THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Tuesday, March 24, 2026
The Standing Senate Committee on National Finance met with videoconference this day at 5:09 p.m. [ET] to examine Supplementary Estimates (C) for the fiscal year ending March 31, 2026.
Senator Claude Carignan (Chair) in the chair.
[Translation]
The Chair: Honourable senators, I am Claude Carignan, a senator from Quebec and the chair of the Standing Senate Committee on National Finance.
Now I’d like to go around the table and have the senators introduce themselves.
Senator Forest: Welcome, I am Éric Forest, representing the Gulf senatorial division, in Quebec.
Senator Galvez: I am Rosa Galvez from Quebec.
Senator Gignac: I am Clément Gignac, representing the Kennebec senatorial division, in Quebec.
Senator Dalphond: I am Pierre J. Dalphond, representing the De Lorimier senatorial division, in Quebec.
[English]
Senator Pupatello: Sandra Pupatello, Windsor, Ontario. I’m being very specific.
Senator Cardozo: Andrew Cardozo, Ontario.
Senator Ross: Krista Ross, New Brunswick.
Senator MacAdam: Jane MacAdam, Prince Edward Island.
[Translation]
Senator Hébert: I am Martine Hébert from Quebec.
The Chair: Honourable senators, we are continuing our meeting, which began a bit earlier today, to examine Supplementary Estimates (C) for the fiscal year ending March 31, 2026.
For our first panel, we are pleased to have with us, from Veterans Affairs Canada, Pierre Tessier, Assistant Deputy Minister, Chief Financial Officer and Corporate Services Branch; Julie Drury, Acting Director General, Policy and Research Division; and, by video conference, Pamela Harrison, Acting Director General, Service Delivery and Program Management. From Immigration, Refugees and Citizenship Canada, we welcome Annie Rémillard, Acting Assistant Deputy Minister and Chief Financial Officer. Finally, from Public Services and Procurement Canada, on behalf of the Canada Post Corporation, we have Lorenzo Ieraci, Assistant Deputy Minister, Policy, Planning and Communications; and Eugene Gourevitch, Director, Postal Affairs.
Welcome and thank you for accepting our invitation to be here today.
We will now hear opening remarks from Mr. Tessier.
Mr. Tessier, the floor is yours.
Pierre Tessier, Assistant Deputy Minister, Chief Financial Officer and Corporate Services Branch, Veterans Affairs Canada: Mr. Chair and honourable senators, good afternoon.
[English]
Thank you for the invitation to appear today to discuss the Supplementary Estimates (C) for Veterans Affairs Canada.
I would like to begin by acknowledging that we are gathered on the traditional, unceded and unsurrendered territory of the Algonquin Anishinaabe people.
Acknowledging the land upon which we gather is crucial to our continuous dedication to reconciliation and the responsibility of the Canadian people.
[Translation]
My name is Pierre Tessier, and I am the Assistant Deputy Minister of the Chief Financial Officer and Corporate Services Branch. I appreciate this opportunity to discuss Supplementary Estimates (C) and to support the committee in its mandate to review public expenditures.
[English]
As the fiscal year comes to an end, the Supplementary Estimates (C) represent the final opportunity for our department to seek parliamentary approval for adjustments to our planned spending to effectively support veterans.
Before speaking specifically to the funding requests in the estimates, I would like to highlight a few key items that help illustrate both the work and the tangible impact of our programs on the lives of veterans and their families.
Going back to the 2024-25 fiscal year, there were over 8,500 Canadian Armed Forces members released — of these, approximately 2,500 were for medical reasons. Therefore, we continue to see requirements for our services.
Approximately 35,000 veterans receive the Income Replacement Benefit. That includes the majority of veterans actively participating in Veterans Affairs Canada’s Rehabilitation Program after their release and those who have been deemed to have a diminished earning capacity.
[Translation]
Last year, the department received approximately 84,000 compensation applications for pain and suffering.
In addition, nearly 1,000 veterans have received support through the Veterans Emergency Fund since the beginning of the year.
Lastly, in the previous fiscal year, a total of 7,520 members of the veterans community accessed Mental Health Benefits.
[English]
As you know, throughout the year, we adjust our fiscal expenditures according to demand in these and other areas so that all eligible individuals receive support when they are entitled to it and when they come forward.
For the purposes of the Supplementary Estimates (C) exercise, we are looking at a $300.4-million increase in planned expenditures, moving our budget from $7.853 billion to $8.154 billion, or just over a 3% increase. Of this amount, $213 million is for the Pain and Suffering Compensation for an increased number of decisions, $70 million is for the Income Replacement Benefit due to increased demand and increased costs and $20 million is to account for increased demand in veteran support services. There is also $100,000 for an internal reallocation to support increased demand for the Veterans Emergency Fund.
