Federal Consultant Spending Remains Near $19.2 Billion Despite Pledges to Cut Reliance
Audited financial statements show the Carney government spent nearly $19.2 billion on external professional and special services in 2025-26, only slightly below the prior year's $19.5 billion. The spending comes as the federal public service has shed more than 23,000 employees over two years and total contracted services spending is projected to reach a record $26.6 billion by 2026-27.
The Carney government spent almost $19.2 billion on external professional and special services during the 2025-26 fiscal year, according to audited financial statements. The figure represents only a slight decrease from the $19.5 billion spent in the prior year, even as Prime Minister Mark Carney promised in his election platform to significantly reduce the government's reliance on consultants.
Organizations contracted by the government in 2025-26 included Bell Canada, KPMG, Microsoft Canada Inc., and the City of Toronto. Total spending on contracted services last year — encompassing both external contracting and contracts with other government departments — reached $22.8 billion. Government estimates project that total contracted services spending will rise to $26.6 billion in 2026-27, a level the Professional Institute of the Public Service of Canada (PIPSC) describes as the highest on record.
The federal budget released last week stated that steps had been taken to reduce spending on external management and consulting services by 20 per cent. The government aims to achieve annual savings of $900 million from reduced consultant spending by 2028-29. The Liberals' 2025 budget also outlined a plan to slash the public service by 10 per cent by the end of the 2028-29 fiscal year.
Meanwhile, the federal public service has shed more than 23,000 staffers over the last two years, according to Canada's parliamentary spending watchdog. An online tool maintained by the Office of the Parliamentary Budget Officer estimated there were 344,970 federal employees in the second quarter of this year, meaning federal employee numbers are down 6.5 per cent compared to two years ago.
Sean O'Reilly, president of PIPSC, criticized the government for cutting public servants while not significantly reducing consultant fees. Critics argue that cutting public service experts while paying premiums for external consultants constitutes waste rather than efficiency, and that the government has failed to meet its promise of significantly reducing reliance on consultants despite recent budget announcements.
Labour relations remain active on the issue. In 2023, the Public Service Alliance of Canada negotiated contract language intended to protect public service jobs and reduce outside contracting. The government and the Public Service Alliance of Canada are currently in contract negotiations where job security and ending wasteful contracting services are key issues.