Shared Services Canada warns government of bleak financial outlook

Canada's tech support agency is warning the federal government it's on track to be in deficit by the end of this year.

In its quarterly financial report dated June 30, 2016, Shared Services Canada says its forecast "is indicative of a deficit position, compelling a risk-based determination of activities and projects that will be curtailed, deferred or stopped."

It goes on to say that the troubled department may seek permission from the government to exceed its $1.8-billion budget, even though it received an extra $359.5 million for 2016-17.

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The previous government created Shared Services Canada (SSC) in 2011to modernize federal informationtechnology in a bid to save money and improve security.

CBC News asked SSC for information aboutwhy the department was forecasting a possible deficit and to elaborate on what activities are being scaled back, delayed or cancelled.

In its first and only response, the department said it is committed to sound financial and project management, which includes flagging any potential risks or shortfalls.

Even so, spokeswoman Stephanie Richardsonsaid SSC was not in deficit at the end of the first quarter.

"Since then, Shared Services has conducted a series of reviews, prioritization exercises and internal reallocations to reduce the forecasted gap," Richardson wrote in an e-mail.

The department has not yet responded to CBC's request to elaborate on the funding gap and how it is being reduced.

Since its inception, SSC has struggled to meet the expectations of several departments. Canada's chief statistician, Wayne Smith, RCMP Commissioner Bob Paulson and high-ranking members of the Canadian Forces have all raised serious concerns about, among other things, data centre crashes, red tape, bad customer service and unpaid bills.

Earlier this year Auditor General Michael Ferguson found Shared Services Canada has "challenges in adequately demonstrating that it is able to meet its objectives of maintaining or improving IT services and generating savings."

An independent review of SSC, ordered by Treasury Board president Scott Brison, is now underway, and the department is conducting its own internal review.