Canada Audit Finds Call-Centre Rollout Costs Tripled After Uncorrected Tender Error

A Canadian federal procurement audit has traced a costly call-centre modernization effort to a tender error that officials knew about but did not correct before awarding the contract. The Office of the Auditor General's report, tabled on 29 October 2026, says Shared Services Canada failed to obtain the best value for money when it changed the scope and payment arrangements of a system intended to serve federal departments.

The project began in 2013 with an ambition to modernize infrastructure supporting 220 public-facing and internal call centres. IBM Canada received the Hosted Contact Centre Service contract in 2015. By 2020, eight centres had been onboarded at an implementation cost of C$52 million, compared with an original implementation estimate of C$16 million. Shared Services Canada had meanwhile turned to other approaches for centres that had not migrated. The eight-centre figure is a deployment milestone, not evidence that all other centres stopped operating.

According to the audit, the solicitation's costing instructions omitted the full cost of storing data across centres. The department knew of the error but did not correct the tender; after award it amended how storage fees were calculated and removed some intended system features. Auditors also found that invoiced amounts were not verified with the rigour required by contract controls. These are findings about procurement and oversight, not findings of fraud by the supplier.

The contract's financial history requires separating spending from maximum contract value. Approximately C$180 million had been spent by March 2026. With option years and a subsequent 14-month extension, the total contractual value is projected to reach C$251 million through 2028. That projected value is not the same as money already paid, nor is the difference between the initial C$50 million contract value and its amended ceiling a verified loss.

The department has begun replacing the legacy service with cloud-based Contact Centre as a Service arrangements. Auditors found procurement planning started late, adding pressure to extend the old service and compress deployment schedules. The existing system is expected to reach end of life after December 2028. Documentation gaps in replacement procurements did not change the selected vendors, according to the audit, but still weakened accountability.

The government accepted the audit's recommendation to prioritize timely replacement with partner agencies and technical specialists. The question now is whether it can meet the transition dates without another extension or service disruption. Federal call centres handle essential interactions about taxes, benefits and immigration; delays and poorly controlled procurement can affect both public access and the cost of delivering those services.

Sources: Office of the Auditor General of Canada, 'Procuring Technology for Call Centres', tabled 29 October 2026; The Canadian Press report published 29 October; Rebel News report published 30 October.