The U.S. government defends a $1.1M Deloitte Canada AI contract despite past AI citation errors, citing strict oversight and new disclosure rules.

The federal government defends a $1.1-million contract with Deloitte Canada for AI advisory work, despite the firm’s admission of AI-generated citation errors in past reports for Newfoundland and Labrador and Australia. Employment and Social Development Canada says the project’s scope is distinct and includes strict AI use conditions, with enforcement if breached. Public Services and Procurement Canada now requires suppliers to disclose AI use upfront. Critics question the judgment of hiring Deloitte given the errors, warning of risks to public trust and policy quality. Newfoundland and Labrador’s premier demands accountability, and a review is underway on whether to seek repayment for a flawed $1.6-million report.