Government Operations and Estimates

The committee was studying the 2026-2027 main estimates for Public Services and Procurement Canada (PSPC), Shared Services Canada (SSC), the Office of the Governor General's Secretary, and the Treasury Board Secretariat. Appearing were Michael Hammond, Scott Davis, Ken MacKillop, Mark Quinlan, Lorenzo Ieraci, Dominic Laporte, Kim Steele, Bill Matthews, James Stott, Antoine Brunelle-Côté, and Annie Boyer.

Michael Hammond, PSPC's CFO, presented a total opening net budget of approximately $5.9 billion, a net decrease of $1.3 billion from the previous year, largely due to the completion of contractual milestone payments for major infrastructure initiatives. He noted a $97.5 million decrease in operating funding from the comprehensive expenditure review, which will streamline internal processes and reduce spending on management consulting, and a $57.3 million decrease related to the current pay administration program alongside a $67.6 million increase for testing the next generation pay and HR system.

Scott Davis, SSC's CFO, stated that SSC is seeking a decrease in funding reflecting savings from the expenditure review and changes to multi-year initiatives, with targeted new funding for core IT services and cybersecurity. He highlighted CANChat, an in-house generative AI tool being deployed across government to ensure data sovereignty, and noted that 91% of SSC's contracts go to Canadian or non-American companies, with 52.18% of IT contracts awarded to Canadian-headquartered firms.

Ken MacKillop, Secretary to the Governor General, outlined the office's $22.2 million budget, with $16.4 million for salaries, and noted a required $1.3 million in ongoing savings from the expenditure review by 2028-29. He confirmed that five former governors general claimed over $550,000 in expenses last year under a program in place since 1979, but said the details of what was spent are not publicly disclosed, and he could not immediately say how many of the committee's 2023 travel recommendations have been fully implemented.

Mark Quinlan, from PSPC's Real Property Services, explained that the decision to return to the office was not made by PSPC, and that his role is to provide space based on employer needs, noting that some departments have enough workspaces while others do not. He said he could provide best practices on space use but not studies on the return-to-office decision, as that falls to the employer.

Lorenzo Ieraci, from PSPC's Policy, Planning and Communications, explained that proposed adjustments to the Canada Post Corporation Act would allow law enforcement to seize letters with a warrant under another act, addressing a gap where even with a warrant, letter mail cannot be opened while in the postal system, citing fentanyl as a potential risk.

Dominic Laporte, from PSPC's Procurement Branch, said the buy Canadian policy threshold will be lowered from $25 million to $5 million, and that there is discretion to apply the policy to contracts initially under that threshold if they increase significantly. He noted that a review of large contracts requested by ministers did not contribute to the CER savings, and that strengthened measures have been put in place for professional services, including moving to outcome-based contracts and caps on duration and value.

Kim Steele, from PSPC, clarified that additional funding for the pay centre is to maintain surge capacity for cases related to early retirement and workforce adjustment, not to clear the backlog, which is at 88,000 cases—the lowest since Phoenix began tracking. She said AI is being introduced to help gather information but not make decisions, and she would provide the cost of implementing AI later.

Bill Matthews, Secretary of the Treasury Board, said the "Canada Strong" slogan is now the brand of the government, as it has been used in approved programs like the Canada Strong Pass and in budget titles, and that advice to ministers on its use is cabinet confidence. He described the comprehensive expenditure review as a reallocation exercise that identified $9 billion in savings for 2026-27, and said the $1-billion Vote 50 contingency fund for defence is intended for projects that move more quickly than anticipated, with reporting in supplementary estimates. He noted that the office for digital transformation has been announced but not yet stood up, and that the return-to-office decision is a philosophical choice by the employer to improve collaboration.

James Stott, from Treasury Board Secretariat, reported that since 2020, five complaints about government advertising have been received and investigated, with no issues found, and that a recent complaint about budget 2025 advertising was shared with the Department of Finance.

Antoine Brunelle-Côté, from Treasury Board Secretariat, added that the expenditure review set slightly higher targets for departments to provide flexibility for cabinet committees, and that future horizontal reviews on topics like youth and skills are planned.

Annie Boyer, Treasury Board Secretariat's CFO, said Vote 50 is for up to $1 billion, to be approved with the main estimates and utilized after Treasury Board approval, but she could not answer questions about the sovereign wealth fund's borrowing costs or risks, deferring to the Department of Finance.

The committee also discussed procedural matters, including a request for a breakdown of costs for the Governor General's office over the last five years and a correction of the record by a member regarding a previous statement by a minister.