This open letter from President O'Reilly was originally published in the National Newswatch last month.
As Canada navigates a 30 day delay on a potential trade war with retaliatory tariffs, we find ourselves in a position of stunning contradiction. After threatening to impose tariffs on $155 billion worth of American goods, we continue to send billions of Canadian tax dollars south through federal outsourcing contracts to the very nation challenging our economic sovereignty.
The scale of this contradiction is staggering. In the midst of developing emergency support programs for Canadian industries affected by these tariffs, we're simultaneously paying premium rates to American consulting giants for work that could be done by Canadian public servants. Major U.S. firms like IBM consistently rank among the top five recipients of government IT contracts. At the same time, McKinsey & Company has been awarded hundreds of million of contracts over the last two decades – 70% of which were never put to tender. Data from the Parliamentary Budget Officer shows these outsourced contracts typically cost Canadian taxpayers 25% more than if the same work were performed by public service professionals – a premium that becomes even more questionable as we brace for economic turbulence.
The timing of this trade dispute brings into sharp focus the critical role of public service expertise. As the Department of Finance opens its remissions process for businesses affected by the trade war, it will be public servants who design and implement these crucial support programs. Yet paradoxically, we continue to hollow out our internal capacity by outsourcing core government functions to foreign companies.
The pandemic response demonstrated the irreplaceable value of our public service. When crises struck, it was public service professionals who developed testing protocols, managed vaccine procurement, and created and delivered the CERB program that supported millions of Canadians. Now, as we face potential economic disruption from tariffs that could shrink GDP by up to 5.6% and increase unemployment by 3%, we need these same professionals to analyze impacts, design mitigation strategies, and protect Canadian interests.
Consider the current situation: while provincial governments moved to remove American products from liquor stores and modify procurement practices with U.S. companies, federal procurement continues to favor American consulting giants. This creates a dangerous dependency at precisely the moment when we need to maximize our economic sovereignty and response capability.
Most troubling is how this outsourcing steadily drains Canadian knowledge and expertise southward to American firms. When we outsource government functions, we don't just lose money – we lose vital expertise and institutional memory. Critical information about government operations, security protocols, and strategic planning flows south alongside Canadian tax dollars. This creates vulnerabilities that extend far beyond immediate financial costs, potentially hampering our ability to respond to future crises independently.
The Fall Economic Statement announced $1.3 billion for enhanced border security, recognizing the need for stronger Canadian capabilities. That border package was further bolstered this month to meet Trump's latest demands – delaying the tariffs. Yet we continue to undermine these investments by outsourcing critical IT and operational functions to foreign firms. This isn't just about software development or system maintenance – it's about maintaining control over the digital infrastructure that powers our government's ability to respond to crises.
Canada needs a fundamental shift in how we approach government procurement and capacity building. We must repatriate essential government functions to our public service, particularly in areas critical to national security and economic sovereignty. This isn't about protectionism – it's about peace, order, and good government. A strong, professional public service isn't just an administrative necessity; it's a strategic asset in maintaining Canadian independence and resilience.
The current trade tensions offer an opportunity to reassess our procurement strategies and investment in public service capacity. As we prepare to weather economic headwinds, we must ensure we're not undermining ourselves from within. It's time to invest in our public service, build Canadian capability, and ensure our nation's foundation remains strong, regardless of what economic storms may come.
It defies logic to fight a trade war with one hand while writing cheques to American consultants with the other. Canada needs a public service that answers to Canadians, not US shareholders. In this moment of economic uncertainty, the latter isn't just preferable – it's essential for our national resilience.
Sean O'Reilly
President
The Professional Institute of the Public Service of Canada (PIPSC)