Canada risks catastrophe with 25-year cloud service contract

Canada is currently working to centralize its IT infrastructure and reduce reliance on outdated legacy systems as part of a broader response to digital transformation challenges faced by the government. Recently, Shared Services Canada announced its intention to procure commercially available cloud services, including Infrastructure as a Service (IaaS) and Platform as a Service (PaaS). This approach aligns with trends observed in digitally advanced governments worldwide and aims to support a more cohesive and efficient federal operation. However, the proposed contract period of 25 years, equivalent to 300 months, raises significant concerns given the historical issues surrounding long-term technology contracts in Canada. Past projects like ArriveCan and the Phoenix payroll system provide cautionary tales, marked by soaring budgets and operational failures. For example, ArriveCan's costs escalated from an initial estimate of $80,000 to nearly $59.5 million, while the Phoenix system's estimated expenses surged from $300 million to approximately $3.5 billion in just eight years. Such precedents underscore the risks of committing to prolonged contracts, particularly as technology rapidly evolves. Moreover, long contract durations could lead Ottawa to lag behind advancements in the field, as evidenced by the persistence of obsolete technologies like fax machines within government institutions. To navigate these risks, experts suggest prioritizing flexibility in vendor agreements and learning from the practices of the European Union, where efforts are underway to mitigate dependency on specific vendors through regulations like the EU Data Act. By adopting shorter contract periods with options for extensions, Canadian agencies could better adapt to evolving technological landscapes and ensure their procurement strategies align with current needs. Thus, the implications of these decisions are profound, as they not only affect current operational capabilities but also shape the future of public service delivery in Canada.