Public Accounts

The House of Commons Standing Committee on Public Accounts met to study the Public Accounts of Canada for fiscal years 2024 and 2025. Appearing were Karen Hogan, Auditor General of Canada; Annie Boudreau, Comptroller General of Canada; Nick Leswick, Deputy Minister of Finance; Evelyn Dancey, Assistant Deputy Minister, Economic, Fiscal and Intergovernmental Policy Branch, Department of Finance; and Blair Kennedy, Executive Director, Government Accounting Policy and Reporting, Treasury Board Secretariat.

Karen Hogan reported that her office issued a clean audit opinion on the government's consolidated financial statements for both fiscal years, meaning the information is presented fairly and in accordance with Canadian public sector accounting standards. She highlighted ongoing problems with pay administration, where about 29% of sampled public servants still had pay errors, mostly due to data entry issues, and deficiencies in IT general controls over key systems like the standard payment system, which create inefficiencies for her audit. She also raised new concerns about National Defence's process for recording operating expenses and noted that 77% of Crown corporations did not have their corporate plans approved before their fiscal year started, while 80% experienced delays in board appointments, both of which can hinder governance and operations.

Annie Boudreau noted that the public accounts are produced jointly by several entities and that the Auditor General has issued a clean opinion for the 27th consecutive year, reflecting high-quality financial reporting. She provided highlights, including a deficit of $36.3 billion in 2024-25, down from $61.9 billion in 2023-24, with revenues rising to $511 billion and total spending at $547 billion, about two-thirds of which was transfer payments. She addressed questions on executive bonuses, stating they depend on multiple criteria beyond program delivery, and on the benefits delivery modernization program, confirming that the $6.6 billion cost covers multiple benefit systems through 2030-31, and she agreed to provide the committee with any Treasury Board submissions related to cost overruns.

Nick Leswick emphasized that Canada enjoys a strong AAA credit rating and a low net debt-to-GDP ratio, comparing favourably to other advanced economies, and that the government's fiscal anchors include a declining deficit-to-GDP ratio and an operating balance by 2028-29. He acknowledged the need to be mindful of debt sustainability and the importance of keeping deficits in check, but deferred to the government on the choice of fiscal anchors. He also noted that the government's capital budgeting framework is intended to focus spending on productivity- and growth-enhancing investments, though he agreed with a member that accessing CPP and QPP assets in a time of distress would be prohibitive, while defending their inclusion for international comparisons.

Evelyn Dancey explained that the capital budgeting framework is an economic decision-making tool distinct from the public accounts, which will continue to be prepared under public sector accounting standards. She stated that the government's fiscal forecast in budget 2025 is based on independent private sector forecasts and does not include dynamic growth assumptions from the government's own measures. She also clarified that the difference between carbon pricing revenues collected and amounts redistributed in 2025 was due to the timing of program payments, and that no revenue is projected for 2025-26 after the carbon tax was eliminated.

Blair Kennedy briefly noted that the $3 trillion in contingent liabilities reported in the public accounts is mainly driven by insurance programs at the Canada Deposit Insurance Corporation and Export Development Canada, accounting for about $2.2 trillion, and he offered to provide a detailed breakdown.

The committee also discussed the government's new capital budgeting approach, with Hogan cautioning that it could create confusion for readers trying to crosswalk budget promises to financial statements, as transfer payments for infrastructure would be shown as operating expenditures in the public accounts. Boudreau and Dancey reiterated that no accounting changes are planned and that the framework is separate from financial reporting. On the issue of COVID-19 benefit payments, Hogan noted that the allowance for doubtful accounts has risen to about $10.5 billion, and she reiterated her concern that the Canada Revenue Agency did not follow her office's earlier recommendation to conduct broader reviews of potentially ineligible recipients, which could have reduced losses. No procedural debate, motions, or votes occurred during the meeting.