THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Tuesday, April 14, 2026
The Standing Senate Committee on National Finance met this day at 9 a.m. [ET] to study the Main Estimates for the fiscal year ending March 31, 2027, with the exception of Library of Parliament Vote 1.
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: Welcome. Éric Forest, independent senator, Gulf division in Quebec.
[English]
Senator Pupatello: Sandra Pupatello from Ontario.
[Translation]
Senator Gignac: Good morning. Clément Gignac, Quebec.
Senator Oudar: Good morning. Manuelle Oudar, Quebec as well. Today, I am replacing Senator Kingston.
[English]
Senator Wallin: Senator Pamela Wallin from the province of Saskatchewan. I’m filling in for Senator Ross today.
[Translation]
Senator Hébert: Good morning. Martine Hébert, District of Victoria, Quebec.
The Chair: Thank you very much.
Honourable senators, today we begin our study on the Main Estimates for the fiscal year ending March 31, 2027.
For our first panel, we are pleased to welcome from Global Affairs Canada, Shirley Carruthers, Assistant Deputy Minister and Chief Financial Officer, People and Corporate Management Branch; and Chantal Aubin, Director General and Deputy Chief Financial Officer, Financial Planning and Management. From Environment and Climate Change Canada, we welcome Kurt Chin Quee, Chief Financial Officer and Assistant Deputy Minister, Corporate Services and Finance Branch; and Tara Shannon, Assistant Deputy Minister, Canadian Wildlife Service.
Welcome and thank you for accepting our invitation to appear today.
We will now hear opening remarks from Ms. Carruthers and Mr. Chin Quee.
You will have four or five minutes each. We will then move on to the question period.
The floor is yours, Ms. Carruthers.
[English]
Shirley Carruthers, Assistant Deputy Minister and Chief Financial Officer, People and Corporate Management Branch, Global Affairs Canada: Good morning and thank you for the invitation to appear before the committee. It is a great opportunity to be here to discuss Global Affairs Canada’s Main Estimates.
Before I begin, I want to acknowledge that I am speaking from the traditional and unceded territory of the Algonquin Anishinaabe people. I am deeply grateful for the privilege of being present on this territory.
I am joined today by Chantal Aubin, Director General of Financial Planning and Management and Deputy Chief Financial Officer, Global Affairs Canada. I would be pleased to answer your questions after my brief opening comments.
[Translation]
Mr. Chair, I would like to begin by highlighting the breadth of our mandate. Under the leadership of three ministers and a secretary of state, Global Affairs Canada is responsible for advancing Canada’s values and interests on the global stage. This includes diplomacy and foreign policy, international trade, international assistance and consular services, all within an increasingly complex international environment.
[English]
Global Affairs Canada leverages its global footprint and expertise to advance Canada’s interests and engagement in priority areas. With a network of 182 missions in 112 countries, including in some of the most complex and high-risk environments, the department is realigning its operating model through the current workforce adjustment to strengthen risk management and operational resilience and to ensure that resources are deployed where they deliver the greatest impact. This work supports Canada’s foreign policy and trade objectives and enhances the department’s ability to assist Canadians abroad.
Through the Main Estimates, Global Affairs Canada is seeking $7.2 billion in funding, representing a net decrease of $1.2 billion compared to the 2025-26 Main Estimates of $8.4 billion. This reduction is mainly due to the sunsetting of several programs, including Canada’s 2021-26 international climate finance and international humanitarian assistance priorities, as well as the Government of Canada’s Comprehensive Expenditure Review, which is intended to ensure that public spending is responsible, cost-effective and focused on delivering results for Canadians.
[Translation]
Much of the funding requested through these Main Estimates will contribute to ensure Canada tackles its commitments towards advancing free trade negotiations, expanding defence opportunities and equipping Canadian businesses to be successful in global markets. It will support Canada’s collaboration with trusted global partners and allies through targeted engagements to advance peace and security and support Canada’s prosperity, stability and strategic autonomy, enabling Canada to demonstrate both to its citizens and the global community that its actions can significantly contribute to addressing pressing international crises.
[English]
Significant funding decreases include: $560.8 million related to the Comprehensive Expenditure Review, consisting of a $415.1-million decrease across all our core responsibilities and $145.8 million in sunsetting funding, including $122.4 million tied to Canada’s International Biodiversity Program; $384.1 million related to Canada’s 2021-26 international climate finance commitment; $200 million related to additional international humanitarian assistance funding; $112.4 million related to time-limited funding for the presidency of the 2025 G7 Leaders’ Summit in Canada; and $64.2 million related to reductions stemming from the refocusing government spending exercise.
These funding decreases are offset by the following significant funding increases: $55.9 million related to the reinvestment of revenues from the sale or transfer of real property; and $51.6 million related to improving Global Affairs Canada’s International Assistance Innovation Program.
[Translation]
The funding requested through these Main Estimates will support Canada’s strengthened political and economic engagement internationally, while maintaining Canada’s leadership in international assistance. Global Affairs Canada remains committed to measuring performance, reporting results to Parliament and Canadians, and exercising responsible financial management to deliver on its mandate and uphold the highest standards of service, particularly for Canadians requiring consular assistance abroad.
[English]
Thank you. We would be pleased to address any questions that committee members may have about these Main Estimates.
[Translation]
The Chair: Thank you very much.
Mr. Chin Quee, the floor is yours.
[English]
Kurt Chin Quee, Chief Financial Officer and Assistant Deputy Minister, Corporate Services and Finance Branch, Environment and Climate Change Canada: Thank you for your introduction, Mr. Chair. Honourable senators, I’d like to first acknowledge that we are meeting on the traditional territory of the Anishinaabe Algonquin Nation.
I’m pleased to be here at the Standing Senate Committee on National Finance with my colleagues to discuss the 2026-27 Main Estimates for Environment and Climate Change Canada. As members of the committee are aware, the Main Estimates present the government’s initial spending authorities for the fiscal year.
I will begin with a brief overview of our 2026-27 Main Estimates, and then my colleagues and I would be pleased to respond to any questions the committee may have.
The 2026-27 Main Estimates total about $1.71 billion, which is a decrease of around $1.41 billion or 45.3% from the 2025-26 Main Estimates. The reduction in these estimates largely reflects a few key shifts. There’s reduced statutory spending for the distribution of revenues from fuel charge payments and excess emissions charge payments under the Output-Based Pricing System.
There was a one-time payment last fiscal year for the Our Land for the Future Trust — Northwest Territories Project Finance for Permanence. Plus, there’s the sunsetting of several temporary initiatives, such as Enhanced Nature Legacy, international climate finance and the Chemicals Management Plan.
[Translation]
In addition, the Government of Canada launched the Comprehensive Expenditure Review exercise in 2025 to fulfill its commitment to responsible and cost-effective spending. This effort focused on identifying programs and activities that were not core to departmental mandates or not aligned with government priorities. I’m talking about winding down noncore or completed initiatives; unallocated funding in programs; and internal efficiencies rather than frontline service delivery.
Workforce adjustments are also being managed through attrition and established processes. To support the Government of Canada’s commitment to responsible, cost-effective spending that delivers results for Canadians, the department will contribute $236.8 million in 2026-27 through the review exercise.
