Deloitte earns 90k a day from Canadian government

20 February 2012 2 min. read

A lot of noise arose in Canada after finding out the advisory firm Deloitte earns over $90k a day from the Canadian government in return for delivering advisory services. Part of an 8 month contract with a total value of $19.8-million, Deloitte advises the government on several cost-cutting measures. The news is particularly hot as the government just announced that it paid PriceWaterhouseCoopers $2.5-million fee for advice on how to reduce 308 data centers to nearly 20.

Deloitte was hired on August 15 2011 to advise the government on finding enough savings to balance the books by 2014. Canada is facing a massive cost-cutting challenge: the government has to trim $4 billion from $80 billion in annual program spending. Deloitte was selected out of a shortlist of more than 20 "pre-qualified" firms, including Ernst & Young, IBM and Accenture. The contract runs to March 31 2012, and will provide senior and elected officials on public- and private-sector with best practices in improving productivity and achieving operational efficiencies.


Criticism by the police

Opponents of the cabinet are negative: "hiring Deloitte and paying them firm $90,000 a day is wasteful and unnecessary" according to Peggy Nash, a critic from the opposition. "The government likes to pretend that they're prudent in terms of economic spending but at the same time they have this massive contract with an external consulting firm that will only advise them to chop thousands of public sector jobs". According to Democrat Jean Crowder the Canadian people "will not buy the justification for spending $90,000 a day for an outside consultant to plan cuts. A day's pay for Deloitte Consulting is more than a year's pay for front-line Service Canada workers. While Conservatives throw money away on high-priced consultants, they are forcing Canadians to accept cuts to the programs and services that they rely on," Crowder continued.

Government defends high expenses to Deloitte

In a reactance to the criticism, the government stands firm by its decision to hire Deloitte. Industry Minister Christian Paradis called the Deloitte contract "normal," saying "there will be major decisions to be taken and we need an expert from the private sector to do it properly."