OTTAWA — The Conservatives launched a new agency Thursday in an attempt to slash IT costs across the entire government, as part of the effort to balance the budget by 2014-15.

But lumped within the financial savings and heightened security, the move could also result in job losses.

Any jobs lost in the move to streamline federal IT systems will come as the new agency, along with 67 other departments and agencies, come up with five and 10 per cent cost-cutting plans as part of the government's cost-saving review.

The government will have a better grasp on possible job losses once the new agency, called Shared Services Canada, and the agencies from which it will take its budget and employees perform strategic reviews, Treasury Board President Tony Clement said .

"There will be a process, and the 2012 budget will have an answer," Clement said.

Even with the prospect of job losses, the project is long overdue, said Public Works Minister Rona Ambrose, who joined Clement in Ottawa to make the announcement.

As it stands, government departments and agencies operate their own IT programs. Because of that, there are more than 100 different email systems, more than 300 data centres and more than 3,000 network services operating across the government, Ambrose said.

The current set up creates "duplication, it creates inefficiency and it creates an opportunity for less security," said Ambrose, who, as Public Works minister, assumes responsibility for the new agency.

Shared Services Canada is set to help government move to one email system and reduce the number of data centres to 20.

The streamlining process won't cost anything or require any new jobs, both ministers said.

Shared Services Canada will take about 8,000 employees from a number of "IT-intensive" departments. Although these employees will be reporting to the new agency, they will remain at their current offices.

The budgets associated with those employees and their responsibilities will be transferred to the new agency.

The federal government currently spends about $5 billion annually on information technology, the ministers said. About $2 billion of that will go to the new agency which will be expected to find five or 10 per cent of its spending to cut — just as the other 67 departments and agencies are expected to, as part of the government-wide strategic operating review.

The announcement ignited some concern among IT service providers in Ottawa.

If the government decides to consolidate all its small IT contracts into one or two large ones, many of the small and medium-sized businesses risk finding themselves squeezed out of the picture, said Serge Buy, director of government relations with Canadian Business Information Technology Network, which represents about 100 Ottawa-area small and medium-sized businesses that provide IT services to the federal government.

"You're looking at 5,000 jobs in the IT professional services sector in the National Capital Region," he said. "We welcome the idea of the agency. But there's a huge concern in the industry because there's the question of how the streamlining will be done."

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