Let me be clear — this is not about cutting core operations. Despite a significant year over year decrease, the department’s focus remains firm — within a more disciplined fiscal framework. Weather and environmental prediction services continue steadily.
Pollution prevention and regulatory enforcement remain active across the country. Partnerships with Indigenous communities also remain a priority. In fact, more than a quarter of our grants and contributions support Indigenous recipients.
Several temporary initiatives concluded in 2025-26. We are currently seeking renewals for many of these. If approved, they will be reflected in future estimates.
[English]
The department’s 2026-27 Main Estimates include $342.9 million in voted grants and contributions composed of $5.1 million in grants and $337.8 million in contributions.
This includes grants such as $2.8 million for the implementation of the Montreal Protocol on Substances that Deplete the Ozone Layer and $2.1 million for action on clean growth and climate change.
It also includes contributions such as $186.6 million in support of conserving nature; $99.8 million for the Low Carbon Economy Fund; and $28.5 million for action on clean growth and climate change.
At the same time, we are moving forward on new and ambitious priorities. On March 31, 2026, for example, Prime Minister Mark Carney announced A Force of Nature: Canada’s Strategy to Protect Nature — a plan to protect Canada’s lands and waters and strengthen biodiversity. The strategy includes an investment of over $3.8 billion over the next five years to protect 30% of Canada’s lands and waters by 2030. While the numbers may shift year to year, our direction is steady — sustained services, strong partnerships and strategic investments in Canada’s environmental future.
I’m going to stop here. I’m happy to take questions now from members of this committee. Thank you.
[Translation]
The Chair: Thank you very much. We will now move on to questions.
Senator Forest: Thank you for being here this morning and enlightening us.
My first question is for Ms. Carruthers.
Global Affairs Canada will restructure its emergency preparedness services and modernize its consular services to reduce costs. We’ve seen how important Global Affairs Canada is when it comes to emergency situations in the current global context.
Ms. Carruthers, you told a parliamentary committee that the budget cuts will have an impact on consular services and that some services will now be provided online. Can you give us some examples of services that people will have to access online?
[English]
Ms. Carruthers: I can give you a couple of examples. I think you may be referring to another committee appearance I had where I stated that we would be reducing our consular services. In fact, we will not be reducing our consular services. We will be changing the way we deliver our consular services. Moving forward, we will be using a new digital service window. It will basically modernize the way Canadians are able to access, deliver and manage these services. When we’re talking about what would actually be available online, it would be more of the routine-type transactions just to automate some of the triage and the routing. Any of our more complex consular cases, for example, would continue to be in person.
[Translation]
Senator Forest: Do you think these amendments will simply maintain the existing level of services or will they improve accessibility for Canadians in emergency situations?
[English]
Ms. Carruthers: I would say that, in general, it would actually improve service delivery. If we think about the way our services are delivered currently, we obviously don’t have in‑person services in every single country around the world. Yes, we do have a very broad global network in 112 countries, but this would be for people who perhaps aren’t in the city where we actually have a consulate or a mission. They would be able to access these services through the digital service window.
[Translation]
Senator Forest: Mr. Chin Quee, at a time when we want to promote investment, reduce costs and eliminate duplication in environmental assessment — which makes a lot of sense — Quebec is asking to be solely responsible for environmental studies for major projects in your territory.
What is the status of the negotiations? Are they progressing well or are there issues that they are not progressing on?
[English]
Mr. Chin Quee: Perhaps I could turn to one of my colleagues to see if there are details on that.
[Translation]
Tara L. Shannon, Assistant Deputy Minister, Canadian Wildlife Service, Environment and Climate Change Canada: Are you talking about the caribou issue?
Senator Forest: No, I’m talking about all issues, since our objective is to simplify all the studies. I’m not talking specifically about the caribou issue.
Ms. Shannon: I can speak to the caribou issue and the agreement we have on the nature issue.
Senator Forest: My question is not specifically about the woodland caribou issue, but about all issues, given the desire to simplify all the studies.
Let me put my question another way: Is the federal government prepared to accept that Quebec be solely responsible for environmental studies for major projects on its territory?
Ms. Shannon: Okay. I understand your question better.
[English]
For the Department of the Environment, when we approach environmental issues with the Province of Quebec as well as with other jurisdictions across the country, our approach is — I can speak from the perspective of species at risk, for example — one of shared jurisdiction. I think that as a department, we would approach any negotiation or any file with Quebec linked back to the source of the authorities and whether those authorities are shared between the jurisdictions or the competence of either Canada or the respective jurisdiction.
Senator Wallin: Thank you very much. First, Mr. Chin Quee, I have a broad question.
Given the Prime Minister’s announcement on the Force of Nature strategy, given what we have heard in the news about the Alto high-speed rail project and given recent political and court decisions in British Columbia on property and landownership issues, where does the money for perhaps necessary expropriation come from in your budget?
Ms. Shannon: I will speak from the perspective of the Force of Nature announcement. We don’t deal with expropriation in the context of our programming, so there’s no budget for expropriation of lands. I don’t know if you’re speaking about the general 30% by 2030 commitment.
Senator Wallin: I’m talking about more land that is going to be owned or expropriated by somebody. Who pays for it?
Ms. Shannon: I will not speak to a specific major project because it’s not what the nature strategy addresses. Any questions around a major project or any impacts on lands would have to be dealt with by whoever is the lead for that.
For the 30% by 2030 commitment and the approach to achieving that objective, we do that in partnership with private landowners and land organizations that cooperate with private landowners, provinces and territories. There’s no expropriation of land.
Senator Wallin: You’re hoping. All right. I’ll turn my next questions to Ms. Carruthers regarding the two parallel tracks on the trade front. The Canada-United States-Mexico Agreement, or CUSMA, negotiations are proceeding in some way. We’ve now added a whole other approach, which is the Prime Minister’s suggestion that he would lead a middle powers group to look at other issues. Again, our money is being redirected from the CUSMA file to that file.
Ms. Carruthers: Thank you very much for that question. In fact, at Global Affairs Canada, we do have a very ambitious trade agenda in front of us.
I will note that we did receive some new funding for some of our trade initiatives through Budget 2025, but it’s specifically for the increase in terms of the overall negotiation of various trade agreements. I have a long list of different places where we’re actually undertaking those negotiations. We’re actually reallocating a lot of the funding internally. Within this current fiscal year, starting the year, we’re cash managing or absorbing roughly $17 million from our existing. That’s not to say that, in the future, we may not have to go forward in terms of requesting additional funding, but at this point, with the importance of the trade file, we have taken steps to be able to do some internal reallocation and reprioritize some of our funding.
Senator Wallin: There have also been reports of late about the need across the U.S. through consulates and so forth to hire outside contractors for communication. Is that again being reallocated from existing budgets?
Ms. Carruthers: Yes, it is.
Senator Wallin: Thank you.
[Translation]
Senator Gignac: Welcome to the witnesses.
We can see that this government wants to further diversify its markets. I see that there are significant cuts. Can you tell us more about Global Affairs Canada’s efforts in this regard?
Are there systematic cuts across all missions, or are some missions being favoured over others? I’m thinking of Southeast Asia in particular.
