THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Tuesday, November 25, 2025
The Standing Senate Committee on National Finance met this day at 9 a.m. [ET] to study the Supplementary Estimates (B) for the fiscal year ending March 31, 2026.
Senator Claude Carignan (Chair) in the chair.
[Translation]
The Chair: I wish to welcome all senators as well as the viewers across the country who are watching us on sencanada.ca.
My name is Claude Carignan, senator from Quebec and chair of the Standing Senate Committee on National Finance. I would now like to ask my colleagues to introduce themselves.
Senator Forest: Good evening. Éric Forest, Gulf division, Quebec. Welcome.
[English]
Senator Pupatello: Good morning. My name is Sandra Pupatello. I’m a senator from Ontario.
[Translation]
Senator Gignac: Good evening. Clément Gignac from Quebec, Kennebec division.
Senator Cardozo: Good evening. Andrew Cardozo, Ontario.
[English]
Senator Ross: Good morning. Krista Ross, New Brunswick.
Senator MacAdam: Jane MacAdam, Prince Edward Island.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
[Translation]
Senator Hébert: Martine Hébert from Quebec.
The Chair: Thank you, colleagues. Today, we begin our study of the Supplementary Estimates (B) for 2025–2026.
For our first panel, we are pleased to welcome representatives from the Office of the Parliamentary Budget Officer: Jason Jacques, Interim Parliamentary Budget Officer; Mark Mahabir, Director General, Costing and Budgetary Analysis, and General Counsel; Govindadeva Bernier, Director, Budgetary Analysis; and Caroline Nicol, Advisor-Analyst.
Welcome and thank you for accepting our invitation to appear today.
Mr. Jacques, you are a regular here, so please go ahead with your opening remarks for a maximum of five minutes; then there will be questions from the senators.
Jason Jacques, Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer: Honourable senators, thank you for the invitation to appear today. We are pleased to be here to discuss our report on the Supplementary Estimates (B) for 2025–2026, which was published on November 19, 2025.
[English]
The government’s Supplementary Estimates (B) for 2025-26 outline an additional $10.7 billion in budgetary authorities. Major areas of planned spending include health care, Indigenous-related programs and claims, defence and personnel. The single largest voted expenditure in these supplementary estimates is $1.6 billion to Health Canada to support access to dental services under the Canadian Dental Care Plan.
[Translation]
We would be pleased to respond to any questions you may have regarding our estimates analysis.
[English]
The Chair: Thank you. With the time that we have, I think we could start our first round of five minutes each, and after that we will see if we have time for a second round.
Senator Marshall: Thank you to the Parliamentary Budget Officer and his officials for being here today. I have several short questions. The first one is: There are no new budget initiatives in the Supplementary Estimates (B), and I thought there might be some. I think the budget said there is going to be about $20 billion in new spending for this year. It is not in the Supplementary Estimates (B), and we usually get the Supplementary Estimates (C) toward the end of March. Are you able to offer any explanation as to why there would be no new budget initiatives?
Mr. Jacques: The short answer is no. The longer answer, which I promise is not a lot longer, is that there are the Supplementary Estimates (C). In addition to that, the government has the option of statutory spending. Depending on the nature of the spending areas in the budget, there will be pre-existing legislative authority to spend. As well, Bill C-15 was tabled in the House. Although I have gone through a good part of those 608 pages, I have not gone through everything, so there may be statutory authorities for spending packed within Bill C-15 as well.
Senator Marshall: Have you seen anything so far in your review that would be considered statutory spending?
Mr. Jacques: To the best of my knowledge, not yet. But we will go back to the office and dig deeper, senator.
Senator Marshall: Thank you. My second question is on professional services: In the past, a number of your reports on estimates documents have indicated the increasing spending track for professional services, and there is nothing in this report. I took a look at what has been approved so far this year compared to what was approved last year. I was also looking at expenditures by year. Can you offer any opinion or any information on the spending track for professional services? Even though there had been some focus on trying to reduce those expenditures, it looks to me like there is nothing there yet that would indicate they are being successful. I am wondering if you looked at it and whether our numbers agree or disagree.
Mr. Jacques: I think in aggregate, we would certainly agree with you. Something else that I jumped to in the public accounts — and, actually, the detailed online information — was the component of professional services that relates to management consulting. That was an area where there was a substantial decline reported in the public accounts in comparison to the previous year. Certainly, it was a decline which I don’t expect would have happened if not for some sort of effort on the part of the government.
Senator Marshall: Thank you. My last question is on contingent liabilities: Right now, we know what the net increase or decrease is for contingent liabilities from year to year, but is there any information that would indicate how much the decrease was, which means that those contingent liabilities have been paid out or they have disappeared for some reason, and what new ones were added? I noticed there was a section in your report on the Supplementary Estimates (B) which carved out and indicated how much there was for claims and settlements. You did mention contingent liabilities. I got the net amount, but is there a way to break that out between the increase over the years versus the decrease over the years?
Mr. Jacques: The short answer is no. The longer answer is: It is something we’re very aware of. We have reached out to the government at various points in the past to request those official gross flows. Because, of course, the net amount is useful. What’s more useful is figuring out what has been settled and what is newly recognized by the government. It continues to be a work-in-progress. Given the government’s announcement in their December 2024 Fall Economic Statement about a working group of experts on contingent liabilities, we were optimistic that the government would have addressed this issue. To the best of our knowledge, very little work has been done on that front.
Senator Marshall: So we’re twiddling our thumbs.
Mr. Jacques: Well, hope springs eternal because contingent liabilities are certainly not going away. They are many billions of dollars, and as we’ve seen in various budgets over the past 10 years, they can certainly swing the deficit figures substantially in one direction or the other.
Senator Marshall: Thank you.
[Translation]
Senator Forest: Thank you for your presence, which is always greatly appreciated.
In your 2025 budget analysis, you reiterate that the government’s definition of capital investments is too broad. In fact, your more restrictive definition leads you to conclude that 30% of capital expenditures are, in fact, operating expenditures.
Can you explain why program spending, such as tax expenditures related to corporate income tax, investment tax credits and subsidies, should not be funded as capital expenditures, as the government claims?
Caroline Nicol, Advisor-Analyst, Office of the Parliamentary Budget Officer: I would be happy to answer that question.
Here are two issues we flagged regarding this overly broad definition. Chiefly, for these categories, such as tax credits and operating subsidies — unlike transactions such as depreciation expenses or capital transfers — these measures do not have a one-to-one impact on capital stock creation.
Much more is said about measures that encourage investment, where the link between a dollar of government spending and the impact it will have later on the country’s capital stock is more subjective. The same subjectivity appears in another aspect, where these concepts are not based on well-established accounting systems or definitions. Which transactions will be included in this section? It’s not very clear. To a certain extent, it is subject to the government’s current opinion.
Senator Forest: Along the same lines, transfers to First Nations have increased significantly in recent years to address injustices and settle land claims to compensate individuals or communities that suffered those injustices.
Do you think some of those payments could be accounted for as capital expenditures?
Ms. Nicol: At first glance, that might not necessarily be the case. The fact that you’re asking the question shows that it would be important to have greater clarity around the criteria that the government will use when categorizing such measures. I would like to draw your attention to one of our report’s recommendations, which states that, due to this subjectivity, we recommend that an external party be responsible for categorizing, or determining which measures and transactions will be recognized as capital investments.
Senator Forest: Couldn’t your office perform the analyses that would allow for proper categorization and a clear definition of capital expenditures in all cases?
Mr. Jacques: We have the required capacity, but at the same time, it is not up to us to accept that responsibility if the Government of Canada has not proposed that we be given that role.
Senator Forest: I understand that this is not within your mandate. However, given the importance of the current shift to capitalization measures as opposed to operating and capitalization accounting, don’t you think this is an area where your expertise could be put to good use?
Mr. Jacques: As Ms. Nicol mentioned earlier, it is important to separate the people who are responsible for preparing the budget and assessing the budget results from the people who are responsible for defining capital. In the past, we saw that with the old budget costs, the Government of Canada lowered the definitions of GDP, for example, based on Statistics Canada’s definitions, and the definitions of debt based on accounting group definitions, but in both situations, it was done externally. It is indeed good practice to keep responsibilities separate.
Senator Forest: Thank you.
[English]
Senator Cardozo: I have questions on three different issues. One is with regard to health. What we have got there is, as you mentioned, a significant amount of $1.6 billion for dental care. Are you in a position to provide any more detail on what that is? Also, I don’t see pharmacare on there. Should it be there?
Govindadeva Bernier, Director, Budgetary Analysis, Office of the Parliamentary Budget Officer: For the first part on dental care, they had underestimated, I think, the uptake of dental care services because eligibility was expanded in 2025 to basically all adults. Previously, the program was phased in, starting with only seniors and kids and then eventually all adults.
