Quebec watchdog imposed safeguards on SIFA health-IT project before restart

Quebec’s procurement regulator imposed safeguards on the health network’s SIFA computer project after finding serious failures in budget oversight and a premature transfer of responsibility to Santé Québec. The ruling did not cancel the project; the agency subsequently announced authorization to restart it.

The Autorité des marchés publics signed Order 2026-02 on May 6, 2026. Its listing and announcement followed on May 7. The order examined the handling of a system intended to replace aging finance and purchasing software across much of the health network.

A contract total was not a development budget

The original contract, signed in March 2024, was worth $408.7 million over 15 years and covered both development and recurring services. That figure was distinct from the $96.2-million envelope authorized in 2022 for SIFA’s development, including internal and external costs.

The distinction mattered because development investments were largely capital expenditures that had to be financed through authorized funding under the information-resources component of Quebec’s infrastructure plan, known as PQI-RI. If that funding was inadequate, the agency could not simply draw on other available budgets: it had to stay within the envelope or obtain a new authorization.

At contract signing, the ministry had treated much of the contract’s spending as non-capital costs payable from internal budgets. It soon identified a classification problem and later recognized that substantially more development spending required PQI-RI funding.

Reclassifying spending could reduce the portion payable from internal budgets, but it did not create the missing authorized infrastructure funding. The AMP found the ministry had not dealt with that problem in a structured way. Order, sections 2.1–2.3 and note 6.

Stopping the project also carried risks

Santé Québec suspended the project in October 2025 as its development funding approached exhaustion. Its revised estimates, recorded in the May order, put development costs at approximately $330 million after a further anticipated increase. Those were estimates for development, not a replacement description of the original 15-year contract’s total value.

Termination was not presented as a cost-free alternative. The contract contained a clause which the AMP described as preventing either party from terminating before the sixth year. The contracting health institution said it accepted the clause to stabilize the relationship and support delivery on schedule.

In the historical circumstances described by the order, Santé Québec estimated that termination could generate approximately $175 million in compensation. That was the agency’s estimate of potential exposure—not an amount awarded by the AMP, an adjudicated debt or a finding that the sum was presently payable. Order, sections 2.2 and 2.4–2.6; financial table, p. 7.

Ministry explanation rejected

The ministry argued that budget responsibility had passed to Santé Québec in summer 2024 and said it had waited for the new agency’s position before requesting additional funding.

The AMP rejected that account of responsibility. Santé Québec obtained its full powers only on Dec. 1, 2024. The ministry had been responsible for the asset and its financing when the contract was signed, and the regulator found inadequate checks before signing and insufficient involvement after the funding problem emerged.

The AMP also warned that proposed amendments or substantial additional contracts could breach procurement requirements without corrections and rigorous oversight. Amendments had to remain incidental and could not alter the contract’s nature. This was a warning about contemplated changes, not a finding that every proposed amendment had already been unlawfully made. Order, sections 4.1–4.2.

Conditional safeguards, followed by a restart announcement

Subject to government approval of the requested budget increase and authorization to continue, the order required Santé Québec to strengthen governance, budget and deliverables tracking, and review of financial data. The ministry was directed to supply relevant information and assistance. Each body had to submit a written action plan within 60 days of a favourable government response—not simply 60 days from the May order.

Santé Québec also had to inform the AMP about the restart’s financial terms, changes to contract scope and additional procurement processes. The regulator recorded the agency’s commitment to correct incomplete and inaccurate public dashboard information. Order, section 5.

On July 17, Santé Québec said the required authorizations had been obtained after a project review, stronger governance and tighter risk controls. It said the system would replace 41 aging systems and forecast eventual savings exceeding $1.2 billion. Those were agency projections, not savings established by the AMP.

In a September 22 statement, the agency distinguished $329.4 million in project costs from $347.9 million in recurring operating costs over 18 years. It argued that a fair comparison must also include the cost of retaining existing systems and expected efficiency gains.