[English]
Ms. Carruthers: Thank you very much. With the Comprehensive Expenditure Review, it was a fairly substantial reduction to Global Affairs Canada’s reference levels of $1.1 billion, so we did need to look at reductions across our entire portfolio, which is all of our different lines of businesses, including in Ottawa as well as abroad. We did take a look at our mission network, recognizing that there is a large fixed cost or a large cost to owning buildings around the world.
We will move forward with some reductions in terms of the locations that we’re in, but I would call it more of a consolidation. It would be consolidating places, for example, where we have a small office in one area within a country and allocating some of those resources in the embassy at the capital, for example, so that they can provide services from that location. Obviously, you’re citing the Indo-Pacific and other places in regions of importance. Of course, those were prioritized in terms of our overall reduction.
[Translation]
Senator Gignac: The resources allocated to the economic cooperation secretariat for Southeast Asia do not even reach the $1-million threshold, whereas at the United Nations, everyone agrees that the organization is much less efficient and effective than in the past, in this new world of disruption that Mr. Carney alludes to.
We’re talking about $150 million or so on the UN side. That’s an increase of $25 million over the past two years.
Does Global Affairs Canada intend to reassess — not Canada’s diplomatic presence, since we must remain at the table — the extent of the efforts and financial resources invested in an organization whose impact seems to have considerably weakened in this new world order?
[English]
Ms. Carruthers: Absolutely. When you’re referring to those increases to UN spending, they are largely related to currency adjustments and our share in those organizations.
In terms of our overall assessed contributions, Canada does receive a bill at the end of every fiscal year for our memberships, and those memberships are based on our assessed share, which is related to the overall budget of those organizations. Canada is a strong proponent in trying to ensure that these organizations maintain a zero nominal increase in terms of the overall budget so that our assessed share does not creep up, as you mentioned. In terms of the overall increase, it’s basically between the currency difference — because we pay them in foreign currency — as well as the assessed share.
Senator Gignac: We can do nothing. Basically, we receive the bill, and this is our fair share compared to other countries.
Ms. Carruthers: This is our fair share, and it’s not that we can’t do anything. Again, we do advocate to ensure that the organizations maintain similar-sized budgets and don’t have that creep up, where that’s passed on to Canada and other countries. That’s basically what we’re doing.
Senator Gignac: Is it the same approach for the Organisation for Economic Co-operation and Development?
Ms. Carruthers: Yes. In the context of the Comprehensive Expenditure Review, we did take a hard look at all of our organizations just to ensure that our membership is something that is still providing a lot of value to Canada and Canadians.
Senator Gignac: Thank you.
[Translation]
Senator Dalphond: Welcome to the Standing Senate Committee on National Finance.
The Main Estimates are really modest when compared to the 2022 ones, which totalled over $7 billion. They even reached just over $8 billion in 2024-25.
The proposed Main Estimates are much more modest. They’re below $7 billion. That’s a reduction of almost 15%. I understand that the government’s objective is to make 15% reductions everywhere.
Can we rely on the Main Estimates as a good indicator of what will happen this year, or should we expect supplementary estimates that will bring us back to the previous year’s level?
[English]
Ms. Carruthers: Thank you very much. I don’t think we will have other requests this fiscal year that will bring us back to prior year levels, but that just depends. Basically, between the last fiscal year and this fiscal year, there are a few different reductions that play into the reductions. Obviously, one is the Comprehensive Expenditure Review. The second would be sunsetting funding, the highest of which would be the sunsetting of the climate finance envelope, which is quite significant. That would contribute to a large portion of the overall decrease.
In terms of climate finance, the government is still deciding on what the next instalment of the climate finance commitment would look like. So we just wait to see. If we do receive additional funding, then we would bring it in through the estimates process.
[Translation]
Senator Dalphond: There are indications that there will be staff reductions from 13,185 to 11,760 full-time positions, a decrease of about 11%. Will that take place mostly in Canada, in Ottawa, or across the whole network?
[English]
Ms. Carruthers: These cuts will be in Ottawa as well as across the mission network. Given the nature of our overall operations, it was important for us to look across the board, given the significance. It’s roughly a 50-50 split between Ottawa and missions abroad. There’s also a difference between reductions to Canadian-based staff and locally engaged staff.
[Translation]
Senator Dalphond: When it comes to this reduction from 13,185 to 11,760 positions, does that include part-time employees in embassies, consulates and delegations around the world, whose contracts may not be renewed?
[English]
Ms. Carruthers: Yes, it does.
Senator Dalphond: What would you expect to be the impact on services?
Ms. Carruthers: In terms of service delivery to Canadians, I would say from our consular envelope, for example, the reductions you will see are related to the modernization initiatives that we spoke about earlier. There is also a reduction in resources from our development assistance portfolio. Our development budget is the largest portion of the overall budget within the department, so it represents approximately 63% to 65%. Obviously, the biggest share of our reduction from the Comprehensive Expenditure Review came from that envelope as well. Some of the reductions that you see would be for folks working on development projects on the ground in those countries, given the reduction to our overall budget.
Senator Dalphond: What was the size of the envelope for the international climate finance commitment? Is that the program that was coming to an end this year anyway?
Ms. Carruthers: Exactly, it was coming to an end this year, and I do have the numbers. Overall, for the five-year commitment, it was $5.3 billion, so at the beginning of this fiscal year, I believe, the reduction we have in these estimates is $384 million, but last fiscal year, we brought additional funding into our budget. If you think about the spending from last year versus basically our budget this year, it’s a difference of $1 billion.
[Translation]
Senator Oudar: It’s my turn to ask Global Affairs Canada some questions, specifically about your 2026-27 Departmental Plan.
We agree with the objectives of the plan, which will do the following:
[ . . .] will enhance our country’s security, strengthen its sovereignty and drive its future prosperity. The world is changing—and Canada is ready to meet the moment.
A close look at the plan reveals a streamlining of the departmental framework. Let me explain. In your departmental plan, you state that the departmental results framework “was streamlined.” We are talking about not just services, but indicators and core responsibilities. We went from five core responsibilities to two, from 16 departmental results to only 5, and from 46 indicators to 28.
Can you tell us specifically about those two core responsibilities? How can we achieve those objectives when there’s a reduction in not only our indicators, but also our targets?
[English]
Ms. Carruthers: Thank you very much. One of the reasons why Global Affairs Canada decided to actually change our core responsibilities and the way we’re reporting in our Departmental Plan was to support a more integrated approach to our results and our narrative around diplomacy, trade and consular functions. Basically, Global Affairs Canada was amalgamated — the former Department of Foreign Affairs and International Trade with the former Canadian International Development Agency — approximately 10 years ago, so it was really about taking another look at how we were reporting to be more integrated in the approach and ensuring that we weren’t, as an organization, thinking about our results in a siloed fashion. We also found that with the way we had our indicators, it was very hard for us to tell our story to Canadians. We recognize that we have a very important mandate, but I think it’s one that is very difficult sometimes for Canadians. We wanted it to be clearer to Canadians what it is that the Department of Global Affairs Canada is doing on their behalf.
This was really our attempt to kind of simplify the way that we report on our results and also to provide our narrative.
