If I recall the article I read last week, they spent $600+ million to build that website and the infrastructure behind it, almost all of it paid to a Canadian company nobody had ever heard of before. CGI Global or something like that.
So yeah, absolutely, the whole problem is that they didn't spend enough money. In fact, everything the federal government does would magically become excellent with just some more cash.
CGI is a fairly large IT Services company. They aren't IBM and smaller than CSC but they do a lot of work with many Fortune 500 companies so no idea why you would not have heard of them.
Either way IT is notorious for either being underfunded or overfunded depending on the company or govt entity and what the project is. There are many projects that are massively overfunded and then others that are so underfunded it's not even funny. A lot of companies can barely get any money for support/services because apparently computers just always work and nobody ever needs help these days.
I sell IT Services myself and it's funny watching the differences in culture/politcs from a federal govt client to a fortune 10 company etc..
Oh and as an FYI a lot of times CIO's or VP's get bonuses by reducing IT cost year over year. That's a lot of the reason you the cuts in IT.