SAAQclic fiasco: Auditor General’s $1.1B estimate may be too low

One month after Auditor General Guylaine Leclerc raised a red flag over the exploding costs of the SAAQclic project, prompting the creation of the Gallant Commission, the Société de l’assurance automobile du Québec (SAAQ) issued an internal document confirming that the bill would be nothing like the initial estimates.

Last February, the auditor estimated that the project, which was supposed to cost $638 million, would instead cost “at least $1.1 billion” by spring 2027.

A month later, the SAAQ’s financial manager for the project, Élodie Hudon-Chabot, sent an internal memo indicating that $916 million had already been spent as of March 31, 2025, and that the total bill would reach $1.086 billion by the end of the project, which is within $14 million of the amount put forward by the auditor general.

$1.1 billion: an underestimate

However, the Auditor General’s assessment covered the entire CASA (Carrefour des solutions d’affaires) project, including a third component and certain elements that are not included in the cost table released on Tuesday and that will not be implemented. In other words, the SAAQ would certainly have exceeded the $1.1 billion figure revealed by the Auditor General to everyone’s astonishment.

In this table, unveiled for the first time before the Gallant Commission in Montreal, we see that $134 million spent by the SAAQ on “operation and evolution of the solution” includes $41 million for “crisis management,” but no details accompany this description.

Bonnardel and Caire: an incomplete picture

On Tuesday, it was also revealed that Karl Malenfant, the head of the SAAQclic project, did not present a complete picture to the then Ministers of Transport and Cybersecurity and Digital Technology, François Bonnardel and Éric Caire, during meetings to review the progress of the work in September 2021 and June 2022.

On Tuesday in Montreal, during Malenfant’s fifth day of testimony before the Gallant Commission, he presented the “table” submitted during the meeting with Minister Bonnardel, as well as several others detailing the financial progress of the project.

The table presented to the minister showed a budget of $682 million, while indicating that the $458 million contract with the Alliance between SAP-LGS (IBM) would be sufficient to cover the second phase of delivery, with the remainder to come from the budgets of the Société de l’assurance automobile du Québec (SAAQ).

However, this initial contract also provided for the delivery of a third phase and a provision of $46 million for possible additions, but this money had already been fully committed to the second phase.

When asked about the absence of this information in the document presented and the details of how these figures were arrived at, Malenfant simply replied that he had not been asked.

Profitability evaporates

Furthermore, the placemat presented to the minister in September 2021 referred to a “profitable project.” In 2017, internal project managers had estimated the project’s profitability at 10 per cent. However, other documents evaluating the project’s profitability, well before the meeting with Minister Bonnardel, showed that profitability was estimated at only 6.2 per cent in February 2020 and 2 per cent in July 2020.

The project’s profitability had been used as an argument to justify its funding, but Karl Malenfant confidently stated that “the primary objective is not to make money. It is to manage the sustainability of the SAAQ’s assets.”

In June 2022, during a meeting with Éric Caire, Minister of Cybersecurity and Digital Technology, an almost identical placemat was presented to him, but this one no longer mentioned the project’s profitability and no longer stated that the $458 million contract envelope would be sufficient to complete the delivery of the second phase.

On Monday, Malenfant indicated that he had known since 2020 that $222 million would be needed to complete the project.

Should the minister have asked questions?

Another difference is that this placemat shows a yellow light indicating a contractual strategy “under validation,” as it was already clear that the contractual envelope would be insufficient. Commissioner Denis Gallant then asked Malenfant if Caire should have asked more questions. “That’s a good question,” he replied.

Malenfant’s testimony also highlighted that disagreements over cost increases resulting from new assessments of the work required and additions, among other things, were dealt with in mediation and that this mediation had placed the SAAQ in a weak position. Without an agreement, the Alliance could have withdrawn from the project, resulting in a net loss of $60 to $80 million, Malenfant argued.

–This report by La Presse Canadienne was translated by CityNews