IBM Canada is again under scrutiny as federal auditors probe a major call centre contract — the latest in more than a decade of complaints and inquiries over the company’s public sector work, marked by rounds of finger-pointing and mounting costs.

The most recent inquiry follows the auditor general’s examination of the Canada Revenue Agency’s advice to taxpayers. It found that, in addition to receiving mostly incorrect general information about taxes, callers left on hold did not get updates on their wait times, even though that feature was described in IBM’s contract for the telephony system. Questions about invoices, penalties and oversight have prompted Auditor General Karen Hogan to launch a separate audit into how bureaucrats managed IBM’s contract.

In Quebec, multiple inquiries are examining the disastrous February 2023 rollout of SAAQclic, the digital licensing and vehicle registration platform built by IBM and two partners that caused widespread chaos. Long lines formed at service centres after bugs in the system suspended some drivers' licenses and left car dealers unable to register vehicles, among other errors.

Ultimately, taxpayers have footed the bills. Spending on the telephony contract is projected to reach $214 million by 2027, exceeding its $50-million minimum guarantee, while the SAAQclic $638-million price tag has climbed to $1.1 billion.

These are only two of several public-sector projects in Canada that have drawn scrutiny over the performance of IBM systems and government oversight of IT projects over the past decade. Each problem has prompted new rounds of questions and blame, with the IT giant managing key infrastructure that federal and provincial officials say either needs upgrades or has never worked as promised.

IBM Canada spokesperson Lorraine Baldwin told the IJF that “since the pay‑for‑usage contract began in 2015, IBM has worked closely with Shared Services Canada and the Canada Revenue Agency to meet evolving government needs.”

“Our work has always aligned with government specifications, and we remain confident in continuing to meet all required service levels within the contract,” she said.

On the Quebec matter, Baldwin said IBM Canada “acted in good faith and performed our responsibilities in accordance with the law, our contract and applicable professional standards.”

Canada Border Services Agency workers are also struggling with an IBM-built platform that does not consistently match traveller entries and exits or automatically identify visitors who have overstayed their visa, according to a February 2025 report.

Federal bureaucrats searching for solutions are themselves caught in the fallout from IBM’s Phoenix pay system, implemented in 2016. The Public Service Alliance of Canada says the system’s consistent errors have led to more than 327,000 cases requiring resolution, and a Quebec coroner found that at least one death by suicide was linked to its failure to pay an employee. In April 2025, the federal government settled a class-action lawsuit providing a few hundred dollars per year in compensation for those who have been “Phoenixed,” adding to at least $5.1 billion already spent on fixes, according to one official.

The financial losses were not recoverable for an Australian government. Queensland state officials tried to claw money back from a failed IBM pay system through a 2013 lawsuit and ended up paying the company’s legal costs. A separate inquiry found the government failed to properly manage the system — or hold IBM accountable.

Politicians bear responsibility when a major project fails, Quebec Premier François Legault said in a post on X in March, about his decision to order an independent inquiry into the SAAQclic platform’s failures.

Those discussions have been marked by finger-pointing, with a minister accusing bureaucrats of providing inaccurate information, officials alleging favouritism during the bidding process and an IBM manager countering that its subsidiary did not recover operational costs.

The blame ultimately rolls uphill, according to Legault’s post. "When there are failures in government,” he wrote, “it is we who are accountable."

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