[Translation]
Mr. Chair, these supplementary estimates reflect our unwavering commitment to Canadian veterans and their families. Every dollar in authorized spending is an investment in an individual’s well-being and their ability to live with dignity following their military service.
Thank you for inviting me to outline how these supplementary estimates will provide the care and support all veterans deserve.
I would be pleased to answer your questions.
Thank you.
The Chair: Thank you, Mr. Tessier.
Ms. Rémillard, you may go ahead with your opening remarks.
Annie Rémillard, Acting Assistant Deputy Minister and Chief Financial Officer, Immigration, Refugees and Citizenship Canada: Good afternoon, Mr. Chair and committee members.
Let me begin by acknowledging that we are meeting today on the traditional, unceded territory of the Algonquin Anishinaabe People.
Thank you for the invitation. I appreciate the opportunity to speak with you about the 2025-26 Supplementary Estimates (C).
[English]
The government’s priorities include restoring control over the immigration system and returning immigration to sustainable levels.
As overall immigration levels decrease, we’re prioritizing newcomers with the skills that Canada needs to complement our domestic workforce.
Canadians expect our system to be well managed, sustainable and compassionate to those who need our protection. Immigration, Refugees and Citizenship Canada is seeking $174.2 million through the Supplementary Estimates (C) to help modernize and improve services and support communities.
[Translation]
We are requesting $62.9 million for the City of Toronto to support it in providing temporary accommodations to asylum claimants and other new arrivals while it implements more sustainable and cost-effective approaches.
We’re seeking $52.8 million to strengthen the Passport Program and improve accessibility for Canadians. This includes online passport renewals, allowing eligible Canadians to renew their documents from home, and faster decision making, while maintaining the integrity of these secure travel documents.
[English]
We are also requesting the reprofile of $42.2 million from previous fiscal years for the Digital Platform Modernization program, which will enhance our services, improve online offerings and help manage increased application volumes, among other benefits. Finally, we seek $16.3 million to implement workforce adjustment and career transition measures aligned to the 2025-2027 Immigration Levels Plan. This covers costs associated with indeterminate workforce reductions in accordance with applicable directives and collective agreements.
[Translation]
The Chair: Thank you very much, Ms. Rémillard.
We will now hear Mr. Ieraci’s opening remarks.
Lorenzo Ieraci, Assistant Deputy Minister, Policy, Planning and Communications, Public Services and Procurement Canada: Thank you, Mr. Chair.
Before I begin, I would like to acknowledge that we are gathered today on the traditional, unceded territory of the Algonquin Anishinaabe People.
With me today is Eugene Gourevitch, Director of Postal Affairs.
I want to thank the committee for inviting us here to discuss the proposed cash injection under section 31 of the Canada Post Corporation Act, as part of Supplementary Estimates (C).
Public Services and Procurement Canada supports the Minister of Government Transformation, Public Works and Procurement in fulfilling his responsibilities for his portfolio Crown corporations, including Canada Post.
In this regard, our team provides analysis and advice to the minister. The management of Canada Post, particularly its day‑to‑day and operational activities, is carried out by Canada Post’s executives and is overseen by its board of directors.
Mr. Chair, Canada Post’s legislated mandate requires it to be financially self-sustaining; however, the corporation has accumulated significant losses in recent years.
Today, the finances of Canada Post are in a critical position, and since 2018, the corporation has reported cumulative operating losses in excess of $5.5 billion.
The losses reported by Canada Post in the first nine months of last year were close to $1 billion. This means that the corporation is on track to record a 2025 loss significantly larger than any in its history.
[English]
As part of the Supplementary Estimates (C), the Government of Canada is making up to $1.01 billion in repayable funding available to Canada Post.
This repayable funding is provided to allow Canada Post to continue operations and remain solvent.
Amongst other things, a reduction in volumes has driven Canada Post’s financial decline. Since 2006, mail volumes have dropped by 70%. In addition, Canada Post’s share of the parcel market fell from 62% in 2019 to 24% in 2024.
Alongside these declines in volume and market share, the corporation is faced with an increasing number of addresses that it has to deliver to and an organizational structure that no longer aligns with the demand for its services. It is clear that action is needed to restore long-term stability.
Earlier this year, the Government of Canada instructed Canada Post to begin a multi-year transformation, informed by the recommendations of the Industrial Inquiry Commission.
The goal is to strengthen financial performance and ensure the corporation can continue delivering for Canadians well into the future.