It is not directly in the Main Estimates, but if you backtrack and subtract some other amounts, we estimate there was about $3.1 billion or $3.2 billion for the dental care program in the Main Estimates. Now they are requesting $1.6 billion more, which would put the total at almost $4.8 billion for this fiscal year. What the Treasury Board of Canada Secretariat told us — and we actually asked Health Canada about it — was that it was an underestimation of the uptake, but they don’t expect this to be ongoing because a lot of these interventions were one-time things. Maybe you had some issues and you had been waiting for a while to get your teeth fixed because you didn’t have the money and now you are eligible, so you get it all fixed when you are eligible, but you may not have any more claims for the next few years. They think it will be a one-time thing this year and next year.
Senator Cardozo: So they expect it to go down?
Mr. Bernier: They expect it to go back down in about two years.
Senator Cardozo: And what about pharmacare? Shouldn’t that be somewhere? Do the Main Estimates cover it sufficiently?
Mr. Jacques: You are correct. Typically, the government will have four estimates over the course of the year, and the vast majority of the money shows up within the Main Estimates linked to Appropriation Bill No. 1 and Appropriation Bill No. 2. This year, it’s linked to the special warrants as well. In addition, going back to a point made earlier, there are also statutory authorities. I’m not sure with respect to the pharmacare agreements whether they come through the Main Estimates or statutory authorities. I understand the Treasury Board of Canada Secretariat will be here for an hour after us, and they will probably answer this question, but I will go back to the office and find the answer because now I am curious myself.
Mark Mahabir, Director General, Costing and Budgetary Analysis, and General Counsel, Office of the Parliamentary Budget Officer: For pharmacare, it is an envelope for the year, so that’s why there’s nothing in the supplementary estimates. Everything will be in the Main Estimates.
Senator Cardozo: I notice under Housing, Infrastructure and Communities Canada, there is a small amount of $12 million, but for the Canada Mortgage and Housing Corporation, there is a significant amount for co-op housing, which I am pleased to see because that’s a significant part of affordable housing. Do you have any thoughts about the National Housing Strategy that’s set to expire in about two years from now? It was a 10-year program announced in 2017.
Mr. Jacques: We do, and we’re currently finalizing a piece of analysis that was actually initiated or encouraged by this committee several months ago around Build Canada Homes, and we anticipate that analysis should be published next week. It will touch on the National Housing Strategy and the pending expiry, and it will look specifically at the incremental nature: how much money is currently planned on being spent, what is going to come to an end and how much additional money has been announced.
Senator Cardozo: And this is your analysis?
Mr. Jacques: It’s our analysis based on the data that has been shared with us by the government.
Senator Cardozo: I will be looking forward to that.
I see the Canadian Space Agency has over $528 million from the Department of National Defence. What is that?
Mr. Bernier: It mentions that it is a transfer to fund research and development projects, and everything is part of the Canadian Space Agency and European Space Agency partnership, because we have a partnership with —
Senator Cardozo: For satellites?
Mr. Bernier: We don’t have that detail. We could ask for more information.
Senator Cardozo: Thank you.
Senator Ross: Good morning. Thanks for being here today. I have a question related to a letter that you provided to the Senate on November 18 to our Speaker. That letter was tabled. It suggested you were having difficulty getting some of the information that you wanted in order to prepare information for parliamentarians. What would you say is the next step that the Senate or the Speaker of the Senate should take in regard to this letter that you have sent?
Mr. Mahabir: Thank you for the question. That’s a good question, actually. We are unsure on the next steps because this is the first time we’ve actually submitted a notification to the Speaker.
I did have a discussion with the Speaker’s office before that submission. They were unclear on the next step as well. We’re waiting to hear back either from a senator or from the Speaker herself.
Senator Ross: Thank you. Given you’ve not been able to get all the information you were looking for, that means we might not get all that information as well.
If you were sitting on the National Finance Committee, what would you ask of the departments? What do you think we should be asking given you’ve not been able to get that information?
Mr. Jacques: The information we would suggest you ask for is the information we initially requested from the government.
As you are aware, in Budget 2025, a key part of it is a plan for $60 billion worth of cuts over a five-year period, including the reduction of 40,000 federal public servants.
What we were looking for is basic information that, according to the Organisation for Economic Co-operation and Development and the International Monetary Fund, is necessary to assess whether these cuts are feasible and if the government will be able to generate the savings that are anticipated.
Most of these cuts end up being on the operating side. Balancing the operating budget is one of the government’s key fiscal anchors. In order to assess whether it is feasible and if the savings are going to be achieved, one needs and should know the cuts by program.
In the case of the Canadian Food Inspection Agency, there are details with respect to a 15% cut. Within the annex of the budget, there is a narrative around what those cuts look like but no delineation by program, no delineation of how many FTEs will be pulled out of each program and no delineation of how much money across each and every one of those programs, nor is there an indication of the potential service-level impacts or mitigation strategies by the government.
From our perspective, we can accept it is a forecast. The numbers might not have been finalized. At the same time, the entire budget is a forecast. When there is something that is so integral to the government’s ability to respect its fiscal anchors — which is a key and central part of the budget and the government’s economic and fiscal strategy — it is the type of thing that should be provided to parliamentarians when they are voting on the budget.
Senator Ross: Changing gears, with regard to defence, we have NATO’s 2% target this year and the 5% target for 2035. That’s our pledge to the NATO defence investment. I noticed in your report, you talk about the $529 million transferred to the Canadian Space Agency for defence research and development, and this would not further contribute to defence spending targets.
Based on the trajectory you are seeing in these supplementary estimates — and other documents you are working with — do you foresee us meeting those targets?
Mr. Jacques: In terms of NATO’s 2% target, it will be close for this year. Internally, based upon the numbers we have generated and our previous Economic and Fiscal Outlook tabled in September, we are going to be close to the 2% target. It is going to be a rounding difference potentially.
In terms of the 5% target, it is unclear at this point. Immediately following the budget, we sent an information request to the Department of National Defence because it is unclear to us how much of the $80 billion announced in Budget 2025 is new and how much is incremental. At this point, there is not a clear path in getting to the 5% target. It seems to be a work-in-progress.
[Translation]
Senator Gignac: Welcome to the witnesses. I would like to pursue the conversation you had with Senator Cardozo about the cost of dental care. In June 2023, you conducted your study on the $10 billion cost over five years associated with this new program, including $2.8 billion for the current fiscal year. I just heard you mention a cost of $4.8 billion associated with this program for the current fiscal year. Are we heading toward a cost of $15 billion to $17 billion? That is a 70% increase in dental services for the fiscal year compared to what your office estimated two and a half years ago, after all. Do you intend to update your review? It should be noted that this is one of the social programs that will become the most significant within the federal government in terms of associated costs.
Mr. Bernier: In terms of our cost estimates, there was a misalignment with the timeline, because we anticipated slightly higher costs last year than what was actually spent. I don’t recall the exact cost, but the figure was overestimated by approximately $1.2 billion. This year, we are slightly below that amount. They’re asking for $1.6 billion in the supplementary estimates, but it’s not certain that all that money will be spent by the end of the fiscal year. At worst, we’re looking at $4.8 billion. This year, we underestimated it by nearly $2 billion. We are still a little below that, if we take into account our overestimation last year. Health Canada does not expect this to remain at such a high level. They are still forecasting slightly higher spending next year, but after that, it will come back down. I will let Mr. Jacques speak to our updated analysis.
Mr. Jacques: We try to update our analysis every six months, because it’s important to include data and provide an accurate analysis with our financial forecasts for the next five years, especially in the case of this type of program.
Senator Gignac: That would be very helpful, because in Quebec, we have this dental care plan, and we know that there are often significant discrepancies between actual costs and what was initially anticipated. The federal government has also made a commitment in this area. We are counting on you to enlighten us. It is difficult to obtain accurate figures and clear information from Health Canada.
[English]
Shifting topics, going back to the capital investment discussion, they have two buckets: capital investment and operating spending. I tried to see the consistency approach of the government. When we talk about credits for research and development, or R&D, for companies, it is in the capital investment bucket. When we talk about —
[Translation]
— programs for Canada’s granting councils —
[English]
— which is for research and development, it is in the operating bucket. Is it consistent? How do you feel about that?
Ms. Nicol: For us, the line where we split things is not necessarily program by program; it is more the fact that there are types of transactions that have a one-for-one impact on the capital stock. For example, when the government purchases assets, it is clear that’s an increase directly in the capital stock of the country.
