we spending?” It is “Why did we need to go outside?” Procurement rules can help answer part of that, but they cannot answer the deeper institutional question. And they certainly cannot answer it when experienced people are walking out the door, at the same time consultants are being turned away.
A Better Path Forward
So, the answer here is not simply “cut consultants.” That may produce a better line item, but not necessarily a stronger state. A better answer may be: cut the wrong consulting, rebuild the right capacity, and be honest about what external advice is for. Your worry is about whether government is cutting reliance or cutting support. Those are very different things. Reducing reliance on consultants — done seriously, with greater investment in internal policy shops, project management, digital and data skills, and genuine management capacity — could be good for the public service in the long run. Reducing support while experienced people are nudged out the door before they are ready, or before anyone has figured out what they know and who will know it next, is something else entirely. It may be done in the name of “efficiency,” when really it is institutional thinning. The future problem is not that government might use fewer consultants. It is that it might use fewer consultants without becoming more capable itself.
Jacob Danto-Clancy is a senior policy analyst at the Institute on Governance, working on public sector governance and institutional performance. He has written and advised governments on AI, digital modernization, and emerging technology issues.