[Translation]
Mr. Chair, the Industrial Inquiry Commission, led by William Kaplan, made a number of recommendations regarding Canada Post, which the government accepted. The commission report stated that Canada Post was effectively insolvent and called for significant reforms. The recommended changes included amending letter service standards, ending the moratorium on community mailbox conversions, and modernizing the 1994 moratorium on rural post offices.
[English]
I will also note that following two years of labour unrest, there is progress on a potential new agreement.
This past December, a tentative agreement was reached between Canada Post and the Canadian Union of Postal Workers. Since then, both parties have worked together to finalize contractual language and have agreed not to engage in any strike or lockout activity during the ratification process, which is expected to conclude this summer.
Should that agreement be ratified, it will provide stability to Canada Post on the labour relations front for years to come.
[Translation]
Mr. Chair, the government has made it clear that Canada Post provides a critical service to Canadians. Nonetheless, Canada Post faces a serious financial situation and must be put on a path to viability.
This cash injection ensures that Canada Post can continue to serve Canadians across the country, as we continue to work with Canada Post on a better path towards the future.
Mr. Gourevitch and I are happy to take your questions.
Thank you.
The Chair: Thank you very much.
We will now begin the question-and-answer portion.
Senator Forest: My first question follows up on this morning’s questions. I’m sure you went running back to your office to find the financial impact of the 6.5% retroactive pay increase as of 2024. Do you have an idea of how much that will cost?
Mr. Ieraci: Yes. Thank you. Briefly, if the collective agreement is ratified by the union and Canada Post, the pay increase would represent approximately $200 million for the first year, so 2024. Going forward, the number would be higher, since it goes up with each passing year. I will ask my colleague to provide more information.
Eugene Gourevitch, Director, Postal Affairs, Public Services and Procurement Canada: Thank you. I’m going to answer the question in English.
[English]
If you look at the Canada Post annual report, you will find that 2024 labour expenses were roughly $3.7 billion, and 80% of those expenses relate to the Canadian Union of Postal Workers. In a back-of-the-napkin calculation, you’re looking at roughly $3 billion a year in salaries for the membership, and on the $3‑billion base, 6.5% would come to roughly $200 million a year. That being said, the 2024 results would already include an assumption around the increase that the union members would receive. From what I understand, that assumption would have been 5%, given that was the raise ordered by the Canada Industrial Relations Board when they actioned the Minister of Labour’s order to force the workers to return to work.
[Translation]
Senator Forest: If I understand correctly, the corporation has run up a $1-billion deficit since the beginning of the year. The government is going to give Canada Post a cash injection of $1 billion to make up the shortfall, which will ensure that you can continue to provide postal service. At the same time, the 6.5% retroactive pay increase as of 2024 — so for 2025 and 2026 — is pretty significant in my eyes. It will amount to another billion dollars. Basically, it doesn’t come in the mail, but the corporation is short a billion dollars somewhere.
The Chair: Will there be other requests?
Mr. Ieraci: Thank you for your questions.
As of now, the government has requested the funds to address Canada Post’s current financial shortfall. If you’re asking me whether this will be the last request from Canada Post given the losses it’s experiencing, I’m not sure I’m in a position to say that there won’t be requests in the future. We’ll see.
Senator Forest: Right now, we’re examining Supplementary Estimates (C) for the fiscal year ending March 31. There’s not much time for another request and a Supplementary Estimates (D). You’re ending the fiscal year with a deficit of how much?
Mr. Ieraci: Thank you, Mr. Chair. I think I better understand the senator’s question now.
For the government’s fiscal year ending on March 31, the total being sought is $1 billion. The amount is up to $1 billion. The money isn’t automatically available to Canada Post. Every month, it submits a funding request based on its financial situation to ensure that it has enough money to continue operations.
There won’t be other requests. I think I misunderstood your question. No more requests will be coming in before the end of the fiscal year, but future requests are possible.
Senator Forest: Those requests would be in the 2026-27 budget, because at this point, the 2025-26 budget period is ending. Is that right?
Mr. Ieraci: Yes.
Senator Forest: Restructuring Canada Post and ensuring the viability of an essential service to Canadians is quite the challenge.
Are you working on something with the unions?
The situation is worrisome.
Mr. Ieraci: Thank you for the question, Mr. Chair. It’s a two‑part answer.
First, after Minister Lightbound’s announcement in September, Canada Post gave the minister a plan identifying the actions it could take to implement the Kaplan commission recommendations that the minister had announced and approved. The plan also laid out other approaches. The last time the minister appeared before a parliamentary committee, he noted that Canada Post was working on the transformation.