For us, the other types of transactions which are clearly capital investments are capital transfers — a situation where the federal government, for example, transfers money to a third party with a strong binding contract or agreement where the other party has to spend on a specific asset. Those are the kinds of transactions for which we think it is clear those are capital investments.
For all those other categories that the government decided to include which — in their words — incentivizes or encourages investment, I think that’s the universe where it is hard to define whether it fits in their definition and what the impact will be on the capital stock.
In terms of tax credits for R&D or other programs for R&D, that’s where the subjectivity and the confusion lies: How will the government decide and who will decide whether that’s a capital investment or not?
We are in a situation where it is difficult for us to say “yes” or “no” to a specific measure and whether to include it because we don’t have a clear framework to lean on at the moment, whereas for the two types of transactions I mentioned previously, we have the public accounts that have clear definitions, and we have the system of the national accounts which have clear definitions where Statistics Canada already categorizes things according to that framework.
It is naturally hard for me to answer that question.
Senator Gignac: I understand. The only fiscal anchor we have now is the fact that it will balance the operating spending. However, the definition of operating spending is linked to the definition of capital investment. The more capital investment we have, the easier it would be to balance the books two years from now. You mentioned the criteria for the definition is not evident. Thank you for that.
[Translation]
Senator Dalphond: Welcome again. To continue on the subject of capital spending, when the program is very tight and there is a very clear contract with the province, we will accept that it is a capital expenditure because we can see that, in the end, it will be used for construction, a road, or a building.
For example, on housing, the federal government transfers money, particularly to Quebec, after lengthy negotiations. Sometimes, the last payment to arrive is the one for Quebec, because it took so long to negotiate.
Is there a danger that capital expenditures will be counted twice, i.e., once by the federal government, which considers that it’s making an investment because there are contracts and all sorts of things, and once by the province, which considers that it has carried out construction projects with the Société d’habitation du Québec?
Ms. Nicol: I think that categorization would be done by Statistics Canada, which tracks such transactions.
First, it will be a capital transfer from the federal government to the provincial government. Then, it will be an investment expenditure by the provincial government.
In the current situation, we already have a good capacity to track these transactions. The idea would really be to go from the starting point to the end point, when the federal government’s dollar becomes a dollar on the provincial government’s balance sheet, for example.
Senator Dalphond: Would the UK’s practices be followed in doing so? Because now that devolution has taken place in Scotland, Northern Ireland and Wales, there are programs in which money is transferred, I presume. In the end, when we look at Dominion Bond Rating Service, or DBRS, or other firms that assess the country’s financial situation, are they able to understand easily, or do they have to check what Statistics Canada says to understand what the federal government is saying?
Ms. Nicol: We have had discussions about that with our counterpart in the United Kingdom, the Office for Budget Responsibility. They confirmed that what they include in their capital budget is essentially defined by their statistics agency, where a capital transfer to another level of government would be included. One example might be a municipality.
Senator Dalphond: Thank you.
[English]
Senator MacAdam: I’ll follow up on the discussion we had on capital investment versus operating spending. Do you know how the government plans to report on the actual revenues and expenditures in the day-to-day operating account? In other words, how well are they doing in reaching their fiscal target? Will updates be provided? Do you have any information on that?
Ms. Nicol: The information we have is the presentation we saw in Budget 2025. There was a fair amount of detail about the different categories and amounts, such as which measures work under capital investment partially or completely. They also provided historical information about measures from the past and spending from the past, according to their definition of how they would categorize it.
In terms of achieving that fiscal anchor, their medium-term projections do show that within five years, they will be in a surplus in their operating budget, which is the way they define it. I will point to Table 4 in our issues note report where we mention that if we compare to the fiscal situation from a year ago, as well as everything that was announced between the Fall Economic Statement and Budget 2024, most of the spending that was done would fit under the operating bucket. Previously, according to the definition, there was already a situation where we were in a surplus for that definition.
Senator MacAdam: What I’m hearing around the table too is this could cause a lot of confusion for Canadians in terms of using the Public Sector Accounting Board standards for the public accounts and then using a separate operating account. More to come on that, I guess, in the future.
My next question is with regard to the new budget cycle. Under that new budget cycle, we would have the budget in the fall before the new year starts, correct? Technically then, we should have 2026-27 now, which we don’t have. Do you know how the government plans to transition into this new cycle? How will they get on track?
Mr. Jacques: I believe from the government’s perspective, they are on track. The reset is happening with Budget 2025.
Senator MacAdam: It’s fully transitioned?
Mr. Jacques: It continues to be a work-in-progress because Budget 2025 is the first initiation point. Then, obviously, there are other related documents that need to roll out on the new cycle. Everyone will likely need to wait a full year to see exactly how things roll out. I think, as everyone knows, it could potentially look good on paper and make sense in theory, but when it hits reality, potentially things need to change and adjust.
Senator MacAdam: Thank you.
Senator Kingston: Welcome, everyone. I want to clarify with regard to the Canadian Dental Care Plan and the reference made to pharmacare. I understand what you said, and I also understand when you said that some of the questions we ask are better asked to the Treasury Board.
However, I want to clarify that there is a difference between pharmacare and dental care. Pharmacare is negotiated with each province, and there are particular things that are negotiated. It’s kind of in a little box at the present time. However, dental care seems to be more something that’s between dentists, patients and the federal government. Am I correct in saying that?
Mr. Mahabir: Yes, dental care is more of a claims-based system, and pharmacare is more of an envelope, agreements-based system.
Senator Kingston: Okay. Going on from there, you say that you anticipate that things will settle down because more people were added to the eligibility list. Is there any thought of the future and what that will hold? Is dental care kind of in a box as well, although a bigger box? Is it “You’re eligible for this but not for that” in terms of dental care? Has any thought been given to the program as a whole and what it covers now and possibly what it should cover?
I’m thinking in terms of the effects that good dental health has on other things, like heart health and so on. Is the Canadian Dental Care Plan, as it exists, good enough to stay that way for the foreseeable future, or does it need to be expanded somehow now that we’ve had some experience with what the outcomes might be for patients, which are better than they were before?
Mr. Jacques: It’s a good question and one that lies outside of the mandate of our organization to answer. We don’t touch on policy.
Senator Kingston: Okay. I have another question to do with the Emergency Management Assistance Program, and you talk about the fact that these supplementary estimates have more money requested in terms of response and recovery. When you look at what the program should be doing, the first thing is preparedness; the second thing is mitigation.
Is this extra money because there were more wildfires, et cetera, this summer? Or are we taking away from preparedness and mitigation to try to cover the increase in the need for response and recovery?
Mr. Bernier: That’s a good question. I can’t say specifically if we shifted from more preparedness to instead paying for recovery. But, indeed, the government has an analysis where they show that the number of wildfires and the number of floods have significantly increased over the last 10 years. I think that explains in part why the program costs have increased so much and why they were requesting more money in the supplementary estimates.
But we didn’t look into whether they were still spending as much on mitigation and preparedness. Sorry, I don’t know for that part.
Senator Kingston: For spending on personnel, you’re saying that there is more money being spent in 2025-26 with fewer full‑time employees, so my question is: As the number decreases, are some of those increased expenses tied to, say, the extra expense for the retirement years for a person, given that person is then not going to be replaced? Are there extra expenses when you’re retiring people out?
I know there is a different bucket once you are retired, but I’m just wondering: Are there increased expenses in having people transition to retirement as part of having the number of employees decrease?
Mr. Jacques: Thanks for the question. The short answer is yes. The government used to have a retirement benefit. Based upon the number of years that you had worked in the federal public service, there would be a one-time payout when people retired. That was eliminated, I believe, in 2012, so people were no longer accruing benefits. But there are still benefits. When people retire, you still have those payouts. To your point, within the estimates, the way the numbers are categorized, it would show up under personnel spending. That’s definitely a possibility.
I would say the trends we have seen with respect to the overall personnel composition is we have seen a fairly substantial reduction in the number of people who are term employees as well as students, so it’s less on the retirement side. But that said, it will definitely be something to look at on a go-forward basis as part of the Comprehensive Expenditure Review, especially with the retirement incentives being offered by the government.
[Translation]
Senator Hébert: Good morning. My question is about funding for public service insurance plans and programs.
The document that was tabled shows an increase of nearly $600 million. It says that the change in costs is mainly due to inflation and a growing number of participants. I know that the issue of changes in this type of cost is a concern for many organizations, both public and private, and many have taken steps to optimize the administration of this type of plan.
Can you tell us if you looked at the trajectory of these costs for the federal government over the years, and if there is any deviation from this trajectory in other administrations? This is along the same lines as the question just asked by my colleague.
