Deloitte, a prominent global professional services firm, is currently under intense scrutiny following allegations that its reports, commissioned by government bodies, contain errors potentially linked to the use of artificial intelligence (AI). This controversy has recently emerged in Canada, just a month after a similar incident involving a report produced for the Australian government.

In the Canadian instance, Deloitte issued a near $1.6 million report for the provincial government of Newfoundland and Labrador. The 526-page healthcare report, disseminated in May 2025, was commissioned to advise the province's health department on various critical topics, including the impact of the COVID-19 pandemic on healthcare workers, retention incentives, and virtual care, particularly as the province grapples with a significant shortage of healthcare staff. Canadian publication The Independent, as reported by Fortune, first highlighted that the report was allegedly riddled with AI-related errors. These errors include citations to fictional academic papers used to draw cost-analysis conclusions, references to authors on papers with which they had no involvement, and even citations of coauthors who had never collaborated.

Gail Tomblin Murphy, an adjunct professor in the School of Nursing at Dalhousie University in Nova Scotia and one of the authors cited in a non-existent academic paper within the report, told The Independent that these findings suggest Deloitte is "heavily using AI to generate work."

In response to Fortune's inquiries, a spokesperson for Deloitte Canada stated that the firm "stands behind the recommendations put forward" in the report. While asserting that AI was not used to write the report, the spokesperson admitted it was "selectively used to support a small number of research citations." Deloitte confirmed they are revising the report to correct these citation errors, emphasizing that these adjustments do not impact the report's core findings. Newfoundland and Labrador’s Department of Health and Community Services and the Office of the Premier have not yet publicly responded to the queries or issued a statement on the matter.

This Canadian situation closely follows an earlier controversy in October when Deloitte agreed to partially refund the Australian government a $4,40,000 fee. The firm admitted to using generative AI to assist in producing a report commissioned in 2024 by the country's Department of Employment and Workplace Relations (DEWR). This Australian report was tasked with assessing the targeted compliance framework and its supporting IT system, which automatically issues penalties to job seekers who fail to meet their mutual obligation requirements.

Errors in the Australian document, such as non-existent references and fabricated citations, were uncovered and exposed by the Australian Financial Review (AFR), leading to widespread criticism. At that time, Deloitte also maintained that while generative AI was used, it did not alter the "substantive content, findings or recommendations" of the report. Both incidents underscore a pattern of allegations regarding AI-related inaccuracies in Deloitte's government reports, prompting questions about the firm's quality control and ethical use of AI in professional services.