Deloitte’s Canadian branch has just recently scored a contract of up to $1.1 million from the federal government. These teams will be directed to work with, advise and guide governments on smart and effective deployment of artificial intelligence. Deloitte’s on the hot seat right now for AI-generated blunders. Just last month, they misstepped in a submission to the Australian government, relying on AI-generated citations that had been peer-reviewed. Its current contract with the Canadian federal government is scheduled to end in July of 2026.
Deloitte’s Canadian operations have garnered a lot of headlines with the announcement of their new contract. Their past productions in Newfoundland and Labrador have received wide critical praise. Unexpectedly, the consulting firm churned out a human-resources plan for the province’s Health Department. The plan’s reliance on many of these citations—which were completely made-up—left many worried about the credibility and trustworthiness of their suggestions.
First is the timing of the contract award. The main thing people want to know is why the federal government went with Deloitte, given its recent AI disasters. Experts have voiced their concerns over the implications of relying on a firm that has admitted to significant errors in its work.
Robert Shepherd, a long-time government employee, shared his disappointment over the process.
“If I, as an employee of the government of Canada, put in work like that based on false evidence, I would be up for reprimand at the very least.” – Robert Shepherd
Despite the dust-up, the federal government is standing by its decision to award the contract to Deloitte. The department that hired the consulting firm certainly raised eyebrows with their statement. In their testimony, they explained that fund contracts with third parties dictate specific terms relating to artificial intelligence use. As part of these stipulations, Deloitte must disclose any usage of AI ahead of time.
Pamela Wotherspoon, a spokesperson for Employment and Social Development Canada (ESDC), went to great lengths to condemn unethical practices. She cited the administration’s commitment to cleaning up government’s contracting practices.
“ESDC works in good faith with all contractors to ensure they deliver value for Canadians in an ethical and accountable fashion.” – Pamela Wotherspoon
Skepticism remains about the quality of AI-generated recommendations. Unfortunately, this skepticism only grew after the recent revelations about Deloitte’s use of potentially misleading content. Matt Barter, a veteran of the consulting practice, questioned the efficacy of these recommendations in striking a serious responsive tone.
“What will happen if the consulting companies are now using generative AI to generate their ideas?” – Matt Barter
Barter continued to criticize what could come out of such a partnership, claiming that the government would end up with poor quality recommendations.
“The government is going to receive some bland, mediocre recommendation out of a (large language model) that public sector employees could have done themselves with the LLM.” – Matt Barter
Deloitte’s $1.1 million contract is receiving especially close scrutiny. These scenarios point to larger issues of accountability with regard to taxpayer-funded expenditures and our reliance on private consulting firms for critical policy guidance. With taxpayer dollars on the line, people are starting to rightfully ask if the services Deloitte is providing are really worth the cost and disruption.
The story is still developing. Only time will tell how the federal government meets these challenges and if Deloitte is able to reclaim trust in its capacity to provide reliable and effective consulting services. The winds of public opinion are changing, and alarmism is increasing. Both advocates and practitioners are now watching intently to see how this incubator performs, and how its work will shape the future of artificial intelligence contracts in support of sensible public policy.
