Another government paid Deloitte for work with AI-generated hallucinations


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Summary

AI-generated report errors

A report delivered by consulting firm Deloitte Canada to the Newfoundland and Labrador provincial government contained inaccuracies, some of which have been attributed to artificial intelligence-generated information.

Deloitte's response

A spokesperson for Deloitte Canada told Fortune that the company stands by the recommendations in the report and will revise the report to correct citation issues, asserting that these corrections would not affect the report's findings.

Previous similar incidents

Deloitte was previously accused by the Australian government in October of producing a report that contained similar artificial intelligence errors, including a fictitious quote from a court judgment.


Full story

Consulting firm Deloitte has again found itself under scrutiny for sending a government agency a report containing inaccurate information, likely coming from artificial intelligence. The company responded to the allegations, saying they would fix the issues and that AI didn’t write the report, but that it did assist with citations.

The Canadian province of Newfoundland and Labrador paid Deloitte Canada to produce an analysis of several health care-related topics, including telehealth and the COVID-19 pandemic’s effects on the health care industry’s workers. The report, released in May, is 526 pages long.

An access-to-information request, the Canadian equivalent of a U.S. Freedom of Information Act request, filed by Canadian blogger Matt Barter said the province paid Deloitte nearly $1.6 million CAD (around $1.1 million USD) over a series of installments.

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An investigation by the local news agency The Independent found that the report contained several errors, which it attributed to artificial intelligence hallucinations. The outlet found four citations that don’t appear to exist. They contacted one of the authors cited in the report, who confirmed she hadn’t worked with some of the other cited writers.

“It sounds like if you’re coming up with things like this, they may be pretty heavily using AI to generate work,” one of the erroneously cited authors told The Independent.

A spokesperson for the Newfoundland and Labrador Department of Health and Community Services told the Penticton Herald that they had confirmed the irregularities in the report were mistakes and had contacted Deloitte to address the issue.

Deloitte response

The London-based firm’s Canadian office defended the report, saying it would work to fix the issue after it was discovered to have contained errors.

“Deloitte Canada firmly stands behind the recommendations put forward in our report,” a Deloitte Canada spokesperson told Fortune.

The spokesperson told the outlet that the company would revise the report to address some citation issues, though this would not affect the findings.

Not the first time

The incident is the second in as many months for the consulting firm. 

The Australian government accused Deloitte in October of producing a report on how to reduce welfare spending that contained AI hallucinations similar to the ones found in Canada. The 237-page report also contained a fictitious quote from a federal court judgment. 

A politician told Radio-Canada that the provincial government should seek a refund similar to what Australia was given.

Mathew Grisham contributed to this report.
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Why this story matters

The incident highlights growing concerns over the reliability of artificial intelligence in producing accurate reports for government agencies and raises questions about accountability and oversight in high-cost consulting contracts.

Artificial intelligence reliability

Errors and fabricated citations attributed to AI use in Deloitte's report suggest risks in depending on AI tools for high-stakes government research and decision-making.

Accountability in consulting

Payments of substantial public funds for reports containing significant mistakes prompt discussion about the level of scrutiny, transparency and responsibility required from consulting firms.

Public sector oversight

Multiple errors found in expensive consultancy work raise questions about the processes government agencies use to verify the quality and credibility of external reports.

SAN provides
Unbiased. Straight Facts.

Don’t just take our word for it.


Certified balanced reporting

According to media bias experts at AllSides

AllSides Certified Balanced May 2025

Transparent and credible

Awarded a perfect reliability rating from NewsGuard

100/100

Welcome back to trustworthy journalism.

Find out more

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