Mr. Bernier: I don’t know if the trajectories were analyzed. However, specifically with regard to what is requested in Supplementary Estimates (B), we discussed that with the Treasury Board Secretariat, and they explained that this was standard practice for them. Every fall, they reassess. They prepare an estimate at the beginning of the year based on the number of employees in the public service, and then again in the fall, because there is some staff turnover. Even if the number of full-time equivalents did not change in a given year, there is turnover and new people will be entering the public service. So they always produce a new estimate in the fall to see how much they expect to pay in the end.
So they explained why it is common practice to request additional funds in the Supplementary Estimates (B). I don’t know about the trends, however.
Mr. Jacques: We didn’t compare the federal government with the other provinces. That’s a good question — if your committee is interested, it would be interesting for us to assess that.
Senator Hébert: As I said earlier, this is quite an important issue. These costs have increased significantly and are a concern for many organizations. I think it would be interesting, at the very least, to see how things have evolved, and in terms of workforce trends, to see how we rank on this trajectory in comparative terms.
Mr. Jacques: I think I should mention that in Budget 2025, the government announced that there will be an effort to make public service compensation more competitive and better aligned with the private sector. I think this is something to which the government itself has access.
Senator Hébert: We are talking about total compensation packages, not just salaries, is that right?
The Chair: I would also like to talk about the $600 million, which is the expenditure to fund the Interim Federal Health Program for people with refugee and asylum seeker status. We’re talking about $598 million, which is a supplementary amount. When we talk about supplementary budgets, we assume there was an amount previously allocated for interim care.
Do you have the total cost of funding the Interim Federal Health Program for people with refugee status, and for the entire budget?
Mr. Bernier: We don’t have those figures with us at present; we haven’t looked into that particular issue, but it’s something we’ll likely be looking at in the near future.
Mr. Jacques: We’ve already received a request from the House of Commons Standing Committee on Health regarding those costs, and we’re in the process of preparing an estimate for the next five years. I believe there was a request for information last week, which we forwarded to the department for further details. Once we have the details and the forecasting results, we will be honoured to share them with you.
The Chair: Thank you, I would appreciate that. At the same time, how long does the interim period last? I imagine it’s until the provincial health care systems take over. This may also give us an idea of what the program costs the provincial health care systems. Is that okay with you?
Mr. Jacques: Yes.
The Chair: Thank you. That was my question.
I may have another very quick one. I’m straying a little from the supplementary estimates. I started looking at the budget, as many of us did, and I took a close look at the super-deduction and the things it covers, including manufacturing and processing equipment, which will have a 100% deduction.
I looked into where this kind of equipment comes from. The vast majority of it seems to come from the United States, so it’s imported equipment. My conclusion is that this will help the Americans a lot, at least in the short term, because it will encourage the purchase of American equipment. The deduction wasn’t adjusted.
Do you have figures on imports in this category or on Canada’s trade deficit in this specific category of production equipment?
According to Statistics Canada, there is definitely a three‑to‑one trade deficit. We import three times more from the United States than we export there, but I don’t have the exact figures. Do you have anything on that?
Ms. Nicol: Thank you for the question. It may not be for that exact category, but for the next level up.
The Chair: You skip categories because there are several under the super-deductions.
Ms. Nicol: What we usually do is look at the proportion of investments for certain categories that are imported, not necessarily from the United States. We know that, historically, for machinery and equipment, we generally import more than 80%. We don’t have the exact proportion for the United States, but it’s true that Canada imports a large amount of machinery and equipment.
The Chair: Would it be possible to verify this? I’m sure you’ll be back when we study the budget, and I would like more details about these categories, about imports, how much we import, and the country of origin for each of the super-deduction categories.
Ms. Nicol: I think there should be a way to get an estimate.
The Chair: Thank you. I’ll ask you that question again when you come back for the budget study. Thank you.
[English]
Senator Marshall: Thank you very much. Just to continue with contingent liabilities, you mentioned in your report on page 6 that the claims total $944 million in Crown-Indigenous Relations and Northern Affairs Canada, or CIRNAC. Were all those set up as a liability at the end of March 2025? Are you able to tell me that? Were they all set up as a liability?
Mr. Jacques: We are not able to tell you whether they were accrued as a liability. We don’t have that level of detail.
Senator Marshall: You don’t have that information?
Mr. Jacques: No, we do not have access to the specific information. We have attempted to obtain it from the government in the past. It has been explained to us that it is covered under solicitor-client privilege.
Senator Marshall: There was a decrease from 2024 to 2025. So you don’t know if there were new liabilities set up and some fell off? You can’t tell us that?
Mr. Jacques: I think in aggregate, we can say that there are gross flows that occur in terms of the contingent liability that sits on the government’s balance sheet. We don’t have insight into which specific adjustments are happening around those contingent liabilities.
Senator Marshall: I have one last question on that. When a new liability is set up, where is the expenditure charge? Is it charged to that accrual account, or does it go against the department, like CIRNAC?
Mr. Jacques: I think it depends. Typically, it would end up showing up as an operating expense within the department.
Senator Marshall: Is there the possibility it’s in that accrual adjustment? Or no?
Mr. Jacques: There are also situations depending on the nature and the size of the contingent liability being provisioned. Some of them are done centrally, especially in situations where it’s a fairly large settlement and it’s for a relatively small department, so the Treasury Board of Canada Secretariat and Justice Canada would want to be more directly involved in those situations.
Senator Marshall: Thank you very much.
[Translation]
Senator Gignac: Let’s talk more about the dental care plan, which is a major concern for me. In your summer 2023 study, you estimated that this program would cost $10 billion over five years. You estimated that administrative costs would be around 2%, or $268 million. What’s your reaction to the fact that, in the public accounts that were just published, the cost of dental care for the last fiscal year was nearly $2 billion? This year, you’re saying it’s $4.8 billion, and last year it was $2 billion. There are only two categories: dental benefits and operations, which amount to $1.6 billion, and administration, which amounts to over $300 million.
Basically, the administrative costs of this program appear to be 15% instead of 2%. Do you intend to look into this more closely? I’m worried this program will end up costing much more than expected. The federal government doesn’t have a very good reputation when it comes to the day-to-day management of programs, and it has to verify all the claims it receives from dentists. It takes an army of public servants to analyze all that.
Mr. Bernier: Yes, administrative costs were particularly high during the fiscal year ending March 31, 2025, at around 15% or 16%. Once again, to date, the Main Estimates and supplementary estimates do not allow us to identify administrative expenses. However, the office ran some numbers, and it seems to be around 7% for the current fiscal year, which is much lower. I don’t know why the costs were so high last year, but 7% is still higher than 2%, of course. We will have to look into that.
Also, getting back to the question that was asked earlier, one of the reasons why expenditures were underestimated both in our analysis and by Treasury Board is that, in assessing demand, everyone was relying on very old data. There is no recent survey of the population’s dental care needs. Statistics Canada had a study that ended about ten years ago, but the population has grown since then, and immigration targets have changed in recent years. In the future, new demographic forecasts may have an impact on program costs, so we will have to take these parameters into consideration.
Senator Gignac: Can we request an update on the study? We need to be well informed if we’re going to dig through the public accounts and find the information; I am referring to last year’s public accounts, in which administrative costs were 15%. When we try to get answers, we rely on you, Parliamentary Budget Officer, to enlighten us, because we’re worried this program could get out of control.
The Chair: It is not normal for the percentage to be higher, because implementation is just beginning and the benefits are lower. The program is just starting, so the percentage related to administration is automatically higher. That may be part of the explanation, but there’s probably more to it than that. I am not necessarily one to defend the government, but that’s what it looks like. Someone will write that down somewhere. Thank you.
Senator Dalphond: Senator Cardozo asked a question about transfers to the Canadian Space Agency. In your analysis, this involves a transfer from the Department of National Defence. Is this related to the golden dome that is supposed to be built in space?
Mr. Bernier: We can ask for more information about that, but I don’t have that information at this time.
Senator Dalphond: Regarding the dental care program, I would assume that many people apply in the first year and have to wait for years. I would also assume that, eventually, the program would be covering more regular dental needs instead of people who have had problems for years because they couldn’t afford to go to the dentist. Might we be seeing a high number of applications at the beginning of the program that will taper off as time goes by?
Mr. Bernier: Basically, costs will probably go up as the population grows.
Senator Dalphond: Thank you very much.
The Chair: We only have two minutes. Do any other senators want to ask a second question?
Senator Forest: This may be a tangential question. According to your office’s budget stress test, your government had only a 7.5% chance of achieving its deficit-to-GDP reduction target. How did you design that stress test?
Mr. Jacques: It’s based on a framework published by the IMF. It involves an assessment of every economic shock that has occurred over the past 30 years, an assessment of the impact on the deficit for the Government of Canada, and the response to previous shocks.