[Translation]
Senator Oudar: Thank you for that clarification. Under “Core responsibility 1: Advancing Canada’s interests and addressing global challenges,” we see that the target in the departmental result indicator “Ranking of Canada’s image abroad as reported in global opinion poll” has decreased. The 2025-26 target is five, whereas it was higher in 2024-25. I don’t want to list all the targets, but if we look at the number of commercial agreements facilitated, the 2022-23 targets were far higher than the one for 2026-27.
I listened to your first answer. It’s difficult to reconcile the lower targets with much more ambitious objectives. How do you explain that to the committee and to Canadians?
[English]
Ms. Carruthers: I would have to go back to the plan to look at the exact targets you’re referring to, but I can see why you’re raising this as a potential challenge. Perhaps I can get back to you in writing in terms of why those specific indicators were reduced.
[Translation]
Senator Oudar: Okay. To be specific, I am looking at the number of commercial agreements facilitated in your indicator in the departmental plan.
I have a quick question about one of the plans to achieve the targets. I am a vice-chair of the Canada-Africa Parliamentary Association. I’d like to hear you specifically talk about one of the plans to achieve the targets. You state the following:
Implement Canada’s Africa Strategy through tailored engagement with African countries and institutions and the advancement of concrete, mutually beneficial, opportunities in key sectors.
What exactly do you mean by “the advancement of concrete [. . .] opportunities”?
[English]
Ms. Carruthers: Thank you very much. I think this is something that the department is actually looking to do not only in Africa but in all of our missions abroad with our development assistance. We really want to make sure that our development assistance reflects Canadians’ interests and values, but at the same time, we are refocusing our international assistance to advance shared priorities with our partner countries, including Africa, to advance economic prosperity, trade, inclusive growth and private sector investment. With these shifts and, again, understanding that we want to make sure that it continues to reflect Canadians’ interests, gender equality will always be a primary aspect in terms of our programming.
[Translation]
Senator Hébert: I’m going to pick up on what Senator Oudar said about Africa. That’s a good example when it comes to the need for Canada to double its exports outside the United States. That also means supporting our high-potential players in major projects in African countries. There are concrete examples in Africa right now: for example, Simandou and Noor Ouarzazate, where Canadian and even Quebecer players are already involved.
What strategy will you implement in our missions abroad to be able to support our high-potential players? It’s not that I don’t want to provide services to SMEs, but if we want to move the needle on exports, we have to talk to high-potential players. What strategy are you implementing, and what are the envelopes for supporting major Canadian players in these markets, in these major overseas projects, Africa being one example among other continents?
[English]
Ms. Carruthers: Thank you very much. One of the tools that we use in order to help leverage our overall dollars and make them go a bit further is our International Assistance Innovation Program. Under this program, we use concessional loans in order to leverage investments and mobilize from the private sector. As you’re aware, I think that a lot of our international development systems are under strain due to reductions that have happened in several countries. This is one way we can actually make our development dollars go a bit further. Obviously, it’s only one tool in our tool kit in terms of our International Assistance Innovation Program. We give out concessional loans, which are basically loans that are of a greater duration, where maybe the payback is 30 years instead of a smaller amount of time, such as 10 years, and it also provides a lower interest rate, so this really de-risks investments in countries where things may otherwise not be able to mobilize dollars from private industry.
[Translation]
Senator Hébert: Just so I understand, Ms. Carruthers, is the program you’re talking about administered by the Canadian Commercial Corporation?
[English]
Ms. Carruthers: There’s a piece of this program included in Global Affairs Canada, so it started as a pilot program in 2018. We revisited the program a couple of years ago during the refocusing government spending exercise. At that time, what we did was we looked at the progress and how things were going with the program, and we decided to transfer some of that funding to FinDev Canada, so FinDev has a portion of the funding as well. Their mandate is a little bit different than our mandate. For our mandate, we’re moving forward. We’ll be looking at smaller repayable grants and trying to help those — I’m going to say — lower middle-income countries, whereas FinDev would be looking more toward market-ready investments that are closer to being ready to scale, and that would be their focus and would be more in medium-income countries.
[Translation]
Senator Hébert: Precisely to move the needle on exports in Quebec — and I can speak to this because I was a delegate general specifically for Quebec in New York, and I worked with your teams on the ground — the Government of Quebec undertook what it called an economic shift within its delegations. That encouraged better coordination between a body called Investissement Québec International and Investissement Québec. There were even alignments with the Caisse de dépôt et placement du Québec to try to stimulate action on the ground.
Is Global Affairs Canada taking any similar actions regarding the various bodies involved in your services, at the level of Export Development Canada and at the level of the Canadian Commercial Corporation, which is there to mitigate the risks of major contracts?
[English]
Ms. Carruthers: Absolutely. In fact, in these Main Estimates, you’ll see that we do have a decrease, and that decrease is related to funding that Global Affairs Canada is transferring to Export Development Canada. This funding will allow Export Development Canada to deploy concessional financing to Ukraine government entities for the purchase of Canadian goods, for example, and there will be no impact on the fiscal framework because the full amount of this funding that was announced in Budget 2025 would come from Global Affairs Canada’s international assistance envelope, but we do work with the Canadian Commercial Corporation as well and others.
Senator Pupatello: Good morning. I wanted to ask similar questions around the support for small businesses to export, and my own experience in Ontario was such that small- and medium-sized companies have to invest a lot of time and money to make multiple trips to these new markets where the government is hoping we can expand and double and triple our exports. For example, lately India is much happier to see Canadians showing up and wanting to participate in their economy. The trouble is it’s very expensive; you have to go repeatedly to engage and make long-lasting relationships and build trust to finally do business. Some old programs that we had in Ontario involved partnering with groups like the Ontario Chamber of Commerce that would run a trade program for us that actually supported the level of actual costs, such as plane tickets and this type of very practical support. I just don’t know what exists at your level that will get into the weeds like that to actually help businesses where they need it the most.
These long-term 30-year programs are great for big companies that are already doing business internationally and don’t tend to need our help. For these little guys that we’re trying to launch and get to export, they really do need in the thousands and that level of support. Typically, with government, it’s easy to find big dollars and very hard to find small dollars. In this instance, the kind of support required is in the thousands for these small, fledgling companies that have been clearly vetted for a real opportunity by staff, including your staff, in these various markets.
Despite the cuts you have to find because of the exercise, is this program existing somewhere that various organizations can get to in order to actually help on the ground with these small companies?
Ms. Carruthers: Absolutely. We do have a CanExport program within our department. We have some existing funding within these Main Estimates — and maybe Ms. Aubin can find the amount listed in our contributions — but we also have some new funding coming in that was announced in Budget 2025. We will be accessing this funding through the Supplementary Estimates (A), and within that overall amount, for revitalization of CanExport market diversification for small- and medium-sized enterprise associations, we have $7.5 million in our grants and contributions funding, as well as $4 million in operating expenditures. What this funding would do would be to help small- and medium-sized businesses with their market diversification.
As I mentioned, we also have other funding within the department; this would be something that would augment. During our Comprehensive Expenditure Review, we did make reductions across all of our business lines, but, obviously, when we looked at our trade portfolio in particular, we did limit those reductions to areas that are of lesser importance, such as some of the back office functions and consolidating teams. We did reduce one of our CanExport programs, but it was for intellectual property, and that was one of our programs within CanExport where it wasn’t fully subscribed any annual year, so it wasn’t really meeting the requirements of Canadian businesses.