Second, you asked about the unions. I’m going to be very careful here, because Canada Post and the union are still in the bargaining period. The agreement —
Senator Forest: That’s our tax dollars at work, not the union reacting.
Mr. Ieraci: My apologies for becoming distracted. The two parties are still in the bargaining phase, so I wouldn’t want to comment on the union, the outlook or what have you. I know it expressed concerns about the Kaplan commission recommendations.
The Chair: Just for clarification, my understanding is that the $1.8 billion does not include the anticipated pay increase, which will come later, because the agreement hasn’t been signed or finalized. Is that right?
Mr. Ieraci: Yes, that is right.
The Chair: There will be others, then.
Mr. Ieraci: That is right. The amount for the retroactive payments will not be triggered until the collective agreement is finalized.
The Chair: Is it included in the $1 billion you’re asking for?
Mr. Ieraci: It’s included in the contingency forecasts. That is why I said that it was up to $1 billion. However, Canada Post is not allowed to access the funding unless it’s needed.
The Chair: Oh, it’s here. You referred to a plan that was given to the minister. Could we get a copy of it?
Mr. Ieraci: The plan isn’t public yet. It’s fairly complex, so it’s still under consideration. It’s more than a hundred pages. The minister is still reviewing it, and we are continuing our analysis. A number of things in the plan were announced by the minister, and Canada Post is starting that work.
The Chair: Thank you. That was just for clarification.
[English]
Senator Cardozo: Thank you. I have a few quick questions for you, Ms. Rémillard, on the immigration aspects here.
Could you take us through the four items on pages 2-27 and give us a little more information on each one of them? You mentioned them in your opening remarks.
For example, regarding the first one on the asylum claimants in Toronto, is that a payment to the City of Toronto? Do other cities have claims?
Ms. Rémillard: Thank you for the question. Yes, I can start by talking about the one-time payment to the City of Toronto. It’s an amount of $62.9 million. That is a one-time payment to the city in recognition of the costs incurred for asylum seekers and newcomers. It’s primarily for accommodations. This is similar but different at the same time from the Interim Housing Assistance Program, which is a program that has existed for a number of years and is available for provinces, territories and municipalities across the country.
This special one-time payment is solely for Toronto because they are transitioning to having in place more sustainable and cost-effective accommodations for asylum seekers.
Senator Cardozo: Is it for this fiscal year? Is it recognizing that they might have had a larger number of asylum claimants?
Ms. Rémillard: Yes, it is for this fiscal year only: 2025-26. The City of Toronto is known to have received a high number of asylum claimants, in addition to the Regional Municipality of Peel and also Quebec. Quebec and Ontario are the two provinces that have received the most asylum claimants.
That said, this is in recognition of the high costs that they’ve had to incur to be able to accommodate them and lodge them on a temporary basis in the city.
Senator Cardozo: Do you have other cities or provinces making similar claims?
Ms. Rémillard: Not at the moment, but the Interim Housing Assistance Program is in effect until the next fiscal year, which is until March 2027. Some agreements have been signed with some municipalities and provinces across the country.
Senator Cardozo: Can you talk more about the others, please?
Ms. Rémillard: The second element is an injection of money of $52.8 million for the Passport Program. The Passport Program has been under financial hardship for some time. During the pandemic, you will remember there was a large decrease in demand and in revenues, but the costs were maintained. We’ve been recovering from that period for quite some time. This investment is being made into the Passport Revolving Fund to stabilize it as we continue to implement some measures that will bring some short-term, medium-term and long-term benefits to the program.
One of those measures is the implementation of service improvements, such as the online passport system that is now slowly launching. In the medium term, that will bring some operational cost reductions. In the meantime, this is an investment to help stabilize the fund.
The third element is $42.2 million for the Digital Platform Modernization project. It’s not just a big project but a big program that is multi-year, multi-faceted and very complex. There is an overall budget for the program, but this request here is a reprofile of funding from the past fiscal year, so it’s a realigning of the funding with the expenses occurring this fiscal year.
The fourth element is an investment of $16 million for workforce adjustment costs. When we announced the 2025-2027 Immigration Levels Plan for the first time, we saw reductions to immigration levels. Immigration, Refugees and Citizenship Canada is funded based on the levels included in the plan, so if there’s a decrease, naturally there would be a decrease to our funding as well. That meant we had to reduce our indeterminate workforce as well. This funding is to help pay for the cost of that workforce adjustment, which includes the salaries of the individuals, of course, but also transition support measures as well. That’s what the fourth element is.
Senator Ross: My question is for you as well to follow up on some of the things you just talked about.