Senator Forest: Thank you.
The Chair: Thank you very much. It’s very interesting, as usual. We wish you a good day, and I’m sure we’ll see each other again in the coming days for our study of the budget. We will now suspend the meeting to switch to the next group.
We will now continue with this morning’s meetings. We are pleased to welcome representatives from the Treasury Board of Canada Secretariat: Antoine Brunelle-Côté, Assistant Secretary, Expenditure Management Sector; Karine Paré, Executive Director, Expenditure Management Sector; Andres Velez-Guerra, Executive Director, Results Division, Expenditure Management Sector; and Emilio Franco, Executive Director, Investment Management Sector, Office of the Comptroller General, all of whom will be available to answer our questions.
We also have, again from the Treasury Board of Canada Secretariat, Blair Kennedy, Executive Director, Government Accounting, Policy and Reporting; Annie Boyer, Assistant Secretary and Chief Financial Officer; and Vidya ShankarNarayan, Senior Assistant Deputy Minister, People and Culture, Office of the Chief Human Resources Officer.
We will now hear opening statements from Mr. Brunelle-Côté, followed by a question period.
Antoine Brunelle-Côté, Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat: Thank you, Mr. Chair. First, I would like to note that the land on which we are gathered is the traditional, unceded territory of the Algonquin Anishinaabe people.
The chair has already made the introductions. We have a good team here to answer all your questions. I’m pleased to be here today to talk to you about the Supplementary Estimates (B) for 2025-26, the second of three supplementary estimates planned for the 2025-26 fiscal year.
As members of the Senate know, supplementary estimates present information on spending requirements that were not sufficiently developed in time for inclusion in the Main Estimates or were subsequently refined to account for developments in particular programs and services.
The Supplementary Estimates (B) provide for additional budgetary authorities of $10.7 billion, which reflects $10.8 billion to be voted by Parliament and a $112.9 million decrease in forecast statutory expenditures. The expenditures are distributed among 76 organizations. Now that federal budgets are being presented in the fall, no funding for new initiatives under the 2025 budget is included in this budget. In fact, the larger line items all relate to existing programs.
[English]
The largest item at $1.6 billion in these supplementary estimates is additional funding for the Canadian Dental Care Plan.
Moving to defence, the Government of Canada has committed to achieving NATO’s 2% target this year and further accelerating investments in years to follow.
The Supplementary Estimates (B) present an additional $1.1 billion in planned spending for the Department of National Defence, bringing the department’s total estimates for 2025-26 to $46.7 billion, which is an increase of 35% from 2024-25.
On another topic, I’d like to highlight $705.9 million for the Department of Indigenous Services for emergency management in First Nations communities.
Over the past five years, we have seen major flooding and unprecedented wildfire seasons. This funding will be used to reimburse First Nations communities, municipalities, provinces, territories and non-governmental emergency service providers for costs incurred during response and ongoing recovery activities on reserves across Canada.
[Translation]
I would also like to take a moment to talk about the funding in the Supplementary Estimates (B) for the Treasury Board Secretariat.
As the employer of the public service, two major personnel-related items fall under the Treasury Board Secretariat, including $595.9 million for public service insurance plans, including health and dental. This funding responds to cost increases driven by price inflation and growth in the number of plan members.
There is also $315 million in transfers to departments and agencies for salary adjustments for the impact of collective agreements and other adjustments to terms and conditions of employment.
Finally, I would like to draw your attention to an increase in non-budgetary expenditures for financial assistance to Ukraine.
Mr. Chair, that concludes my presentation. I would like to thank the committee for inviting us here today. We are ready to answer any questions you may have.
The Chair: Thank you very much.
[English]
Senator Marshall: My first question relates to the document itself. I was looking for the table that compares the budget to the estimates to date. You were providing that table for a number of years, but it is not in the current document. What happened to it?
Mr. Brunelle-Côté: It is because usually there is a budget at the beginning of the year. This year, we didn’t have the budget, so we had nothing to reconcile.
Senator Marshall: We have the budget now.
Mr. Brunelle-Côté: Yes, but not at the time when we prepared the estimates. You can expect this table will be there next time when we present the Main Estimates. When we have reconciled with the budget, that table will be there.
Senator Marshall: The time frame wasn’t sufficient. Okay. Is there any way of getting that? Can you prepare it when we come back? I use that extensively. Or is that something like, “You’re not getting it this year,” and that’s it?
Karine Paré, Executive Director, Expenditure Management Sector, Treasury Board of Canada Secretariat: If I can add, no, it is because the budget was announced in November. Departments have to do their implementation plan, then come to the Treasury Board to access funding and then it is included in the estimates. At this point in the Supplementary Estimates (B), there were no new items from the budget.
For the Supplementary Estimates (C), we may have some depending on the maturity and if there was funding announced for this fiscal year, but the bulk of it will be in the Main Estimates.
Senator Marshall: My next question relates to the public service insurance of $595 million. Can you give us more information? In your opening remarks, you said it was for health and dental care. Is that what it is? It works out to about $14,000 per employee. Am I on the right track here?
Mr. Brunelle-Côté: It is for all insurance provided to public civil servants. It is for everything. It includes dental care benefits as well as disability and life insurance for active and retired employees and their dependents.
Senator Marshall: Do you have that broken down by program? Are you able to break it out: health, dental care and insurance?
Mr. Brunelle-Côté: I don’t have the breakdown in front of me. I assume, yes, that’s something we could do.
Senator Marshall: Could you provide that to the clerk?
Mr. Brunelle-Côté: Yes.
Senator Marshall: That would be helpful.
Can you confirm or clarify how much that works out to per person? In your opening remarks, you make reference to the fact that there was an increase in employees. I thought employees were decreasing. I was doing a rough calculation of 350,000 employees. Is it just the core public service?
Mr. Brunelle-Côté: That’s just the core public service.
Senator Marshall: Yes, I worked it out. I thought it came out to about $14,000 per employee. Would I be on the right track there? Can somebody confirm or tell me if my calculator is wrong?
Vidya ShankarNarayan, Senior Assistant Deputy Minister, People and Culture, Office of the Chief Human Resources Officer, Treasury Board of Canada Secretariat: We will get back to you on the exact amount. At this point, yes, the public service has reduced in size from what it was in 2023-24. Your specific question is: What is the amount per employee in the core public administration?
Senator Marshall: The average, yes.
Ms. ShankarNarayan: The average.
Senator Marshall: Yes, it looks to be $14,000. I am wondering if that’s right.
Ms. ShankarNarayan: We need to confirm that. We will provide that information.
Senator Marshall: Thank you.
[Translation]
Senator Forest: Thank you for being here today. According to the Parliamentary Budget Officer’s report, the cost of the public service per employee and full-time equivalent is increasing, while the size of the public service has declined, down approximately 12,000 FTEs since 2024-25. I realize that the terms of the temporary and voluntary early retirement incentive program, which will further reduce the size of the public service, are still being discussed, but if the age of eligibility for retirement without penalty is lowered to 50, does that not risk destabilizing organizations that are already fragile or that are struggling to carry out their mandate? Several organizations come to mind, but I will not name them.
Ms. ShankarNarayan: Hello. Yes, there was an announcement about that program in the 2025 budget. The criteria are in development. We hope to receive approval for our criteria in January so that the program can be officially launched.
To answer your question more specifically —
[English]
— there are two groups. Group 1 includes employees — and they all fall under the Public Service Superannuation Act — who started before December 31, 2012, and are 50 years old and above with some other criteria; if approved, they would be eligible. Group 2 includes employees who started after January 1, 2013, and are 55 years old and above; they would be eligible.
To your specific question, as we are developing the criteria, we are focusing on business continuity and essential services. If approved, being eligible will not be the only criteria. We will be adding criteria specific to the needs of every department and agency for essential services as well as business continuity. The Treasury Board will provide this criteria to all departments and agencies who are part of the program.
[Translation]
Senator Forest: When nurses in Quebec retired en masse, it was very painful. It took us a decade to recover, and we are still suffering the consequences.
When you say that criteria will have to be approved, do those criteria include measures to address the deleterious impact on organizations? Have you assessed the cost of this measure, and what assumptions about the number of people who will leave have you made in the policy you’ll be putting forward?
Ms. ShankarNarayan: First, we don’t have specifics about how many people will take advantage of this program. We expect to get approval in a few weeks, in mid-January.
[English]
With regard to the specific criteria, we want to reinforce that business continuity and essential services cannot be impacted. We can’t further disorient the public service with regard to losing key employees.
Specifically on the cost of the program, I do have the details. We anticipate the cost to be roughly $1.5 billion. Can I confirm over how many years? I know my colleagues know the cost. I will request them to discuss the cost factors here.
