Thanks so much, Mr. Chair. I'm really grateful to be here.
I'm a federal public servant who works on technology and public policy. I was invited to be here today in the context of research work that I did with Professor Amanda Clarke over the past year as part of the public servant in residence program. I'll be focusing my comments and answers today on observations related to that research.
This work was part of a research program that Professor Clarke leads on trustworthy digital government. IT procurement and the relationship between IT vendors and public service organizations are a big part of that story in terms of both public trust and public sector capacity.
Professor Clarke and I analyzed publicly available contracting data from federal departments, specifically the proactive disclosure of contract status set that lists contract award data. What we were looking for was trends in government IT contracting at scale. It's a classic kind of open-data problem. It's taking data that's publicly available but hard to understand or interpret and doing the work to transform it into something that's more insightful and easier to read and understand. You can see the results at govcanadacontracts.ca. I'll skip over our approach in the interest of time, but you can read about the methodology there.
There are a few questions that we can answer pretty confidently. In other cases, it's a bit more tentative given the data quality. One of the main takeaways is that this past fiscal year the government spent about $4.7 billion on IT procurement across all departments and agencies except for the Department of National Defence, which we categorize separately.
Of that, about $1.9 billion was spent on IT consultants and contractors, $1.2 billion on software licensing, $840 million on devices and equipment, and about $750 million on telecoms and other miscellaneous IT costs. These are all costs per year. Corrected for inflation, it's about a 27% increase in IT spending overall between 2017-18 and 2021-22.
Information technology is now the second-highest category of contract spending after facilities and construction. On the website, you can see who the largest IT providers are. Over the five years that we looked at, three companies received an average of over $100 million per year, which cumulatively is about 22% of total government-wide IT contract spending. Another 10 companies received an average of more than $50 million a year or about 17% of total IT spending. We don't have any publicly available data on how concentrated these companies are, for example, in the national capital region or, for example, how many of them are fully based in Canada.
The other question we were curious about was the number of IT contractor and consultant staff currently working at federal departments, typically with departmental laptops, emails and building passes. Our research team filed some access to information requests and none of the departments that responded had data available on the number of IT contractor staff working there, so we used some other publicly available IT expenditure data and we estimated that there are about 7,700 IT contractor staff across departments. In comparison, the government has about 18,000 in-house IT staff. In both cases, again, this excludes DND. Overall, for the core public service, that's a ratio of about one IT contractor for every 2.3 full-time IT employees.
From ATIP responses that came in this past month, we learned that the average per diem or daily pay rate for IT professional services contractors in federal departments is about $1,400 per day. These per diems go from as low as $230 per day to as a high as $2,800 per day. In comparison, a government IT-2 average employee salary is about $400 a day, including salary and benefits, and the average IT-5 salary is about $650 per day. An IT-5 is the highest-level tech employee in the public service. There are only about 500 or 600 of them across government.
What's challenging is that with the data that's publicly available, it's hard to evaluate whether the amount that the government is spending on IT is good or bad, and whether the ratio of outsourced IT contractors to in-house IT staff is appropriate. The source data isn't consistently linked to specific IT projects. There isn't public data on how those projects panned out. Essentially, without knowing whether IT projects turned out successfully or not, it's hard to say whether the money that was spent on them was worthwhile. There is some publicly available data on government IT projects that are larger than $1 million, thanks to a parliamentary written question. If you search for large Government of Canada IT projects, you can find recent data from earlier this year.
Professor Clarke can speak about this in more detail, but there's a strong relationship where the larger an IT project is, the higher its risk of failure. Our research puts into perspective that ArriveCAN, although it was a lot more publicly prominent than other government IT projects, is fairly small in scale compared to the government's overall IT spending totals.
I think the note I would end on is that it's great to see this level of interest in government technology work. More transparency on how we work as a public service, how we procure or build digital services and how we learn and improve them is really important.
Thanks so much for your time.
Thank you for your attention.
I'm happy to answer your questions.
