At long last, an honest dialogue on digital procurement
UNSPLASH PHOTO
Canadians have asked our leaders to do some hard thinking and rethinking since Donald Trump was re-elected U.S. President: Rethinking long-held, complacent assumptions about the presumed benefits of our close integration with our increasingly unstable, unreliable neighbour to the south; and thinking about where we can find new partners regionally and globally to offset, counter and transcend the fractiousness among the great powers as they play for high regional and global stakes.
And as if that weren't enough of a to-do list, thinking about how to prepare to thrive in an AI revolution that is unfolding at speed and in real time.
Canadians typically are a modest lot. If national self-doubt could be captured symbolically, it would likely be on our coat of arms. But while there is much to be worried about, and a long road to travel before lofty policy intentions are translated into concrete results, there is also much to be hopeful about.
The government of Prime Minister Mark Carney hit the ground running after the spring 2025 election, charting a bold, ambitious path through the new global disorder for Canada that has caught the public's fancy.
Building Canada Strong means digital strong
The idea of “Building Canada Strong” as the Prime Minister put it, has become more than a political slogan. It has become a kind of all-purpose marching order delivered by Canadians last spring to all governments, political parties, and, indeed, the private sector, to put aside jurisdictional squabbles partisan bickering, and bare-knuckles competition for market share in the interest of securing the common good and our common future.
As the Prime Minister said, meeting this moment means that “We will need to think big and act bigger. We will need to do things previously thought impossible at speeds we haven’t seen in generations.”
Nowhere is that imperative more vital than in the area of federal digital procurement. Delivering much of the Prime Minister’s nation rebuilding agenda will require the rapid development of an agile digital backbone that delivers modern services, supports Canada’s economic resilience, strengthens supply chains, and meets digital sovereignty and national security requirements. All of this will have to be done at speed and in parallel with the AI revolution.
Current IT procurement frameworks stifle innovation, competition and accountability
Public-sector IT environments are inherently complex, often integrating decades-old legacy systems with modern platforms while complying with stringent privacy, security, bilingualism, and accessibility requirements. Procurements must balance fairness, transparency, trade obligations, and regional economic considerations. Such projects typically unfold at a massive scale and under intense public scrutiny.
Politicians tend to sell IT solutions publicly as much (or more) for their potential to save money as for the quality of the user experience at the end state. Procurements must balance fairness, transparency, trade obligations, and regional economic considerations.
Public Services and Procurement Canada oversees many major contracts, but departments define their own requirements and manage implementation. This shared responsibility model can blur accountability.
When projects fail, it is often unclear who is to blame: program departments, central procurement authorities, external vendors, or political leadership. Diffused accountability can weaken incentives to halt troubled initiatives early.
Modern best practices in software development emphasize iterative delivery, modular architecture, and continuous user feedback. But current federal procurement rules designed to ensure fairness and competition can inadvertently discourage innovation and agility, featuring lengthy request-for-proposal processes, rigid technical specifications, and risk-averse evaluation.
This fosters an unspoken but nonetheless real tendency to favour large incumbent vendors with experience navigating government processes. Smaller or more innovative firms have to struggle to compete. When large vendors dominate the market, departments can have limited leverage to control escalating costs through change orders and contract amendments.
This, in turn, can have a negative cascading effect, with vendors possessing more technical knowledge than the client overseeing them. Without strong internal oversight, government departments may struggle to challenge cost estimates, assess feasibility, or independently validate progress.
These internal flaws only come to public attention when a Phoenix pay system or an ArriveCAN app goes very publicly wrong.
Once in a generation opportunity for real procurement change
The Carney government has shown that it understands the scale of the procurement challenge Canada faces. From massive investments in national defence and AI and naming to building international digital partnerships, to investments in a sovereign digital infrastructure and the modernization of federal service delivery, it is putting its money where its policy mouth is.
Departments are engaging the industry more directly to better understand emerging technology trends and procurement challenges. Experts in the information technology sector have been consulted on how to modernize procurement approaches.
A government-wide review of existing and planned procurements called for stronger benchmarking of procurement spending, greater support for Canadian suppliers, reduced reliance on external contractors, and improved coordination of procurement activities across departments.
Despite this progress, structural complexity remains a defining feature of the system.
The Smart Procurement Group: Fostering frank procurement dialogue
In much the same way that Canadians have broadly signalled their impatience with political institutional finger-pointing and blame games at a time of global disruption, public and private sector players in the federal digital procurement space need to engage in honest, solutions-focused dialogue if the current deficiencies are going to be rectified.
The Smart Procurement Group (SPG) has created a forum for just such dialogue. Bringing together leaders — small, medium and large — the SPG reflects the full supply chain involved in delivering digital solutions to the government for Canadians.
Next week, the SPG will gather in Ottawa to review a draft report that seeks to build on the accelerating momentum by recommending practical, non-partisan solutions that will help federal IT procurement rise to meet this digital moment.
The SPG report will focus on four key priority areas that will
Ensure consistent application of core procurement policies
Modernize financial evaluation practices
Accelerate outcomes-based procurement
Implement proportionate, risk-based controls
The work of the SPG sounds very technical and dry. But there is no underestimating its importance. Smart, agile, competitive and transparent procurement systems are essential pillars on which the Government of Canada will be empowered to help build the services Canadians expect, the security we need at this uncertain time, and, above all else, a resilient, innovative economy that will power jobs and growth for the future.
Right now, there is a once-in-a-generation opportunity to fix digital procurement – not forever, of course, as nothing in IT is ever set in stone, but for decades to come. The Smart Procurement Group is doing its part to help seize this moment.