Ms. Paré: It is $1.5 billion over five years starting in 2025-26 while providing ongoing savings of $82 million annually.
[Translation]
Senator Forest: This will create two classes. If I’m an employee in a strategic position, then if everyone has the same rights and privileges, it will be difficult to prevent me from leaving. Otherwise, there will be distinct conditions for two distinct classes of employees within the organization.
Ms. ShankarNarayan: Thank you for your question. We’ll focus on criteria that will enable us to continue providing essential services. We’ll do our best to avoid certain problems, such as creating different classes of employees.
[English]
We will ensure that we communicate this transparently to all employees when or if the program is approved.
Senator Cardozo: Thank you for being here. I would like to pose some of the same questions I posed to the Parliamentary Budget Officer, or PBO, and move the discussion along a bit. The first is with regard to the Health Canada funding for the Canadian Dental Care Plan. You have a supplementary amount of $1.6 billion, which is quite a large amount. The Office of the Parliamentary Budget Officer suggested that this may be a temporary bump as more people who haven’t used dental care for a long time are now using the service. Is that your sense of why that is a considerably larger figure than you would have anticipated?
Mr. Brunelle-Côté: Thank you for the question. It is a good question. Yes, our feeling is that there was some pent-up demand in the system. It is the beginning of the program, and they will now benefit from the program for a long time. Perhaps they didn’t have dental services for a long time or ever. It is normal at the beginning of a program that the demand be higher, but Health Canada expects that the demand will go back to a more normal level in the future. That’s why there is more demand at the beginning of the program.
I would point out that the $1.6 billion in the estimates has been reprofiled. It is money moved from the last fiscal year to this fiscal year. It is not additional money that we’re providing. The authorization to spend the money has been moved from the last fiscal year to this fiscal year due to this increased demand.
Senator Cardozo: Do you think over time it will even out to the $10 billion that was anticipated for five years?
Mr. Brunelle-Côté: It is difficult to say. We can just say that demand in the early days of the program has been higher than what we first estimated.
Senator Cardozo: You don’t have a pharmacare figure here. Is that because, as I understand it, it’s a federal-provincial —
Mr. Brunelle-Côté: Pharmacare was in the Main Estimates. I also understand it is a statutory program, so it is in the Main Estimates as a statutory program.
Senator Cardozo: Okay. With regard to housing, you have $74 million for the Co-op Housing Development Program, and I indicated I support that because it does deal with affordable housing. I will also state for the record that I am a very strong supporter of dental care as well. We want to know what is spent, but it is an important program that the federal government must maintain.
With regard to housing, the National Housing Strategy figure will run out in a couple of years. Do you have plans? What is the process for renewing that program? I understand it was introduced in 2017 for 10 years. What do you do between now and the end of the 10 years, which is 2 years away, to renew that program?
Mr. Brunelle-Côté: This question would be better for Housing, Infrastructure and Communities Canada, but we can get back to you on this one.
Senator Cardozo: Generally speaking, in terms of the timeline, does the Treasury Board get involved when a program is set to sunset a couple of years away? Do you start talking to them?
Mr. Brunelle-Côté: No, we’re not directly involved. It is a decision between the minister and the Department of Finance. It’s a budgetary decision. The way it will work is if a program is sunsetting, the department will request a renewal of the sunsetting program to the Department of Finance, and it will be considered in the context of the budget.
Senator Cardozo: Okay. But you don’t get involved in terms of the Treasury Board at this stage?
Mr. Brunelle-Côté: We are at the back end of the process. Once the program has been approved and it is in the budget, then the program has to come to the Treasury Board for vetting and to discuss the details for implementation.
Senator Cardozo: Are you involved in evaluating the current program, which will become part of the mix of the discussion for the renewal, if there is a renewal?
Mr. Brunelle-Côté: We are not directly involved in the evaluation of programs. It is left to the departments to evaluate programs. Of course, we play an important role when we approve a program at the Treasury Board stage to make sure there are metrics to evaluate the program so that the program will be evaluated in the future. We expect that when the departments come with funding asks to the Department of Finance, they will provide results about how effective the program has been. It is an important part of the budgetary discussion.
Senator Cardozo: Does the Auditor General weigh in on that, too?
Mr. Brunelle-Côté: In the budget process, no. That said, of course, if the Auditor General has offered opinions and views on a program over the course of the life of the program, these will be taken into account in the evaluation of the program at the time of the renewal of the funding.
Senator Cardozo: Thank you.
Senator Ross: Good morning and thanks for being here this morning.
Changing the schedule to having our budget in the fall with an economic and fiscal update in the spring, do you anticipate this will allow alignment with the Main Estimates, and how will it change how the Main Estimates and supplementary estimates are presented? What do you anticipate this change will mean for the Treasury Board?
Mr. Brunelle-Côté: We were pleased with the decision of the government. As you know, in the past, it was a common complaint by this committee and others that the Main Estimates were not aligned with the budget. We believe that having the budget in the fall — many months before the Main Estimates — will allow us to ensure that most of the measures included in the budget in the fall will then be included in the subsequent estimates at the beginning of the year. You will remember that in the past, the budget was always tabled after the Main Estimates. The Main Estimates were not complete, and we had large numbers in the Supplementary Estimates (A) and the Supplementary Estimates (B). The alignment will allow better visibility and better transparency for parliamentarians, for stakeholders and for everyone. We think it is a good change.
That doesn’t mean it won’t put pressure on the Treasury Board of Canada Secretariat to approve. Of course, the budget isn’t one step, but before going to the Main Estimates, the Treasury Board has to review and approve the spending. It will put pressure on the Treasury Board to review and approve a lot of spending announced in the budget between the time of the tabling of the budget and the tabling of the estimates, but this is an internal problem for us. It is better for transparency, in our view.
Senator Ross: Switching gears a bit, given that we are seeing a decrease in the number of employees but not necessarily a correlating decrease in cost, do you think we should anticipate additional costs in outside contractors?
Mr. Brunelle-Côté: First of all, the government has committed to reducing the amount of consulting and management fees — it was announced in the budget — by 20% over three years. The idea of reducing the size of the public service is not to replace public servants with consultants. This is not the objective. It is a question of being more efficient with the resources that we have.
I would not expect an increase in consulting fees because we are decreasing the size of the public service. This is not one of the objectives of the reduction of the resource.
Senator Ross: That’s something for us to watch.
I have one last small question: I note $9.8 million for Phoenix-related settlements. How close to the end of Phoenix-related settlements do you think we are?
Mr. Brunelle-Côté: Our colleagues will answer this question.
Annie Boyer, Assistant Secretary and Chief Financial Officer, Treasury Board of Canada Secretariat: Good morning. Thank you for the question. We are still processing claims related to Phoenix damages. For this fiscal year, we have requested a reprofile from 2024-25 to this fiscal year for $7 million in order to pay for the backlog that we have in the claims. But we are processing basically $5 million this fiscal year related to a memorandum of agreement from 2019 and 2020. So we are advancing on that front.
We have also requested a reprofile of $2.8 million related to legal fees that were submitted to us following the recent approval in order to pay. Sorry, I was a bit distracted.
Senator Ross: Do I understand you to say that we are now settling claims from 2018-19?
Ms. Boyer: It is a memorandum of agreement that was signed with the unions from the time the Phoenix system was implemented. So it’s an agreement from 2019 and 2020. It’s really for these two years — the 2019-20 agreement — but up to the end of 2020. We are processing these claims. We are advancing. We are progressing and we are discussing with the unions in order to show progress on these claims. Some are more severe. Some are more complex than others. This is why it takes a bit more time. But others were processed in a very timely manner in order to provide support to these employees who submitted these claims.
Senator Ross: When would the last claims be submitted for? What are currently the final dates that have been submitted?
Ms. Boyer: I don’t have that information with me, but I can provide it to the committee.
Senator Ross: Thank you very much.
[Translation]
Senator Gignac: For the first time in years, the Parliamentary Budget Officer sent a letter to the Senate stating that he did not have all the information about the budget, and he even singled out specific departments.
Do you have information from those departments, or do you not have that either?
Mr. Brunelle-Côté: I want to highlight that we are committed to always working in a cooperative and transparent way with the . . . We have a very good relationship with the Parliamentary Budget Officer. As the Comptroller General indicated in her response to the Parliamentary Budget Officer, we intend to provide all the information at the beginning of December.
The federal government wasn’t able to provide the information right away, because of the expenditure reduction process.
The departments submitted their proposals at the end of August. They were then discussed, opinions were formed, the proposals were presented to the cabinet committee, and the final decisions appeared in the budget. That information wasn’t available to the departments.