Senator Pupatello: Just on Africa, please, can you describe whether your department works by sector? For example, while Chinese companies are moving into Africa in a big way and really getting a foothold in the areas that could have been opportunities for Canadian mining companies, does the mining sector, like Natural Resources Canada, get into that level of detail or is that through your offices? How are you connected sectorally with your other colleague departments and then doing work on the ground so that we can see we’re not closing the door on opportunities for Canadian companies by sector?
Ms. Carruthers: I would say this is something we want to do more of in the future. In our previous development spending, we had focused a lot on our Feminist International Assistance Policy, or FIAP, investments. This would be things that would go toward gender equality and global health. We have a large global health commitment, but under that commitment, we were spending roughly 45% to 50% of our overall aid budget in Africa on an annual basis. Moving forward, again, we are going to be looking to do more trade-development-nexus-type programming in our countries and looking to see where we can look for things that are going to be mutually beneficial to both Canadians and the countries that we disperse our aid in.
[Translation]
The Chair: I have a question for Environment and Climate Change Canada.
Mr. Chin Quee, let us compare the actual expenditures of $2.965 billion in 2024-25 with the budgeted expenditures of $3.134 billion in 2025-26. The current budget is $1.711 billion. That’s a substantial reduction in the budget. That seems to stem from the reduction in grants and contributions, which alone accounts for nearly $700 million in reductions. Can you explain the reasoning behind that?
[English]
Mr. Chin Quee: There is a significant reduction in our funding in the Main Estimates for 2026-27 versus 2025-26. This is explained by a few things. One, there’s a few statutory funding. The largest amount is a reduction of $466.5 million related to the distribution of revenues from fuel charge payments. This was a program where the objective was to return a portion of fuel charge proceeds to Indigenous governments in recognition of the impacts of climate change on Indigenous communities. At this stage, the fund is essentially almost fully allocated, so that explains a large portion of why there was more funding in 2025-26 versus 2026-27.
There was also another statutory program that experienced a large decrease of $64.1 million for the distribution of revenues from excess emissions charge payments under the Output-Based Pricing System. This was funded from proceeds collected through the federal Output-Based Pricing System in provinces where the federal system has been applied and was not requested. There is still some funding left, and we continue to collect amounts, but it’s statutory funding, and the amounts vary over the years. That accounts for another significant portion.
Also, something that was in 2025-26 which is not here in 2026-27 is we made a large, one-time $300-million grant payment to the Our Land for the Future Trust — Northwest Territories Project Finance for Permanence. This was an Indigenous-led land conservation initiative. The funding was used to support the establishment and ongoing operations of the trust and to provide long-term endowment funds for disbursement to protected and conserved area establishment, management and related nature conservation action while advancing Indigenous-led conservation. There are some reductions related to some funds, one-time payments and some funds where the balance has naturally decreased.
Also, on top of that, there is some sunsetting funding that sunsetted in 2025-26 and is not present in 2026-27. The largest portion relates to the Enhanced Nature Legacy file to the tune of $381 million. Then there are a number of other programs that have sunset.
For a number of these programs, we are in the process of seeking renewal, and should we get approved, you will see that funding appear in future supplementary estimates. A good example is the recent Force of Nature strategy that the Prime Minister announced. That will be funding that we will be looking to draw into our reference levels to supplement the sunsetting of the nature funding.
[Translation]
The Chair: Thank you very much.
Among the cuts, I’m surprised to see a reduction in contributions for the Counter-Terrorism Capacity Building Program. We had $19 million in actual expenditures, and that has been reduced to $7 million. There’s another reduction that concerns the Anti-Crime Capacity-Building Program. Actual expenditures of $12 million have been reduced to $5 million. Those may seem like small amounts, but given the role of Global Affairs Canada in intelligence and in the prevention of terrorist activities abroad, it’s still surprising due to the current security concerns.
Why are there reductions to this kind of prevention activity abroad? This is done abroad, but it could well affect our national security here in Canada.
[English]
Ms. Carruthers: Thank you very much for the question.
The reduction that you’re referring to was actually something that we had committed to during the refocusing government spending exercise, which was a couple of years ago. I can’t remember the exact reason why that program was reduced. I could get back to you.
I believe it had something to do with the fact that a portion of the funding that we had within our reference levels was something that another government department was actually doing, so there was a bit of a duplication.
Again, I can confirm because my memory may have gotten that one a little bit wrong.
[Translation]
The Chair: I have a similar question about larger amounts in terms of the International Development Assistance Program. In 2025-26, there is $717 million, and the budget is $388 million. That’s a reduction of around 40% to 45%. That seems to be a significant withdrawal from international assistance on the part of the Canadian government. Have I read that correctly, or will there be supplementary estimates to make up for that difference?
[English]
Ms. Carruthers: Yes, exactly. In terms of the reduction to the international assistance envelope, for the Comprehensive Expenditure Review, the reduction is roughly 18% of the overall envelope, so it is a little bit above the 15% that we were mandated for reduction. That would have been that reduction.
However, we also had a couple of programs that were sunsetting between the last fiscal year and this fiscal year, and one of those is the climate finance funding envelope that we spoke about a little bit earlier. That is quite a large envelope of $5.3 billion over five years, so that’s a big decrease. Again, we are hopeful that this funding would be renewed in future years to augment our budget.
In addition, in the last fiscal year, we received an additional $200 million for humanitarian assistance. Humanitarian assistance, as you know, is something that is crisis-driven, and because of events around the world, there was a requirement to receive additional funding for humanitarian assistance, which is very responsive. Should the requirements around the world become more than what we have funding for within our existing reference levels, then that could be a possibility. But we do have roughly $800 million within our existing reference levels, specifically for humanitarian assistance, including our base reference level, and there’s $200 million that we have access to through something we call the crisis pool.
[Translation]
The Chair: Thank you very much.
[English]
Senator Wallin: I have a question for Mr. Chin Quee, please.
Can you compare — regarding what the actual figures are, as I can’t sort it out myself here — the income from the consumer carbon tax versus what will be the intake from the industrial carbon tax? Is there an A and B there that we can look at?
Mr. Chin Quee: Are you referring to the Output-Based Pricing System?
Senator Wallin: Well, if that’s how it’s all encompassed, yes. I’m going to use the other language, which is that we had income coming from the consumer carbon tax, and now that has been reduced to a zero level, and we have the industrial carbon tax.
Is there any way to compare those figures?
Mr. Chin Quee: I do apologize. I don’t have those details at hand, but we would be happy to get back to you with those details.
Senator Wallin: Okay. I have a couple of other questions on organizations. It’s really a general question, I think, about assessing the impact of a lot of the climate initiatives and how you go about that.
We were just discussing one the other day: It’s the $30 million for the Canadian Climate Institute, and it seems to be there to say that the government is doing a good job or the government is not doing enough of a good job. It seems that it’s more public relations than the actual impact on the environment.
Can you tell us how you look at that and how you justify that?
