ALC says changing IT providers will save $4.5M, not cost $7.6M

The Atlantic Lotto Corporation (ALC) says the decision to switch IT providers will save it$4.5 million dollars over the next two fiscal years and will not cost the corporation the $7.6 million dollars estimated in its audited financial statements.

"We didn't end up paying $7.6 million in termination fees or early exit fees," said Chief Financial Officer Patrick Daigle, but declined to state what the total cost of terminating the contract was, citing a non-disclosure agreement.

ALC signed a contract with CGI Group, Inc. in 2010, which Daigle said was set to expire in June 2017. In September 2016 ALC terminated that contract ahead of schedule while switching to Bellas its central IT service provider.

On Tuesday, CBC reported the original estimates associated with the termination, based on the numbers in ALC's audited financial statements.

The figure approximately $7,617,000 was determined by ALC in March, based on its contract with CGI.

At the time, ALC didn't provide specifics about the cost savings associated with the new services.

CBC emailed CGI Group last week requesting a comment and has not heard back.

• Provinces on hook for estimated $7.6M in fees as ALC switches IT providers

A new IT model

The IT needs of the corporation have changed, said Daigle, resulting in some of the savings.

"The contract was put in place several years ago, and as you can appreciate the gaming industry and in particular the pace of technology is changing rapidly and we have to keep pace," he said.

He said some of the IT services previously provided by CGI Group are now being handled internally the costs of which have been factored into the total savings amount.

"We're changing the way we deliver IT services, so the contract really didn't reflect our needs any more," said Daigle.

"The difference of all of that ended up actually saving taxpayers $4.5 million and not in fact costing them."

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