Newfoundland and Labrador overhauls procurement after report errors thought to be AI

The statue of John Cabot is shown in front of the Confederation Building in St. John's NL on Monday, May 17, 2021. THE CANADIAN PRESS/Paul Daly

ST. JOHN’S — The Newfoundland and Labrador government has overhauled its process for awarding contracts after false citations thought to be generated by artificial intelligence turned up in two reports, including one prepared by Deloitte Canada.

Vendors bidding on work for the provincial government must now say if they intend to use artificial intelligence in completing the contract, said Barry Petten, the Progressive Conservative minister responsible for public procurement. The province can also audit a company’s use of AI, he said.

The changes were introduced after the false citations in the reports submitted to the Newfoundland and Labrador government attracted attention from across the country amid widespread scrutiny of large language models and their use.

The new criteria also appear to position Newfoundland and Labrador as one of the leading provinces when it comes to setting guardrails on the use of artificial intelligence by contractors, according to a scan of other jurisdictions by The Canadian Press.

“We had to do something,” Petten said in a recent interview. “We’re just trying to close the loopholes.”

In the meantime, the government is “reviewing options related to compensation” for the mistakes in the Deloitte report, said an email from Jennifer Konieczny, a spokesperson for the provincial Health Department.

As reported last year by Radio-Canada and The Independent online news outlet, respectively, citations referring to sources that appeared not to exist were found in reports submitted to the former Liberal government.

One was prepared by the government’s Education Accord team, which was tasked with forming a 10-year plan for improving education in the province. The other, a human resources plan for health-care staff, was prepared for the provincial Health Department by consulting firm Deloitte Canada.

In an email, Deloitte told The Canadian Press it stands behind the recommendations in the health human resources report and said it was not written with AI. The company used AI “to support a small number of research citations” and it has revised the document with a small number of citation corrections, the unattributed email said.

Using access to information legislation, The Canadian Press obtained a copy of the contract for the human resources study signed by the previous Liberal government and Deloitte in 2023. It contained no provisions about whether the company could use artificial intelligence or how it could be used.

The province paid about $1.6 million for the report, including tax, the Health Department said.

Petten said his government changed the forms that it uses for requests for proposals to clearly state the province’s policies on artificial intelligence. Companies responding must say if they intend to use AI and how, and the province can examine that use at any time, he said.

“We may investigate, approve, deny or modify a vendor’s and intended use of AI, and we may also audit the vendor’s use of AI,” Petten said. “Those are big changes.”

Tom Cooper, a business professor at Memorial University, said governments should assume consulting companies such as Deloitte are using artificial intelligence, and they should spell out what use is acceptable in their contracts. Governments should also expect better reports, since artificial intelligence tools such as large language models can save contractors time and money, he added.

“Reports should be getting much better. They should be more comprehensive, they should involve more interviews, the methodology should be more outlined, there should be more jurisdictional scans,” Cooper said in an interview. “If you’re getting the same report (quality), then there’s a problem.”

The Canadian Press asked every province if they included guidelines or provisions about using AI in their procurement documents, as Newfoundland and Labrador does. Alberta asks companies to be able to explain how they use AI and to keep careful documentation in case the government audits that use, according to a government spokesperson.

Saskatchewan and Nova Scotia have rules established for information technology contracting, requiring suppliers to be transparent about using AI, said spokespeople in those provinces.

New Brunswick lists privacy and security requirement pertaining to AI in its procurement documents for IT services or products, a spokesperson said.

Other provinces, including Ontario, Manitoba and British Columbia, have no provisions at all.

Petten said Newfoundland and Labrador began changing its procurement documents in December.

“It’s on the fly, we’re learning as we go,” he said. “And hopefully we’ll get better in time.”

This report by The Canadian Press was first published March 11, 2026.

Sarah Smellie, The Canadian Press