Mr. Chin Quee: I don’t have the specific details on that particular program or recipient that you’re referring to, but I will say that each of our grants and contributions programs has very rigorous and well-developed terms and conditions, and that includes criteria on eligibility and the purpose of the funds. It does go through a very rigorous process to review and to approve funding.
There is also a very robust, regular audit and evaluation function that we have that regularly reviews these programs to assess their relevance as well as what is actually happening with regard to how the money is going out and some of the controls around that. We do have a Grants and Contributions Centre of Expertise that also conducts recipient audits and does spot checks on different programs —
Senator Wallin: But would it be acceptable for climate funds to be used to promote the climate issue or the government’s behaviour as opposed to actually impacting the climate?
Mr. Chin Quee: I do apologize. I don’t have the details on that particular item, but we can get back to you on that.
Senator Wallin: On the $466.5 million related to fuel charge payments to Indigenous groups, again, was that money because we’ve impacted your environment as well as everybody else’s environment, or was it for specific programs that the Indigenous community was going to engage in to actually impact the environment?
Mr. Chin Quee: The program was implemented in recognition of the impacts of climate change on Indigenous communities. It’s largely wound down, but the funds have been distributed through a grant program that was federally recognized by First Nations, Inuit and Métis.
I think my colleague Ms. McDermott, perhaps, has additional details on this one.
Alison McDermott, Assistant Deputy Minister, Strategic Policy and International Affairs Branch, Environment and Climate Change Canada: Mr. Chin Quee, you really covered the issue. These are transfers going to Indigenous communities and are really treated as sums of money as opposed to a program with criteria. We called it a program, but it was really about allocating those proceeds to communities.
The purpose of providing this return was to recognize some of the additional challenges of the cost of the fuel charge which, as you know, has been removed. That is why the funding for that is coming to an end, and you’re seeing that those amounts will go down in the future fiscal year.
[Translation]
Senator Hébert: My colleague Senator Pupatello has already touched on this. It was on sectoral strategies. Thank you.
The Chair: Honourable senators, we are pleased to welcome for our second panel today, from the Treasury Board of Canada Secretariat, Antoine Brunelle-Côté, Assistant Secretary, Expenditure Management Sector; Louis Charland, Executive Director, Expenditure Strategies and Estimates Division, Expenditure Management Sector; Annie Boyer, Assistant Secretary and Chief Financial Officer; Carole Bidal, Senior Assistant Deputy Minister, Employee Relations and Total Compensation; and Mike MacDonald, Acting Chief Information Officer of Canada.
Welcome and thank you for accepting our invitation to appear today.
We will now hear Mr. Brunelle-Côté’s opening remarks.
Mr. Brunelle-Côté, you now have the floor.
Antoine Brunelle-Côté, Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat: Thank you, Mr. Chair and senators.
I would like to begin by acknowledging that the land on which we are gathered is the traditional unceded territory of the Algonquin Anishinaabe people.
I am pleased to be here today, alongside my colleagues, to speak to you about the 2026-27 Main Estimates. Overall, the Main Estimates provide information on $230.4 billion in voted spending and $272.4 billion in statutory spending, for a total of $502.8 billion in planned budgetary spending for 130 organizations.
[English]
The Main Estimates reflect previous funding decisions, such as initiatives announced in prior federal budgets, including $14.7 billion related to Budget 2025. The shift to tabling federal budgets in the fall allows for more planned spending to be reflected in both the Main Estimates and the Departmental Plans, helping to align the two documents more closely with the budget. Remaining funding from Budget 2025 and any subsequent funding decisions for 2026-27, such as any new funding announced in the spring economic update, will be included in supplementary estimates, three of which are planned for 2026-27.
[Translation]
Compared to last year’s Main Estimates, the voted budgetary spending is increasing by $7.5 billion, an increase of around 3.4%. This increase is almost entirely due to a significant rise in funding for the defence sector, in line with NATO targets. This includes increased funding for recruitment and retention, the purchase of equipment and facilities, as well as the new Canadian Defence Industry Resilience Program.
Outside of defence, there are increases in infrastructure, public transit and trade diversification.
The passage of Appropriation Act No. 1, 2026-27, or Bill C-24, resulted in $86.4 billion in voted funding presented in the Main Estimates. The remaining amount will be requested in the second appropriation bill for 2026-27, which will be introduced in June.
[English]
The Main Estimates also include forecasts of statutory spending to provide additional information on departments’ total estimated expenditures.
In comparison to the Main Estimates from a year ago, statutory budgetary spending increased by $8.4 billion to $272.4 billion, which is roughly a 3.2% increase.
The first year of approved reductions as part of the Comprehensive Expenditure Review has also been reflected in the Main Estimates. Details on these reductions are available in the individual Departmental Plans, which also explain other changes in resource levels, such as the end of time-limited funding or programs which are awaiting renewal decisions. I encourage you to consult the Departmental Plans, which are available for 91 organizations and provide additional information on program objectives and targets for upcoming years.
[Translation]
With that, Mr. Chair, we are ready to answer your questions.
The Chair: Thank you very much.
Senator Forest: Thank you. It’s always nice to have you here.
My first question is on spending reductions. The Main Estimates reflect the various initiatives announced in previous federal budgets, including the reductions approved as part of the comprehensive expenditure review and the documents that refer us to the 2026-27 Departmental Plan.
Is there a list of programs that have been eliminated? Can we get it?
Mr. Brunelle-Côté: The details that were provided on spending reductions as part of the cost reduction exercise are set out in Budget 2025. We have provided details in the departmental plan. That’s the level of detail we provided in terms of spending reductions. That’s where you will find the information.
Senator Forest: In fact, they haven’t been compiled. It’s necessary to find them in the budget document itself?
Mr. Brunelle-Côté: That’s right.
Senator Forest: The majority of expenditures for the 2026-27 Main Estimates are transfer payments, that is, transfers of amounts that are paid to other levels of government, to organizations or to individuals. Are transfer payments affected by the comprehensive expenditure review?
Mr. Brunelle-Côté: No. The comprehensive expenditure review is just for voted expenditures. The transfers you mentioned, particularly transfers to the provinces, are statutory programs that were excluded from our expenditure review.
Senator Forest: Let us talk about the infamous Phoenix file, which led to over $5 billion in spending 10 years ago now. Nearly $350 million has been invested to replace Phoenix. At the end of 2025, there were still 238,000 outstanding payment transactions.
Are there still any concerns about the transition to Dayforce? Is it going well? We know that this is the responsibility of Public Services and Procurement Canada, but Treasury Board also has a share of the responsibility for adjusting and simplifying the pay rules with the unions.
Where do things stand on this matter? The issue is rather concerning given the significant delays.
Carole Bidal, Senior Assistant Deputy Minister, Employee Relations and Total Compensation, Treasury Board of Canada Secretariat: Thank you for the question.
Indeed, the Treasury Board of Canada Secretariat remains committed to simplifying the pay rules in consultation with bargaining agents to ensure current transactions and facilitate the transition when there is a transition to Dayforce.
The process is under way.
Senator Forest: Do we know when the 238,000 outstanding cases will be processed? That’s still a significant number of cases, and it affects government employees. Do we have a time frame for when the slate will be completely clean and clear?
