Summary

  • Shared Services Canada controlled the procurement; partner departments ran the call centres and supplied the business requirements. In the Employment and Social Development Canada replacement tender, the audit says service-level targets were removed and security requirements deferred until after award, without consistent consultation with the department that operated the service.
  • The older system will be unusable after December 2028. As of July 2026, three centres had moved to its replacement and 10 remained on the old service; migration delays and defects after go-live make the calendar a real service constraint.

The service target was the first thing to go

In a call-centre procurement, a service-level target is the part that tells the buyer what “working” is supposed to look like. Canada’s Auditor General says Shared Services Canada removed those targets from the Employment and Social Development Canada (ESDC) replacement request for proposals. The same revisions reduced system capabilities and pushed security requirements until after the contract award. Shared Services Canada also failed to consult ESDC consistently, even though ESDC ran the call centres and owned the business requirements. The procurement authority kept the pen; the service department carried the calls.

That is the sharper finding in the Auditor General’s 29 October report, Procuring Technology for Call Centres. It describes a recurring split in federal technology buying: one office translates requirements into a tender and controls the contract, while another has to make the system work for the public. When the timetable tightens, the office with procurement authority can trim the specification. The office with callers at the end of the line may discover the cost later.

A known cost error became a smaller system

The earlier Hosted Contact Centre Service (HCCS) contract shows how a spreadsheet can redesign a service. During the original competition, bidders and internal advisers warned Shared Services Canada that the requested costing information omitted the full cost of data storage. The department left the error in place through bid evaluation and award. It then changed the contract in April 2017: the storage-fee calculation changed, some features were removed, and retention periods were shortened.

The audit’s examples are not rounding errors. The per-agent price for core call features such as receiving and routing calls moved from less than $1 to more than $100. Voice authentication was removed. A mandatory five-year data-retention period disappeared. The contract’s overall value did not rise with those 2017 changes, but the system delivered less of the design that had been put to bidders. Canada Revenue Agency call recordings were generally accessible for only two months when the Auditor General examined the issue in 2025.

The deployment was also far smaller and more expensive than planned. The 2013 initiative aimed to modernize 220 call centres across 43 federal organizations. By June 2020, eight centres in three organizations had joined HCCS. Implementation for those eight cost $52 million against an original $16 million estimate. HCCS’s overall contract value reached $251 million through 2028 after option years and an extension; about $180 million had actually been spent as of March 2026. Those are different measures, and the larger number is not a bill already paid.

Payment checks did not close the loop

The same audit found thin evidence that payments matched use. In the invoice sample, Shared Services Canada did not confirm actual system use with ESDC or the Canada Revenue Agency for the usage charges reviewed. Officials said they compared invoices with historical use and call-volume forecasts, but the audit found no evidence that the reasonableness checks were completed. Some professional-services timesheets also lacked evidence of review and approval.

Usage-based billing requires a receipt that joins the invoice to the service actually consumed. Here the procuring department paid, the operating departments had the usage data, and the records did not show the two sides meeting. That is not an abstract paperwork defect: it leaves public buyers unable to demonstrate what the monthly charge bought.

The replacement has a deadline the old system cannot negotiate

The replacement process had already lost time. A cloud pilot launched in 2021 was cancelled after only one supplier qualified. A 2023 restart never began. Shared Services Canada opened the ESDC replacement procurement at the end of 2024, after repeatedly describing its timetable as tight. All three replacement contracts were awarded between May and July 2025. The Auditor General says only three call centres had completed migration by the audit snapshot in July 2026. ESDC had revised its migration plan three times since November 2025 and postponed more than half of its centres.

Its July 2026 estimate put go-live by June 2027; functional problems appeared after go-live in early deployments.

HCCS will no longer be usable after December 2028. The 14-month extension to that date applies to ESDC and cost $36 million. It buys a bridge to migration; it does not make the old system a permanent fallback. The report says 10 centres still used HCCS in July 2026. Separately, it lists 18 centres on contracts with no option years ending in 2027, 101 on contracts ending by 2026 or in 2027 with possible one-year options, and 88 on internally developed legacy systems. Those figures describe a wider portfolio, not 207 HCCS centres.

The governance gap is visible in the handoff. Shared Services Canada controlled technical procurement. ESDC, the Canada Revenue Agency and Immigration, Refugees and Citizenship Canada operated their centres and wrote business requirements. The ESDC tender lost service targets and moved security work past award while the operator was not consistently at the table. Once a target is absent from the contract, the transition team has no contractual yardstick to recover by asking the old question more loudly.

The Auditor General found documentation gaps in the replacement procurements, but concluded they did not change the vendor selection or outcome. The audit locates the failure in scope control, procurement discipline and service continuity. The department agreed to a recommendation for a five-year government-wide plan, with a product roadmap and architecture due by 31 March 2027. The report also records that relevant responsibilities will transfer from Shared Services Canada to Digital Transformation Canada.

By 2028, the government needs more than a replacement contract. It needs named owners for the requirements, the security controls, the service measures, the migration tests and the evidence that each centre has actually moved. A procurement office can buy a platform. It cannot make an omitted target reappear in production.

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