Public Accounts Committee on Dec. 11th, 2025

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

In our report on BDM, it appears that, at the beginning of the project, professional services were estimated at $700 million out of a total project cost of $2.2 billion. On March 13, 2025, an article published by Radio-Canada showed that the cost was up to $4.4 billion, or double the initial project estimate.

How do you explain such a significant cost increase? What changes did you make to the core technology to double the cost of the project? We are talking about billions of dollars here.

[Paul Thompson]

Yes, there was an increase in costs, which is common for large technology projects.

Once we started the work, we discovered more things. The decision-making process required an initial cost estimate, but it was not a precise estimate. It was obvious that the old system was much more complex than expected. As we moved forward, the estimates became more precise. Now, the estimate is between $4 billion and $5 billion for the three programs, namely employment insurance, old age security and the Canada pension plan, as well as for the contact centres.

The overall program is made up of four areas of work.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

That is similar to the answer given in a Radio-Canada report. The assistant deputy minister, Susan Ingram, indicated that the costs increased because of how complicated it is to dismantle old computer systems and migrate millions of files.

Why is it that, in 2025, no one realized how complicated it would be to change an old system? Where is your internal expertise?

[Paul Thompson]

As I indicated in my opening remarks, we draw on expertise from both the department and consultants who have carried out these kinds of projects around the world. We use their considerable expertise to increase our capacity. Now, half the expertise is internal and the other half is from consultants working on the project.

We are also focusing on transferring knowledge from these consultants to our team members so that it will continue to benefit the project after the consultants have finished their work.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

What is the estimated cost of the project right now?

[Paul Thompson]

The estimates are much more reliable. As I said, experience has made it possible for us to be more accurate.

We have a very good estimate of the costs associated with EI. That project is already under way. The first round of benefits was paid out a month ago. We are therefore very confident about the delivery of these benefits.

There is still some uncertainty in terms of the CPP because we still do not have a detailed project implementation plan, so there is still work to be done in this area.

We are very confident regarding the OAS and EI estimates.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

In a note prepared for question period, Minister Patty Hajdu talked about $6.6 billion at the time. That is three times higher than the estimate.

Earlier, in answer to my question, you said that the cost was around $4.5 billion. The note says:

Budget 2024 proposes to provide a total of $2.9 billion over five years, starting in 2024-25, on a cash basis, to Employment and Social Development Canada to migrate Old Age Security and Employment Insurance onto a secure, user-friendly platform.

The cost is estimated at $6.6 billion for the 10 years of the BDM program. Where are we at right now? If political commentators on Quebec's Mordus de politique got wind of this, they would note that this is six times the amount invested in SAAQclic. This would cause a huge scandal in Quebec. We would likely launch a public inquiry. However, this seems to be going unnoticed in Ottawa.

This is rather outrageous because we are talking about a huge amount of money.

[Paul Thompson]

Yes.

[The Vice-Chair, Liberal, Jean Yip]

Give a short answer, please.

[Paul Thompson]

This is a very complex project that will deliver over $1.5 trillion in benefits over the next 10 years. It's the largest IT project undertaken by the government.

I would note that with old age security already on the platform, it has delivered over 60 million payments to Canadians, worth over $50 billion. It is already delivering programs at scale, and we have confidence that it will do the same for employment insurance, for the Canada pension plan and to support our contact centres going forward.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

[The Vice-Chair, Liberal, Jean Yip]

Thank you.

We will now begin our second round of questions.

Mr. Deltell, you have five minutes.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

Thank you very much, Madam Chair.

Good morning, colleagues.

Ladies and gentlemen, welcome to the Parliament of Canada.

I would like to say a special hello to Yolande James, who used to be an MNA and minister in the Quebec government when I served in the National Assembly and when I was a journalist. Seeing her brings back fond memories. Earlier, Mr. Lemire talked about the show Mordus de politique. Ms. James was a part of that show, which was called Le club des ex at the time. I thank her for now serving the Government of Canada.

I will get right into my questions because I have quite a few of them. My first question is for the CBSA representatives, meaning you, Ms. O'Gorman.

The Auditor General's report mentions that the evaluation documents were incomplete or missing for some CBSA files. Earlier, in your testimony, you said that you had cancelled a contract that had been awarded.

Is that the contract in question here, or was documentation missing for another contract?

[Erin O'Gorman]

We had four contracts with McKinsey.

We cancelled the fourth contract before any work was done or any money was spent. We decided to have CBSA employees deliver the service.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

So the fourth contract is the one mentioned in the report?

Is that correct?

[Erin O'Gorman]

I think the report refers to several contracts.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

Section 5.34 clearly indicates that the CBSA's documentation about bid evaluations was incomplete. You said that one of the four contracts was not awarded.

Is that section of the report referring to the cancelled contract or to a different one?

I'm asking you that question because if that is not the case, how is it that—

[Erin O'Gorman]

It is not the same contract.

The report is referring to our second contract for which the documentation was incomplete.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

How were you able to award a contract when the documentation was incomplete?

[Erin O'Gorman]

We had a problem with procurement-related documentation. We worked with Public Services and Procurement Canada on this contract and we received bids. However, when the Auditor General reviewed all of our documentation, the files were not complete.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

Thank you, Ms. O'Gorman. Thank you for speaking in French. Your French is very good.

I would now like to talk to you, Mr. Thompson. Good morning.

I want to talk about section 5.45 of the Auditor General's report, which has to do with non-competitive contracts. A competitive process was not held for some contracts at Employment and Social Development Canada, but in the end the department did not award those contracts. A little later on, the report indicates that ESDC awarded a non-competitive contract, which led to another exception being invoked for subsequent contracts of considerably higher value.

What contract are we talking about here?

[Paul Thompson]

Thank you for your question.

As I mentioned, we had four contracts with McKinsey. The first was a non-competitive contract in the amount of $40,000 for consultant services to come up with a strategy at the end of the pandemic and at the beginning of certain transformation projects. That was the first non-competitive contract.

The three others were awarded using Public Services and Procurement Canada's national master standing offer.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

Thank you, deputy minister.

I would like to use the few minutes I have left to come back to what my colleague, Mrs. Kusie, said about the potential appointment of Mark Wiseman.

First, I want to point out that Mrs. Kusie is a professional diplomat and Mr. Wiseman is being considered for the most prestigious position in the public service, Canada's ambassador to Washington. Unfortunately, Mr. Wiseman has gained recognition lately. Although he is a world-renowned businessman, he is perhaps not exactly the diplomatic leader we need. He said the following about the Century Initiative:

“even if it makes Quebec howl”.

That is insulting to Quebeckers. He is a fierce opponent of supply management, which is a key issue in discussions with the United States.

He is therefore not the right choice.

[The Vice-Chair, Liberal, Jean Yip]

Thank you.

Ms. Tesser Derksen, you have five minutes.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

Thanks, Madam Chair.

Before I start, I'd like to acknowledge that it's our last meeting before the holidays. I would like to thank all of my colleagues on the committee for being so great in helping me get onboarded and in helping learn more about how this committee operates.

To all the witnesses who are here today, thanks very much.

I wish everyone a merry Christmas and happy holidays.

I'm going to start with you, Mr. Thompson.

You mentioned in your opening remarks that your department is tasked with reducing expenses by 20% over the coming three years, I believe. I believe you're referring to our government's comprehensive expenditure review, which was included in our 2025 budget, with a focus on improving fiscal health and improving the value for money that Canadians are getting.

Could you talk a bit about how the task you're now facing is going to affect your department and how you plan to be successful in that endeavour?