A year and a half ago, back in December 2024, Immigration, Refugees and Citizenship Canada representatives were here, and we talked about the Digital Platform Modernization program, which was part of the Supplementary Estimates (B). At that time, we heard there were plans to implement the platform to modernize client support services. That was part of tranche 2 of funding. Where are we at now? What tranche are we in? At the time, there was a request for $36 million and $8.3 million, and they were already being moved forward from the previous. We’re now in year five. Fill me in. Where are we?
Ms. Rémillard: Thanks for the question. We are implementing tranche 1 and tranche 2. Tranche 1 is the client experience platform, and tranche 2 is the case management platform — basically the front end and the back end of the system. We’re at the tail end of tranche 1. We still have work to do on that front, and we’re also into tranche 2. There is still some work to be done over the next fiscal year.
Like I said earlier, the funding is set by the fiscal year, but sometimes we just need to realign it to the actual spending. As we go through the program, obviously sometimes there are some changes, small delays or lessons learned from some of the projects being delivered, so that brings some adjustments to the work packages that come after.
Senator Ross: Given that originally it was a five-year program launched in 2021 and we’re in year five, are we almost done? You’re saying tranche 1 and tranche 2. When does the program expect to be completed?
Ms. Rémillard: There are four tranches in total to be delivered. The project still has a couple more years to go. I don’t have all of the details of exactly the work plan by fiscal year, but tranche 1 and tranche 2 — the two tranches currently under way — are well under way and they are being delivered.
Senator Ross: But the original plan for it to be completed has now been pushed forward a couple more years?
Ms. Rémillard: It’s been pushed a little bit forward. Again, I’d have to confirm the original plan of DPM 3. Actually, the delays are not that significant, but there are definitely a few years still to go.
Senator Ross: I’m also interested in the $52.8 million being requested for the Passport Program. I was of the understanding that it was a cost recovery program. Can you help me understand what that is for and how the prices are set for travel documentation, passports and that sort of thing?
Ms. Rémillard: Yes, that’s a great question, and you’re right.
The Passport Program operates with the Passport Revolving Fund. The passport expenditures are funded from the fees we collect for passport applications and renewals. That revolving fund means that over a 10-year business cycle, we can carry over the accumulated surplus of the program to continue paying for the expenses. What happened during the pandemic was there was a significant drop in demand and revenues, so that ate into the accumulated surplus while the spending was maintained. With our partner Service Canada, which is the delivery branch of the Passport Program, we’ve been working closely together to try to bring down spending as much as we can to contain costs but also to accelerate investments and improvements to service delivery so that we could minimize the operating costs of the program while also adjusting to this new revenue reality.
The revenues of the Passport Program are very much influenced by socio-political factors and events. Also, the actual revenues haven’t been keeping up with the rate of inflation, whereas the costs have. The costs have increased because we’ve renegotiated salaries, for example, but the revenues have stayed below the inflation rate.
Long story short, given all of this, this special funding is to help the fund as we continue to implement those investments. It’s to bring some financial relief.
Senator MacAdam: My question is to Veterans Affairs Canada. Veterans Affairs Canada is seeking $300 million to fund demand-driven programs and services that provide support to eligible veterans and their families. I’m wondering if you can tell me how Veterans Affairs Canada assesses and forecasts demand for its demand-driven programs and services to ensure adequate and timely funding. What factors explain the request for additional funding for this year?
Mr. Tessier: Thank you for the question. There are a few factors that drive the demand. I’ll talk about the history and then I’ll talk about the factors that evolve from year to year. I’ll talk first about the demand. We’ve seen a significant increase in yearly claims: a 7% to 10% increase on a yearly basis. We do forecast those types of increases in our base funding. This year, with Budget 2025, it provides $184.9 million over four years and $40 million ongoing. What that permitted us to do internally at the department was it signalled to our employees who are processing claims that funding will be there the following year. We had a lot less turnover in our staff, and we were able to maintain our current trained staff. That enabled us to process more claims this year. We’ve been able to reduce processing times by 40% since 2021-22, and we continue to see that progress. We’ve brought down the actual service standard to 23.9 weeks for the first two quarters of 2025-26. The standard is 16 weeks, so we’re trending toward that service standard. We’re eating into the demand we had built up within the department.
The amount that we’re seeking is a huge contributor to being able to actually go beyond the initial forecast for this fiscal year, which is really good because we’re processing and requesting claims faster.
Senator MacAdam: That was my next question. What are the current wait times for processing the various applications under the different programs?
Mr. Tessier: For the Pain and Suffering Compensation, as I mentioned, we were able to bring down the wait times to 23.9 weeks for the first two quarters. The standard is 16 weeks. We’ve been able to reduce the gap for female and francophone applications. Male and female applications are now on par. They were not for a number of years. We were also able to bring our francophone applications in line with anglophone applications.