Obviously, the decisions in the budget resulting from the expenditure review were not necessarily in line with what the departments had proposed. Changes were made, proposals were rejected, numbers were adjusted, direction was provided by the Prime Minister and the Minister of Finance regarding the budget cuts and so forth.
The process works as follows: Once the decisions appear in the budget, it is then the responsibility of the Department of Finance and Treasury Board of Canada to send the decisions to the respective departments. Under that process, the formal decisions are sent to the department, and details are worked out.
It is clear that what appears in the budget does not exactly match what departments submitted. They had questions, so they weren’t able to provide the information as quickly as the Parliamentary Budget Officer wanted.
A two-week extension was requested, so that all departments would have the necessary information to respond. Had they agreed to provide the information by November 19 — which, I believe, was the deadline initially set by the Parliamentary Budget Officer — the information would have been incomplete. It would not have been helpful to the Parliamentary Budget Officer and it would have been misleading to the public.
It was felt that it would be better to provide all the information, and that’s what we agreed to do by the beginning of December.
Senator Gignac: Thank you for that answer.
Annex 3 of the budget pertains to the comprehensive expenditure review, and reductions are listed by organization. Like everyone else, Treasury Board has to do its share. The purpose of the review is to reduce spending by 15% over three years.
What caught my eye is the part about Treasury Board recalibrating its involvement in the Low Carbon Fuel Production Program, shifting towards direct collaboration with organizations. I’d like to understand your role in that. What is your connection to the program?
I was surprised to see Treasury Board mentioned in reference to a fossil fuel production program. It’s a bit technical, but since there was only one page on Treasury Board and one full paragraph on the subject, I was trying to figure out what the program was and where things were headed.
Ms. Boyer: The program helps to support other departments in reducing their greenhouse gas emissions. For the Department of National Defence, for instance, $9.6 million is being sought in Supplementary Estimates (B) to reduce aviation fuel purchasing costs. We are supporting the department in that initiative.
As we determine that the department can continue making progress towards greenhouse gas emission reduction targets, our involvement will decrease in terms of supporting other departments in that regard.
Senator Gignac: You support a number of departments in reducing their carbon footprint?
Ms. Boyer: Precisely. My apologies for not using all the right terminology in French.
Senator Gignac: That’s fine. It’s clear. Thank you, Ms. Boyer.
Senator Dalphond: I’m going to fire off two or three questions. For Indigenous Services Canada, $700 million is being sought for all-hazard emergency management.
It’s understandable. There are two wildfires and things are happening right now, which means communities had to be immediately evacuated from their reserve, by air or another means, and taken elsewhere. Neighbouring villages have been destroyed.
Public Safety Canada administers an emergency and compensation program. Is the program solely for Indigenous peoples, or will Public Safety Canada administer a similar program with its own criteria?
Mr. Brunelle-Côté: The program is delivered by Indigenous Services Canada, but I can’t answer your question about the program’s parameters for compensation.
Senator Dalphond: If a village is entitled to one type of compensation, could the neighbouring Indigenous village be entitled to a different type of compensation?
Mr. Brunelle-Côté: I’m not familiar with the program parameters, and I don’t know how compensation is delivered under each program. We can check to see whether there are any differences.
Senator Dalphond: Please do. I wouldn’t want to see two bureaucratic entities administering the same kind of program.
For all intents and purposes, Bill C-4 is in force. The carbon levy and the consumer carbon rebate have already been eliminated. Did that result in any job losses at the Canada Revenue Agency or another department? It was a big program with a lot of cheques going out.
Ms. Paré: Do you mean staff reductions?
Mr. Brunelle-Côté: The department in charge would have to answer that. I would assume so.
Senator Dalphond: Could you follow up to see whether the size of government decreases when programs are cut?
Ms. ShankarNarayan: Every department makes its own decisions before reducing the number of permanent employees.
Sometimes, other options are available within the department or agency.
Once the department has made its decision, Treasury Board receives the list. Because we also work with the unions, we don’t have all the information right now, but we will be getting it in the next few months.
Senator Dalphond: Could you commit to sending us the information once you know how many people were assigned to other positions and how many were let go because the program was eliminated?
Do I have any time left?
The Chair: You have 30 seconds.
Senator Dalphond: I have to find my question, so I will ask it in the next round.
[English]
Senator MacAdam: Last fall, when representatives from the Treasury Board of Canada Secretariat appeared before this committee, they highlighted that they were reviewing the Policy on Results, which highlights the importance of results in management and expenditure decision making as well as public reporting. Your 2024-25 Departmental Results Report indicates you completed the review of the policy and started updates to strengthen its effectiveness. The 2025-26 Departmental Plan recommitted to that review and to strengthen that policy. I’m wondering if you can give us an update on that.
Mr. Brunelle-Côté: That’s a good question. It’s still a priority. We completed the review, as you mentioned. We consulted a lot of stakeholders. We consulted departments and outside partners. In the coming months, we should be able to announce a new Policy on Results given the importance of this issue. It’s not finalized yet, but we’re getting close to it.
Senator MacAdam: Thank you.
This past June, officials from the Treasury Board told our National Finance Committee here that notwithstanding any extraordinary events, the government remained committed to having the Public Accounts of Canada 2025 ready for tabling by October 15, and again the public accounts were not tabled until November 7. I’m wondering: What steps are being taken by the government to evaluate and improve its processes to keep its commitments for the timely release of the public accounts on an annual basis?
Blair Kennedy, Executive Director, Government Accounting Policy and Reporting, Treasury Board of Canada Secretariat: The government did submit or table the public accounts in accordance with the legislation. We are looking at different ways to increase the efficiency of the public accounts process. We work with the Receiver General with respect to that, and we’re hoping to ensure that we meet the October 15 deadline going forward.
Senator MacAdam: Will the work to maintain the new capital formation accounting and related reporting in any way delay the work that needs to be done on the public accounts?
Mr. Kennedy: No, it should not have any impact at all on the preparation of the Public Accounts of Canada or the tabling date.
Senator MacAdam: Thank you.
Senator Kingston: I think my question may be for Mr. Kennedy as well. In your title, it says policy and reporting. I was looking at your Departmental Plan. It says that you work with the departments to ensure that their Treasury Board submissions support value for money and comply with rules and policies and are designed to achieve and measure their expected outcomes.
I’m wondering about your experience with the Canadian Dental Care Plan, which has been on the go for a while and has, in fact, expanded. In these particular supplementary estimates, it’s the single biggest expense or submission. I’m wondering if you can talk to the committee a little bit about what your experience has been. Is there value for money? How much of an increase in the number of beneficiaries has there been? Was the program restrictive in the beginning, or is it still restrictive in terms of the types of dental care that you can receive? I want to hear about what kind of outcomes you have had and how the program has increased and expanded.
Mr. Brunelle-Côté: I guess I’m the one trying to answer this question on dental care. It’s a new program, so, of course, evaluations are ongoing. It’s difficult to evaluate a program so early, but to put the program in place, there was a thorough discussion at the Treasury Board about how to ensure that the program is structured in a way that delivers results.
There were thorough discussions about ensuring there was a results-reporting mechanism built into the program. So far, it’s a popular program, as you mentioned: 5 million Canadians have enrolled, and over 15,000 dental care providers are enrolled in the plan, with over 11,000 more participating on a claim-by-claim basis. It’s a program that is successful, but in terms of evaluating the value for money, that’s going to come later. Given the size of the program, this is one that the government would pay particular attention to in order to make sure it delivers value for money.
Senator Kingston: The program started out smaller with seniors and children, I believe, and then was expanded to involve everyone who met the financial criteria or the financial ceiling, or basement — whichever it is. How many were added to the program since the expansion of eligibility?
Mr. Brunelle-Côté: I don’t have that number. All I know is that currently 5 million Canadians are registered in the program.
Senator Kingston: For this time last year, do you know what the number would have been?
Mr. Brunelle-Côté: No.
Senator Kingston: Maybe you could provide that to us as a written answer.
Mr. Brunelle-Côté: Yes.
Senator Kingston: Thank you.
Senator Pupatello: I hope now when you explain the change in the timing of the budget, you’re getting bouquets from the provinces for the change. I was on the Treasury Board of Ontario. I know there’s much more clarity when you know what the feds are going to do with the various provinces and territories, so the timeliness has really improved.
My question is for the Senior Assistant Deputy Minister of People and Culture. I’m wondering if you have a notion of how to achieve that 15% reduction that is being called for across the board. Regarding the impact on staff, what percentage would be by attrition and what percentage would be by layoffs?
My second question is: When is the last time you would have done a comparison with the private sector on total compensation? If you have done it recently, how does it stack up? If you haven’t, when would you be doing that?
