The federal government is setting up a new agency to streamline its information technology systems, Public Works Minister Rona Ambrose and Treasury Board President Tony Clement announced Thursday.

It's part of the government's effort to cut costs and balance the budget by 2014.

Government departments currently run their own information technology programs, meaning there are 100 different email systems across the public service, 300 data centres and 3,000 overlapping and unco-ordinated networks.

Shared Services Canada is being tasked with cutting that to one email system and fewer than 20 data centres.

"They're very custom, very niche for each department. As you can imagine, it creates duplication, it creates inefficiency and it creates an opportunity for less security," Ambrose said.

About 8,000 staff, including 1,000 from Public Works, will begin reporting to the new agency, but they won't be moving from their current offices. The budgets for those staff and operations will be transferred to the agency, which Ambrose and Clement said won't cost anything.

"It is very difficult when departments operate in these silos to achieve an initiative like this without creating a new agency," Ambrose said. "Creating this new agency, and a focal point to consolidate, is essential."

The federal government now spends about $5 billion a year on IT. About $2 billion will go to the new agency, which will be required along with all 67 other departments and agencies to find five or 10 per cent in cuts. That's expected to save taxpayers $100 to $200 million within a few years. The remaining $3 billion in IT spending is for department-specific programs, such as the software Statistics Canada uses to calculate the census, and will stay within individual departments.

More secure

Combining the networks will make the government's system more secure, they said.

The streamlining and consolidation mean fewer portals to defend and will make it easier to detect if someone gets into the system, a senior government official said in a briefing following the announcement.

Clement spoke Thursday morning to a public policy audience in Halifax, where his prepared remarks referred to using technology to modernize how the government works.

"There are lots of ways to deliver IT that could be, I believe, less expensive than the way the government of Canada has delivered IT in the past and can therefore be helpful and more sensible, I would say, in the delivery of those services for the average Canadian," he told the Atlantic Institute for Market Studies.

Other governments have saved millions in IT costs, Clement said Thursday afternoon.

Ontario's government saved about $100 million a year after launching its IT transformation in 1998. B.C. reduced its data centres from more than 100 to just two over nine years and cut energy costs by 50 per cent. The government of Australia is consolidating its data between 2010 and 2025, and expects to avoid $1 billion in future costs.

"In the private sector this kind of consolidation is commonplace," he added.

Lower costs, more efficiency

In a speech to top-level public servants in June, he said it was clear more needs to be done to standardize and consolidate across government.

"This brings to mind recent innovations such as shared services arrangements between departments," Clement said in his prepared remarks.

"These arrangements are not only a phenomenal way to pool expertise. They also contribute to lowering costs and making the government even more effective and efficient."

"We'll be taking a look at the operational spending that occurs across government, and asking the hard questions. Should we still be doing this — and doing it in this way? Does this have to be delivered by this organization? Why does it cost as much as it does? Can we find savings? Is it achieving the expected results efficiently? Is this a government priority, and is it affordable during a period of fiscal restraint? Are we achieving value for money?"

All government departments are reviewing their programs to find at least five per cent in cuts as part of the budget-balancing exercise.

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