[Translation]
We’ve been able to keep staff who process francophone applications, to make sure that we can respond within the same service standards followed by staff who process anglophone applications.
[English]
Senator MacAdam: What are some of the other programs? That was the Pain and Suffering Compensation. What about other ones? There were large wait times with some of the programs, including disability supports, I believe.
Mr. Tessier: Correct. The Pain and Suffering Compensation is the disability program, so that’s the same. The Income Replacement Benefit, which is the second category, is the $70 million. The Income Replacement Benefit program is a taxable monthly benefit that ensures veterans’ total income will be at least 90% of their gross pre-release military salary while they’re participating in rehab or if they’ve met the criteria for diminished earning capacity. We continue to see demand for that program. That one is a pure result of more veterans looking for rehab.
Obviously, the cost continues with inflation within that program, so we’re seeing increased costs, but it’s very much driven by the number of applicants into that program.
The $20 million for veteran support services is also linked to the Rehabilitation Program services. If you think of mental health services, physiotherapy and those types of services, those are a direct link to those costs. The last one that I’ll talk about is the $100,000 that we transferred internally for the Veterans Emergency Fund. We continue to see on a year-to-year basis the need for that program. That’s where a veteran can come forward and request up to $2,500 tax-free dollars at a time and up to $10,000 per year for any emergencies that would cause due harm to the veteran. If they’re at risk of losing their home, having to pay rent or if snow caves the roof of a veteran’s home, we’re there to support them if it were to cause due hardship.
Senator MacAdam: Thank you.
[Translation]
Senator Hébert: Ms. Rémillard, I see that you are requesting $14.5 million for the Immigration Levels Plan transition. Could you please explain what exactly that is?
Ms. Rémillard: It’s $14 million plus benefits, for a total of $16 million. The request is tied to the immigration levels for 2025-27, because that was the first time a reduction in immigration levels had been announced.
Immigration, Refugees and Citizenship Canada’s funding is based on the costs associated with the immigration levels, and since the levels were declining, we had to reduce our workforce.
That means we had to undertake a workforce adjustment. Positions were therefore cut. When the immigration levels were announced, we received funding to help cover the costs of the workforce adjustment.
Once a position is eliminated, there is still a period of time before the employee is able to find a new job or leaves the department. This amount is to cover that cost.
Senator Hébert: In other words, what you’re saying is that the savings from the staff reductions are costing us money? That’s basically what it boils down to. If you’re telling us it’s costing $14.5 million to cut staff, it means that those savings are not covering the cost of redeploying or retraining staff, or what have you. It’s somewhat complicated.
Ms. Rémillard: The reduction in immigration levels, and thus our operating budget, was much larger than the investment being requested. The reductions are permanent, whereas this is a temporary cost. The cost is for one year only and will disappear after that. This is a small investment in order to return to an appropriate operating level afterwards.
Senator Hébert: This is an expense that couldn’t come out of the money being saved. Is that what you’re saying?
Ms. Rémillard: In net terms, yes. In the supplementary estimates, it looks like an investment, but yes, the reduction in our reference levels is the difference between the two.
Senator Hébert: Thank you.
I didn’t quite understand earlier. Is the money for the Interim Housing Assistance Program going directly to the City of Toronto?
Ms. Rémillard: Yes, the $62.9-million investment is solely for the City of Toronto.
Senator Hébert: What about the funds being sought by Quebec? Since 2025, the city of Montreal has taken in the second-largest number of asylum seekers. Am I to understand that, if Montreal made a similar request, it would qualify for funding?
Ms. Rémillard: Yes. The City of Montreal can submit an application under the Interim Housing Assistance Program.
That said, as I mentioned earlier, we recognize that the Province of Quebec has received its share of asylum claimants. Last year, a lump sum payment was made to the Province of Quebec. If we consider parameters similar to those for the City of Toronto, the amount granted was $581 million. This was in recognition of costs spanning a number of years, dating back to 2017. That payment was made last year.
The City of Montreal and the Province of Quebec can also submit their applications to receive a portion of the grant under the Interim Housing Assistance Program.
The Chair: The difference is that the City of Montreal cannot receive a grant directly. In Quebec, you have to go through the Government of Quebec. That’s probably the difference.
Ms. Rémillard: Yes. Under the Canada-Quebec Accord, a grant is provided to the Province of Quebec to manage its immigration system, which is distinct from the asylum claimant system. They are two separate programs.