Ms. Bidal: I think our colleagues at PSPC would be in a better position to answer that question. For our part, we’re continuing to work very closely with them to prioritize files that have an impact on the public service as a whole.
Senator Forest: On page I-4 of the Main Estimates, there is a list of changes to authorities. Some are intuitively understandable, while others are a little more obscure.
For example, it says the following:
. . . the Department of Fisheries and Oceans is amending the wording of Vote 1 to remove authorities to expend revenues and make recoverable advances related to the Canadian Coast Guard . . . .
Does this mean that fees for marine navigation services will no longer serve to fund its own operations?
Louis Charland, Executive Director, Treasury Board of Canada Secretariat: Thank you for the question.
The new wording reflects the organizational change. The Canadian Coast Guard is now part of National Defence.
As for those authorities under Fisheries and Oceans Canada, they are no longer necessary. They are being transferred to National Defence. That’s what is reflected here.
Senator Forest: Is it because of the transfer of responsibilities?
Mr. Charland: It is.
Senator Forest: Thank you.
[English]
Senator Wallin: Thank you. Let me start with a very general question. In the last budget and with the new Prime Minister, we had a change in the language. How do you at the Treasury Board distinguish between what is spending and what is an investment?
Mr. Brunelle-Côté: Thank you for the question. It’s a very good question.
Our definition doesn’t change. What we’re reflecting in the estimates is the traditional definition of capital. We don’t change it because it’s linked to the Public Accounts of Canada. It’s the accounting rules, so we continue to follow the Canadian public sector accounting standards. We continue to use that definition of capital. The broader definition of capital is used in the budget and by the Department of Finance, but it has no impact on how we present the information in the estimates.
Senator Wallin: So spending is spending?
Mr. Brunelle-Côté: Spending is spending.
Senator Wallin: Thank you. There are a couple of references to the fact that spending oversight by the Treasury Board of other departments seems to have increased. What does that mean exactly? Is oversight something very specific where you go in and ask other departments, “Why are you spending that? Why are your numbers going up?” What is the definition of oversight?
Annie Boyer, Assistant Secretary and Chief Financial Officer, Treasury Board of Canada Secretariat: Thank you for the question. Spending oversight is one of our core responsibilities, and it’s mainly related to our central votes. There’s an increase here because there’s $1 billion that has been approved for Vote 50, which is the defence and investment central vote. It’s what mainly represents our spending oversight.
Senator Wallin: So it’s not specific? You don’t go in and ask, “What are you doing?”
Ms. Boyer: We are there to support other departments with multiple central votes. In that spending oversight, we have $6.4 billion in the Main Estimates mainly related to our central votes. I can go through them. Vote 5 is government contingencies. We have $1 billion put aside there. Vote 10 is government-wide initiatives. There are multiple initiatives under our responsibility as government oversight where we are there to support other organizations. I don’t know if my colleagues have anything to add.
Mr. Brunelle-Côté: Spending oversight is a broad definition. It’s not just the activities of us as oversight over the departments. It’s much broader because it includes the central votes.
Senator Wallin: There have been several new bureaucracies promised, and I guess they are in the process of being created. I’m thinking of housing and the organization that’s going to look at defence spending where outsiders have been brought in to head these organizations. How does that fit into this?
Mr. Brunelle-Côté: For all these new organizations, before they were set up, there was a Treasury Board submission. There was oversight over setting up these organizations. We evaluated the risk, risk management and the structure of these organizations. Depending on the nature of these organizations, we have an overview role in the spending of these organizations.
Senator Wallin: Have you had all of those presented to you in advance of their announcement? I’m thinking of housing and defence in particular.
Mr. Brunelle-Côté: It’s not necessarily in advance. Before any funding can be given to these organizations, we need to have discussions at the Treasury Board. They may have been announced beforehand. I don’t know the exact timing of when these were all discussed at the Treasury Board.
Senator Wallin: Thank you.
[Translation]
The Chair: Would it be possible to get more details? We, too, have an oversight role. When we see $6 billion for spending oversight but no details, it’s hard for us to do our work of overseeing expenditures.
Mr. Brunelle-Côté: We can easily explain to you the subcategories of spending, which include oversight of expenditures.
The Chair: Could you send us that in writing? Because it’s difficult for us.
Mr. Brunelle-Côté: No problem.
The Chair: Other organizations, such as Treasury Board, usually give us more details.
Thank you very much.
Senator Dalphond: I understand that your oversight role will be unique this year because we have already reviewed two departments, and so far, each has cut nearly 15% of its workforce and costs. However, you are increasing your costs. Is this a temporary increase to oversee this downsizing of the public service, or will it be permanent?
Mr. Brunelle-Côté: We have to look at the details because the devil is in the details.
Indeed, if you look at our estimates, you’re right, we have an increase of about $2 billion, which represents about 20%. However, that’s not an increase in our costs. We have complied with the exercise. Our operating and labour costs have been reduced by 15%, just like in all other departments.
The increase you see in the Main Estimates is due to two factors. First, there is the new vote 50 we discussed last time regarding the supplementary estimates. That adds $1 billion to our estimates. There is also an additional $1 billion for the increased cost of public insurance for public servants and eligible individuals. That explains the increase. These are not really our operating costs, which have decreased by 15% in accordance with the directives of the cost-cutting exercise.
Senator Dalphond: Thank you for clarifying.
In terms of oversight of the cuts made by the department, we see that the Main Estimates have dropped significantly in all departments. However, we know that there will be Supplementary Estimates (A), (B) and (C). What kind of oversight will you exercise to prevent a situation where, six months from now, we are presented with items that were not requested from the outset, and where, once the supplementary estimates are added to the Main Estimates, we end up with a budget similar to last year’s?
Mr. Brunelle-Côté: Our first control mechanism is that we have cut the budget. That’s what we did in the Main Estimates. We have reduced the reference levels. However, that doesn’t mean the government can’t reinvest, as you said. This is an exercise based on the government’s priorities. The cabinet, Treasury Board and the Minister of Finance will have to play a leadership role. We know what expenditures departments have cut. We at the Department of Finance will know if a department tries to revive a program that has already been cut. That’s not the objective.
By making cuts to programs, the government’s objective is to achieve efficiency gains. These programs were overlapping. They were programs with overlap, and they were deemed more or less useful. This has made it possible to reinvest in other government priorities. The government is reinvesting in defence, housing and other areas. It’s a shift of spending toward priority areas.
Senator Dalphond: Regarding the Public Sector Integrity Commissioner and his office, is a solution being sought to the significant increase in the volume of cases to be processed, given that his budget has remained largely unchanged?
Mr. Brunelle-Côté: I don’t know the exact details.
First of all, there have been no cuts to the commissioner’s budget. You saw that his budget was exempted as part of the exercise. Like all parliamentary officers’ budgets, his was not cut. If he needs additional funding, he must submit a request through the Department of Finance. That said, since our minister is responsible for the commissioner, if the commissioner believes there is an issue with his budget, I’m sure our minister’s office will be happy to listen to him if he needs to request additional funding.
Senator Dalphond: Thank you.
Senator Oudar: I want to begin by thanking you for being here. I am pleased to say that I am still referring to the 2026-27 Departmental Plan. Thank you, Mr. Brunelle-Côté, for referring us to that plan.
