Government Operations and Estimates

The House of Commons Standing Committee on Government Operations and Estimates met to study the supplementary estimates (C) for 2025-2026, hearing from officials from Public Services and Procurement Canada (PSPC) and Shared Services Canada, as well as union representatives from the Association of Justice Counsel, the Public Service Alliance of Canada, and the Professional Institute of the Public Service of Canada, who also addressed the government's comprehensive expenditure review.

Arianne Reza, Deputy Minister of PSPC, outlined the department's request for $43 million in supplementary estimates, including $17 million for unforeseen advertising campaigns across government, $13.5 million for pension service accommodation costs, $6.2 million for the public lands for homes plan to unlock federal lands for housing, and $2 million to establish a joint transition office for defence procurement reforms. She noted that the $1-billion loan for Canada Post is net new money from the fiscal framework, not a transfer between departments, and that no specific repayment timeline exists, though the loan is structured as repayable. Reza also described efforts to reduce regulatory red tape, such as harmonizing procurement regulations and removing barriers for small businesses, and stated that the government is working with municipalities on the first tranche of Canada Post's transformation plan, focusing on community mailbox locations.

Scott Jones, President of Shared Services Canada, detailed the agency's request for a net increase of $11.4 million, primarily for a new enterprise security information and event management solution to replace a legacy system and strengthen cybersecurity, as well as $25 million in increased vote-netted revenue authority to support the Department of National Defence's operational needs. He explained that SSC blocks approximately 6.5 trillion cyber-threats annually and is consolidating data centres from over 500 to fewer than 200 legacy centres, with four modern enterprise data centres now operational. Jones emphasized that the new security tool will automate and accelerate threat detection across government, and that SSC is prioritizing Canadian-owned cloud providers to support digital sovereignty.

Lorenzo Ieraci, Assistant Deputy Minister at PSPC, clarified that the last two corporate plans for Canada Post have been approved, and that section 32 of the Canada Post Corporation Act means the government would cover repayment if Canada Post cannot. He added that there will be no major changes to the Canada Post network in the near term, and that decisions on rural post offices will be based on service needs.

Nathalie Bertrand, Senior Assistant Deputy Minister at PSPC, explained that advertising requests are subject to multiple controls, including approval by the Privy Council Office and Treasury Board review for ads over $250,000, with standards ensuring non-partisan messaging in both official languages.

Gregory Harlow, President of the Association of Justice Counsel, expressed deep concern over cuts stemming from the expenditure review, particularly the $9.5-million budget reduction at the Bureau of Pensions Advocates within Veterans Affairs Canada, which will eliminate 22 of 61 lawyer positions. He noted that veterans are successful in 89% of appeals when represented, and that the cuts will extend wait times from 1.5 years to potentially five years, meaning some veterans may die or become incapacitated before receiving benefits. Harlow stated that his union was not consulted before the cuts were announced, and that reducing legal capacity while increasing funding for enforcement agencies will lead to unprosecuted cases and unfair outcomes for Canadians.

Sharon DeSousa, National President of the Public Service Alliance of Canada, argued that the government's plan to cut 30,000 public service jobs and $56.7 billion in spending over four years will harm service delivery, with over 13,000 members already receiving workforce adjustment notices. She criticized the government for cutting public services first while spending $26 billion on external consultants, and noted that the government is years behind on implementing the Pay Equity Act. DeSousa called for strategic planning with unions to develop a unified staffing strategy, and argued that the size of the public service should be determined by the needs of a growing population, not arbitrary cuts.

Sean O'Reilly, President of the Professional Institute of the Public Service of Canada, warned that cuts to scientists, veterinarians and inspectors at the Canadian Food Inspection Agency will compromise food safety and risk export market closures, while cuts to engineers at Transport Canada threaten rail safety. He argued that the government should cut outsourcing instead of internal expertise, noting that federal spending on consultants has doubled since 2019 to $26 billion, and that consultants cost up to 26% more than equivalent public servants. O'Reilly stated that the government has not provided details on which services will be affected, and that the use of AI to identify cuts is concerning, as it cannot replace skilled professionals and may introduce bias.

The committee also heard a point of order from a Conservative member expressing disappointment that the minister did not appear, and members debated the impacts of the expenditure review, with Liberal members arguing that cuts focus on back-office functions and that frontline services are protected, while opposition members and union witnesses countered that core services like veterans' legal representation and food inspection are being directly affected.