[English]
Senator Galvez: The $1.01 billion that is requested by Canada Post is presented as a short-term transition that will be fully repaid. We all understand that we take these funds as capital for transformation, and it’s not a subsidy. In talking about your 100-page plan, we all expect you will tell us how you will reimburse and how Canada Post will be modernized.
How will you prioritize this investment to transition from a declining letter mail model to a sustainable logistics and parcel delivery model? I know you have your 100-page plan, but I would like to know if you are considering the electrification of your fleet and energy efficiency. Is joining the digital economy and circular economy among the initiatives in order to transform Canada Post?
Mr. Ieraci: Thank you for the question. With regard to the $1 billion, the Government of Canada has announced — by endorsing the capital and recommendations — that Canada Post will start its transformation. I don’t want to mislead the committee about the budget being asked for.
Canada Post is operating on a monthly and annual deficit. The funding is primarily to ensure that the corporation is able to maintain operations and maintain solvency as it starts the process of moving forward toward transformation. That transformation will be a longer-term project or initiative.
With regard to the specific examples you gave in terms of electrification and the digital economy — recognizing, of course, I don’t want to speak on behalf of Canada Post, which is its own organization with its own board of directors and so on — it’s taking a look at electrification of its fleet. That would require a capital investment if it were to fully electrify its fleet beyond or more than the normal renewal of its fleet. It is something we’re exploring with Canada Post, keeping in mind some of the financial constraints.
With regard to the digital economy, Canada Post has explored and will continue to look at that. That will likely be a longer-term proposal or initiative.
Senator Galvez: Maybe you can send a written answer. In any of these corruption scandals, such as the Panama Papers and LuxLeaks, there is always the implication of PO boxes. In the Panama Papers, some PO boxes belonging to Canadians were involved.
Can you enforce that someone look into how this can be stopped or verify these ghost corporations that own these PO boxes?
Mr. Ieraci: Thank you for the question. We’re going to have to take that back to Canada Post. That’s an operational question, so we will have to take it back to Canada Post.
[Translation]
Senator Gignac: When I look, I have a hard time finding Canada Post’s revenues. I have to really dig deep. How much are they? Four billion dollars a year? How much are the revenues? We know what the expenses are. In terms of salaries, I understand we’re talking about, what, $3 billion?
Mr. Ieraci: You want to know what Canada Post’s revenues are?
Senator Gignac: Yes, please.
Mr. Gourevitch: Thank you for the question.
In 2024, the revenues were about $6 billion.
Senator Gignac: That was in 2024. In 2025, they were probably less. Salaries are over $3 billion, so that’s at least half of the revenues. Is that what I understand?
Mr. Gourevitch: Yes. With benefits, it’s about 70%.
Senator Gignac: Is privatization, like in Belgium, Germany and the United Kingdom, a potential scenario you’re considering? Because I can’t see how you will be able to . . . . Unless the price of the stamp is raised to $3, but then even fewer people will use the postal service. I’m trying to see how you could have a sustainable business model.
Mr. Ieraci: Thank you for the question, Mr. Chair.
Privatizing Canada Post is an option, but it is not one we are spending much time or energy on at the moment. We would like to explore other options.
Of course, other people and groups will have their own views on whether this would be a good approach to move forward. For us, at Public Services and Procurement Canada, it’s not one of the options we’re currently looking at closely, as we think there are other options available.
Senator Gignac: Are you confident that you’ll find a scenario that will enable you to self-finance, without privatization, taking into account the staff reductions by 2030 that you’ve announced?
Mr. Ieraci: I think everyone realizes what the challenge is. As I briefly mentioned this morning, other countries have taken different approaches to try to address some of the challenges that postal systems are facing. We’re looking at what works in other countries, especially Australia, to see if we can use those solutions.
Can I guarantee you that there is a perfect solution for Canada Post that will make everyone happy? The answer is probably no. Compromises will be necessary in some areas. However, we want to explore as many options as possible so that Canada Post can continue to provide services to Canadians in the future.
Senator Gignac: I think we’ll see each other again. That’s my understanding.
Senator Dalphond: I have a question about Canada Post, and then we’ll move on to veterans.
What you have done is a loan. So, when we look at Canada Post’s balance sheet, it’s negative. It’s a liability. So what is the corporation’s current balance sheet? What is the accumulated deficit?
Mr. Ieraci: Do you mean the operating deficit?
Senator Dalphond: If we look at the balance sheet, there are assets, liabilities, and then there is the debt at the bottom. It will say “accumulated surplus.” I understand they had one a few years ago, but they used it up on operations. What’s the amount on the bottom line?
