CANADA FEDERAL GOVERNMENT
How Canadian Federal Agencies Can Cut IT Waste and Protect Taxpayer Dollars
Transitioning from project-based procurement to a Workday platform model eliminates technical debt and ensures cost predictability.
Transitioning from project-based procurement to a Workday platform model eliminates technical debt and ensures cost predictability.
- The Problem: Fragmented, legacy on-premise systems have created a $32 billion productivity gap between the public and private sectors.
- The Support Shadow: Legacy ERPs currently require a hands-to-keyboard workforce of up to 1,500 employees simply to maintain outdated code.
- The Outcome: By consolidating disparate agency portfolios into a single data model, Canada can meet its 15% operational savings mandate while increasing vendor accountability.
As Prime Minister Mark Carney’s 2025-2026 fiscal directive to find 15% in departmental operational cuts takes hold, the spotlight has turned to the federal government's massive IT spend. For decades, the procurement model in Ottawa has been "set it and forget it," leading to a landscape where software remains locked in for years or even decades.
According to Lev Sugarman, Senior Public Policy Manager at Workday, this 20-year contract model is the primary barrier to government innovation. "Recent scandals have forced a rethink in Ottawa," Sugarman observes, g referencing the findings of the 2024 ArriveCAN audit. "Shared Services Canada is now looking at how to tie procurement more closely to vendor accountability and outcomes.”
Adds Sugarman, “Workday thrives in an environment that rewards performance rather than just legacy vendor relationships."
The Support Shadow and Technical Debt
The financial drain on the taxpayer isn't just the price of the software; it’s the human cost of running it. Sanam Basirian, Regional Sales Director for the Public Sector at Workday Canada, points to a massive support shadow cast by legacy systems like SAP.
"Right now, there are roughly 1,200 to 1,500 federal employees whose entire job is just manual support for legacy systems," says Basirian. "Currently, departments are so fragmented they can’t even share reports with one another. With a modern platform, you could support that same scale with 30% to 50% fewer IT resources."
Reclaiming the capacity of the 1,500 employees is the ultimate talent-liberation strategy. These are public servants with deep institutional knowledge who are currently being used as human bridges between broken systems. By automating the routine drudgery of reconciliation, leadership can redeploy this expertise toward the most complex missions of the Digital Sovereignty Framework.
As Comba notes, it’s about making superheroes out of the existing workforce and giving them the tools to handle exceptions and high-value strategy rather than manual data entry.
This assessment is backed by a 2025 Macdonald-Laurier Institute study, which found that public sector productivity has declined by 0.3% annually over the last decade. The report concludes that if government productivity had simply matched the private sector, Canada’s GDP would be $32 billion higher today.
This gap is fueled by what Sugarman calls SaaS paper-ware, or legacy software that is essentially a digital facade over a siloed, on-premise architecture. Because these systems were built as disconnected modules for HR, Payroll, and Finance, they require an expensive integration tax to stay in sync.
Every time the government introduces a new policy or mandate, the entire system must be manually updated by external consultants. In contrast, Workday’s single data model means a change in one area, like a budget adjustment, is reflected across the entire enterprise instantly.
“There is no syncing because there is only one version of the truth,” says Sugarman.
The Outcome-Based Revolution
To bridge this gap, federal leaders must challenge the status quo of how systems are bought and managed. Kalan Comba, CTO of Workday Americas, argues that the real waste occurs when governments renovate procurement without changing the underlying process.
"Even when governments try to renovate, they often end up in a massive, paper-based RFP process," says Comba. "They aren’t really challenging how they do things.” To Comba, the necessary step is looking at outcomes. “We need to find those pioneers in government who want to be known for bringing in new systems with the right guardrails and outcomes in mind."
This focus on outcomes is a central pillar of the Shared Services Canada 2026-27 Departmental Plan, which explicitly prioritizes modernization and Digital Sovereignty. By moving to a single data model, agencies gain instant financial transparency. "If a question comes up about a budget, the answer in Workday is instant, not a month-long reconciliation project,” says Basirian.
Championing Digital Sovereignty and Fiscal Predictability
One of the most persistent sources of IT waste is the version jump, or the massive cost overrun that occurs when a legacy system finally requires a multi-year update. Workday’s architecture eliminates this cycle by delivering innovation quarterly at scale.
"Workday offers cost predictability that legacy vendors simply can't," says Basirian. "Because we are a true cloud SaaS with built-in innovation, we don't have those massive cost overruns.”
Workday ensures that Canadian data is secured within Canadian borders, meeting the 2023-2026 Data Strategy requirements while providing world-class technology.
This pragmatic approach to sovereignty prevents departments from being stuck with sub-par, siloed tools. Instead, it allows for a unified system of record that supports the government's mandate for 15% savings without sacrificing service delivery.
Ending the Technical Debt Cycle
The path to a more efficient Canada requires moving from a project mindset – where a system is bought once and decays – to a platform mindset.
By following the recommendations of the Office of the Procurement Ombudsman to increase transparency and simplify procurement, Canada can finally reclaim the $32 billion lost to the productivity gap and build a future-ready public service.
"You aren't just buying software; you are buying the end of the 20-year technical debt cycle,” says Basirian. “By moving to a single-version cloud, the government ensures financial predictability and stays as innovative as the world’s leading companies."
The Cost of Inaction
The findings from the Office of the Procurement Ombudsman highlight that transparency is the only effective antidote to ballooning shadow IT costs and vendor over-reliance. For the Canadian federal government, the choice is no longer between new tech and old tech – it is a choice between a $32 billion productivity drain and a modern, audit-ready public service.
With Budget 2025 and the 15% savings mandate looming, the set it and forget it era of procurement is officially over. By embracing a unified system of record, Canada can finally move at the speed of the citizens it serves, turning fiscal pressure into an opportunity for lasting, meaningful transformation. "The technology exists,” says Comba. “We just need the curiosity and the courage to use it."