Ms. ShankarNarayan: Thank you for the question. I did not write down all the questions, so in the event I miss one, please do nudge me.
First and foremost, yes, Budget 2025 has announced a reduction of full-time equivalents, and roughly the number is 16,000 in order to get us to a sustainable level of 330,000 public servants in the core public administration by the end of the fiscal year 2028-29.
The goal —
Senator Pupatello: And what about the number through attrition versus layoffs?
Ms. ShankarNarayan: The goal is to maximize attrition and voluntary departures. We are waiting for approval of the early retirement incentive. If that gets approved, we will be anticipating that people will take advantage of the program, so the goal is through attrition and voluntary departures as much as possible. Beyond that, we’re looking at the reduction of the temporary workforce, and then beyond that, every deputy head running departments and agencies will be looking at their own staff. As you said, the 15% is for every department and agency. They will be looking at their own numbers. If they are still not able to meet the numbers that are required, then they will be looking at workforce adjustments, which is part of the collective agreements through all of the bargaining agents for employees and career transition policies that are already in place for executives who do not have collective agreements with bargaining agents.
That is where we are right now. Over the coming months, if the early retirement incentive gets approved, we have the two groups in there. We will be looking at how many of the employees will be raising their hands. We have to also look at ensuring that we maintain essential services and business continuity as well. So there would be opportunities, perhaps, for employees to move into other roles within the Government of Canada as well.
You had a second question which I did not fully write down.
Senator Pupatello: When is the last time you would have done a review of comparisons with the private sector related to total compensation for the workforce here in the government, and if you haven’t done it recently, when do you plan to do so? How do we compare if you have done it recently?
Ms. ShankarNarayan: On the total compensation, this is work that we do on an ongoing basis. It would be best if I could send it to the committee after the meeting with regard to the work that we do on an ongoing basis on the compensation and the comparisons with other jurisdictions and the private sector.
Senator Pupatello: Can you just give me a hint? How did we do?
Ms. ShankarNarayan: We are not high or low. We are actually trending very close to how other jurisdictions and the private sector operate when it comes to total compensation.
Senator Pupatello: I look forward to the report. Thanks.
[Translation]
Senator Hébert: My question is a follow-up to Senator Pupatello’s. I’m interested in the cost of the public service insurance plans. According to the supplementary estimates, nearly $600 million is being sought for the plans. Has an analysis of the costs over time been done? We know that a number of public and private organizations have concerns about such changes in compensation and benefits costs. Is there an analysis of how these costs have evolved in the federal public service? Have comparisons been done with other jurisdictions?
Ms. ShankarNarayan: I’ll start, and then Antoine can take over. We did an analysis, and we will send you the analysis and comparison documents. Your question about the changing costs also relates to inflation and the number of employees and programs. The plans include health and dental care benefits. Antoine can probably provide more information.
Mr. Brunelle-Côté: I’ll give you some of the numbers I have here. On an accrual basis, the total cost for compensation in 2024-25 was $89.2 million. Between 2014 and 2024, the cost rose by an average of 4.6% annually.
Senator Hébert: When you say total annual compensation cost, you’re talking about the total cost, not the insurance plans?
Mr. Brunelle-Côté: This includes costs for pensions and for all benefits, including salaries.
Senator Hébert: I’m talking specifically about health insurance plans and other plans.
Mr. Brunelle-Côté: I don’t have the information with me. However, it exists. We can give you this assessment.
Senator Hébert: I would like to follow up on the question asked by my colleague, Senator Dalphond, regarding the administration of certain programs. We also know that the same thing will apply to immigration. According to the centre page of the government’s budget, the withdrawal of 300,000 temporary foreign workers is expected in the coming year. We’re likely to see the same thing happen. The same savings for the administration of this type of program should be reflected in the budget allocations. However, we don’t see them in the figures submitted here by the Department of Citizenship and Immigration.
Ms. Paré: Yes, budget cuts will be tied to these announcements. However, you won’t see them this year. As mentioned, the Interim Federal Health Program, which is also run by the Department of Citizenship and Immigration, is getting a big boost. In the years to come, you may see budget cuts related to reductions in Canada’s annual immigration plan.
The Chair: I also have questions about public servants and their numbers. Your website shows tables by employee category and by designated groups. As of March 31, 2024, there were 266,433 public servants. As of March 31, 2023, there were 253,411 public servants. How can the budget say that we reached a peak of around 330,000 public servants in 2023-24? This amounts to 70,000 more public servants than the figures posted on the website.
Ms. ShankarNarayan: You spoke about 2023, and I see 357,247 public servants for 2023.
The Chair: I believe you.
Mr. Brunelle-Côté: We need to look at the definitions for the figures included in the number of public servants. I don’t know which table you have.
The Chair: I’m on the Treasury Board website. I see the statistics on human resources. It says the following: “Distribution of public service of Canada employees by designated group and occupational category.” I assume that this includes all public servants.
Mr. Brunelle-Côté: I don’t know whether this includes Crown corporations. I would need to review the table. The figures for public administration are in the budget. I have the figure in front of me, and it’s 357,965 for 2025.
The Chair: Could you have posted the figures in your possession, and not other figures? The figures that I can see erroneously show 70,000 public servants. That’s a huge number, and I’m going back to 2017.
The data appears here by category. We see the figure of 7,380 for the number of executives and 7,760 for the executive. I imagine that your tables show the same thing. Can you tell us, by occupational category, the number of executives or directors included in the figure of 350,000?
Ms. ShankarNarayan: I don’t have any figures for that category. You spoke about occupational categories. Are you referring to the different fields?
The Chair: According to the figures that you seem to be using, we see 7,760 for executives. We also see 7,380 for the EX category, which is undoubtedly part of the executive category. The LC category, law management, I imagine refers to legal counsel. We see the figure of 380. You’ll see that this data appears on the website.
I would like the correct figures. Can you confirm which table is correct? Otherwise, it will be easy for the government to come up with the figure of 260. It already has this figure. I imagine that this wasn’t its intention.
Second, I would like to see the data by category and by level. For example, we have the executive. As far as I can see, there are 5,260 executives. However, when I look deeper into the levels, there are five levels, from EX-01 to EX-05, with salaries ranging from around $160,000 to $280,000.
I would like to see these categories by level. How many people are at $260,000 and how many are at $160,000? Go back three or four years. That way, we can check the reduction and where it’s taking place. If there were reductions in the number of people, there may have been pay increments. Two people may be cut, but they hold a director position rather than another position, so the average cost per public servant also increases. I think that the committee is interested in seeing the actual reduction in real terms.
We’re talking about 441,000 full-time equivalents.
Ms. ShankarNarayan: Full-time equivalents is a category used to list our employees, as opposed to permanent employees and temporary employees. It’s a way of calculating.
The Chair: If you have 335,000 public servants in the public service, you have 441,000 full-time equivalents, which again is 100,000 more people. Does this mean that you have 150,000 or 200,000 part-time employees?
Ms. ShankarNarayan: The full-time equivalents include people who work part time and people who work on a temporary basis. They’re also included in this number. Casual employees, who work 90 days a year, are also included in these figures. A number of temporary employees who don’t work full time are included in these figures.
The Chair: I understand. If the public service has 335,000 employees and the full-time equivalents amount to 441,000, then there are actually over 441,000 people on the payroll. Two part‑time employees make one full-time equivalent, so the number of public servants should be higher if the number of full-time equivalents is 441,000.
Ms. ShankarNarayan: We can give you the full size with all the equivalents and the figures for full-time permanent employees only as well. So that could show you —
The Chair: With the professional categories, with the number per level? I want to know the number of EX-05s and EX-04s and look back over the past four years. That way, we can see the progress of the work that will be carried out to reduce the size of the public service.
Ms. ShankarNarayan: We have these details, but —
The Chair: Yes, I know. I didn’t expect you to have them with you.
Ms. ShankarNarayan: I don’t have them in front of me, but for EX-04 and EX-05 executives —
The Chair: I gave this example, but I want the figures for all the categories. For example, there are 35,000 scientific professionals. Will there be more cuts among scientists or among executives?
Ms. ShankarNarayan: I don’t have the figures in front of me right now.
The Chair: Can we get these details by complete category and by level within five or ten days? We’ll be looking at the budget soon, so I don’t want it to take too long.
Ms. ShankarNarayan: We’ll try. I would like to confirm whether we need to talk to the departments and agencies as well. We’ll try, and I’ll provide the details.
The Chair: We’ll be starting the review of the budget. It’s quite significant and it involves a great deal of money. Thank you.
We’ve gone over our time. I apologize for taking more time. I had to explain my request, but I think that this will help everyone. Thank you. We’ll continue tomorrow.
(The committee adjourned.)