[English]
Mr. Gourevitch: If it’s okay, I think we’d rather return with an answer in writing just to make sure we don’t mislead the committee, but currently there is a positive balance in terms of the government’s position, and that is largely due to the fact that the pension fund is in a good position right now.
[Translation]
Senator Dalphond: For veterans, you said there were 84,000 compensation applications for suffering in 2025, which just ended. Is that comparable to previous years, when we saw an increase in applications?
Mr. Tessier: Thank you for the question.
We continue to see an increase year after year. In recent years, we’ve seen an increase of 10% to 12%. It was 7% last year. It’s a little more stable this year: We may be around 3% or 4%. However, we continue to see an increase for our programs.
Senator Dalphond: So the number of applications is still rising, but not as fast as before; benefits are higher, and you are saying that the financial needs are being created because lump sums are being paid out instead of monthly amounts. I understand that, if we compare monthly amounts, such as $20 or $40, with a lump sum payment — for example, $7,000 — then everyone takes the lump sum payment of $7,000.
Are these small amounts that accumulate and result in the majority of people choosing the lump sum option rather than monthly payments?
Mr. Tessier: I would say there are two factors.
The first is that, this year, we’ve increased our capacity for the first time in a number of years. We’ll be able to process over 90,000 applications. That’s significant. We continue to automate our processes and increase that volume.
It’s not just because of the way they choose to receive the payment — whether monthly or annually — it’s because we’ve increased the number of applications we’ve been able to process this year. That has a major impact on the numbers we are seeing.
We are not seeing a year-over-year increase in the number of people taking a lump sum payment. The rate remains stable at about 70% at the moment. We continue to offer $500 once people have the option, if they want financial advice, and to help them determine which option is best for them.
Senator Dalphond: What is the average amount paid out in lump sums? Is it in the range of $5,000 to $10,000 or are the amounts smaller?
Mr. Tessier: It can vary depending on the percentage and the condition. For each condition, we must ensure that it is attributed to their service. After that, it’s really a percentage ranging from 5% to 100%. So something in the 5% to 10% range would perhaps be between $20,000 and $30,000.
Senator Dalphond: I see.
Is there any indication that the conditions in the Armed Forces are resulting in significantly more applications? Aren’t these figures in terms of applications for pain and suffering related to the fact that operational difficulties are leading to more applications of this nature than in the past?
Mr. Tessier: No, I don’t think so. However, I believe that our demand is continuing to grow and increase. The number of programs has also increased.
Senator Dalphond: Okay, so there are new programs?
Mr. Tessier: That’s right. There are programs that were offered in 2019-20 and are better known by the community today. They have more access. There is also the mental health program we introduced in 2022. Veterans can submit an application. In the meantime, they can receive services for up to two years even if their application hasn’t been approved. We’ve really made an effort to ensure that people would receive the service even though we weren’t able to process applications as quickly. Now we’re catching up on the backlog, but it’s a very good service.
Senator Dalphond: Bill C-15, which was just passed, has led to the dismissal of the veterans’ class action lawsuit for housing costs that were based on the province, which were lower in the Northwest Territories.
How much money was the government asked for?
Julie Drury, Acting Director General, Policy and Research Division, Veterans Affairs Canada: Could you repeat the question?
[English]
Senator Dalphond: There is a class-action lawsuit pending over Bill C-15, the budget implementation act, cancelling retroactively the delta that was calculated for the subsidies that were paid to veterans, using the provinces but not the Northwest Territories, where it was cheaper than the lowest province. They claimed that part of the money in the class action. What amount was at stake there to justify that we go back 20 years?
Ms. Drury: Thank you for the question. You are talking about the accommodation and meals allowance for veterans in long‑term care. Thank you for the question. Effectively, Veterans Affairs Canada does, as you know, fund long-term care for eligible veterans with service-related disabilities. These veterans are only responsible, as you know, for their accommodation and meals. When this program was put in place in 1998, it was founded on the program structure and how the calculations were done was founded on provinces.
Senator Dalphond: I understand that, but the definition includes territories.
Ms. Drury: Not territories.
Senator Dalphond: What is the difference that it makes to the government if we use the territories instead of the provinces?
Ms. Drury: There is really not a specific number there for us that we can offer you. We can go back and look at it internally and see if we can provide something more specific, but it will vary and depend on which province had the lowest rate that year on which we based the allowance. It would vary year by year. But in terms of the total number, we would have to provide that to you.
[Translation]
The Chair: Thank you very much.
We have to wrap up the meeting, unfortunately. We’ve gone over the time allotted to us.
You still have my question, so you can send me the answer to the question I asked the first panel.
Thank you very much.
(The committee adjourned.)