My question is related to this. I understand that you’ll answer Senator Carignan’s question in writing. When considering the responsibilities of the Treasury Board of Canada Secretariat, I often refer to the core responsibilities of Treasury Board: administrative leadership, the role as employer of the core public service and expenditure oversight. My question will focus on that topic, specifically on the increase you mentioned. Still, beyond the written answer you will provide us, how do you explain a significant increase — up to $6 billion — in spending oversight, when the human resources allocated to this responsibility are set to decrease? It’s not a pay increase, which normally accounts for the majority of the budget. What is the reason for this increase? What can the citizens of Canada and we, as parliamentary overseers, expect to see from this office that is so important to all Canadians?
Mr. Brunelle-Côté: Thank you for the question, senator.
As I explained to Senator Dalphond, you are right; the increase we are seeing in expenditure control is not necessarily additional spending on expenditure control. These are expenditures for special funds, so vote 50 and benefit payments for public servants.
That said, regarding expenditure control, we haven’t cut the staff who perform expenditure control functions as part of the cost-cutting exercise, as this is a critical mission of the government. It’s important to do it. We have not cut back on this type of activity. We continue to play a leadership role at the community level. My colleagues in the program sector who are responsible for the departments and for submitting proposals to the Treasury Board — that is, who oversee the departments — have not seen any cuts in this type of activity.
Senator Oudar: Thank you.
In a previous answer you provided about insurance, you talked about $1 billion, if I recall correctly. What explains that? How did we end up with such high insurance costs?
Ms. Boyer: In our vote 20 for employee health insurance, costs have increased significantly, both owing to claims and to inflation. In addition, costs have risen for disability benefits. Consequently, there is a $1-billion increase between last year’s Main Estimates and this year’s Main Estimates.
I would like to mention that, in the 2025-26 Supplementary Estimates (B), we have added $440 million to this envelope.
We have seen a gradual increase in costs. This increase is attributable to a rise in health claims and inflationary pressure, hence the $1-billion increase we see in the —
Mr. Brunelle-Côté: Of that $5 billion, $239 million is set aside for contingencies. This is intended to avoid last year’s situation of having to resort to Supplementary Estimates (B) because we hadn’t allocated enough funds initially. This time, we have a contingency plan.
There is also an additional $191 million for this fiscal year, representing extra costs related to the RCMP plan.
That explains the increase.
Senator Oudar: How much money are you allocating for prevention?
I believe in prevention. I always say it’s not an expense; it’s an investment. How much money are you allocating specifically for prevention?
Ms. Bidal: Thank you for the question.
I can confirm that, when it comes to occupational health and safety, the employer plays a crucial role. We continue to work with bargaining agents and government departments to ensure a healthy and safe environment. This enables us to minimize the impacts on physical or mental health, which could otherwise affect employees.
On the other hand, we are working closely with human resources directors and department managers to properly support employees who are on leave to ensure a return to work as soon as possible.
Senator Oudar: Can you tell us whether those amounts have increased?
Mr. Brunelle-Côté: We’ll have to get back to you on that.
Senator Oudar: Thank you.
The Chair: I read somewhere that 50% of sick leave is related to mental health and psychological stress. I can’t remember the exact source, but I don’t think I’m mistaken.
How do you explain that? What is going on with our public servants? How is it that these costs are mostly related to mental health?
Ms. Bidal: With the changes made to the Canada Labour Code, which now recognizes psychological health as much as physical health, we are seeing an increase — so possibly greater recognition — of what constitutes an absence owing to mental health.
The Chair: About 50% of cases or absences are related to mental health.
When it comes to prevention, the environment seems toxic to me when we see these kinds of figures. Doesn’t this worry you?
Ms. Bidal: Absolutely. Regarding the employer’s responsibility to ensure a healthy and safe environment, we remain committed, both at the departmental level and with the unions — at the national level, within departments and in the local union units — to ensuring healthy physical and psychological environments.
We continue to implement programs to ensure that managers are aware of their employees’ mental health and are able to respond when necessary to minimize the impact.
The Chair: Thank you.
Can you send us the list of programs that have been implemented?
Ms. Bidal: Yes.
The Chair: Thank you.
Senator Hébert: A $1-billion increase on a $4-billion budget is a 25% increase. That’s huge.
There is inflation, but it is not at 25%. This is a phenomenon that may also be observed in certain organizations, particularly in the private sector. That is what has led to fairly serious and rigorous measures to understand what explains this phenomenon and how to stop the bleeding.
Have you done any comparative analyses? The rate of work stoppages for psychological reasons has increased. Has Treasury Board done any analyses on this subject? Have you looked at other jurisdictions to try to explain what’s happening? A 25% increase is a lot.
Ms. Bidal: Not all the increases are due to absences caused by mental health issues, although we recognize that there is an impact in this area.
We work very closely with the unions through various programs to promote good mental health across the different departments. We will provide you with the list you asked for.
We’re also discussing training, for both employees and managers. These are joint learning programs with the unions and the Public Service Commission.
Senator Hébert: I understand.
Have you done an analysis to determine what is attributable to what? For example, the percentage attributable to increased drug coverage or to inflation. Have you broken down that increase to try to figure this out?
Have you compared that with similar governments around the world, or even with other levels of government in Canada?
Ms. Boyer: I talked about inflation, but the volume of claims has also increased.
A combination of several factors explains why the costs associated with our estimates for this year have increased regarding our insurance plan: the volume of claims, inflation, as well as other actuarial calculations that are done by experts in this area.
About 54% of expenditures are related to health claims, and 24% are related to disability. That’s quite significant. Our colleagues review the data and set the parameters for planning the expenditures for this vote.
Senator Hébert: It would be interesting to have more details on this matter, including comparisons with other governments to see what exactly is going on.
The Chair: For example, with the figures on the number of employees who have been on short-, medium- or long-term disability leave.
Mr. Brunelle-Côté: We can provide a breakdown and make some international comparisons. I can ask my teams to try.
Senator Hébert: Thank you very much.
If we continue at the rate of 25%, especially since we are in a process of attrition, we should see a decrease in these costs, not an increase.
Mr. Brunelle-Côté: It’s important to understand that, when a public servant leaves the public service, they and their family remain eligible for public service insurance.
Senator Hébert: Disability, as well?
Mr. Brunelle-Côté: Disability, as well.
Senator Hébert: Thank you.
Senator Gignac: Mr. Brunelle-Côté, as parliamentarians, we rely on three organizations for information on the management of public funds.
We have the Auditor General’s annual report, the Office of the Parliamentary Budget Officer, and the third organization is yours. Spending oversight is one of your responsibilities.
I’d like you to explain how it works. For example, last year, we were very uncomfortable about the expenditures for the dental care program, because the spending forecasts had underestimated the program’s popularity.
How does it work when a sector department gives you its spending estimates? Are there work sessions, or do you more or less take their numbers and plug them into your Excel file? I gave you one example, but there are many others. How does it work when it comes time to plan for the following year and work on the spending estimates you get from departments?
Mr. Brunelle-Côté: First of all, thank you for your question. It’s a great one.
There are a number of considerations, so I’ll talk a bit about how the expenditure management system works overall.
Senator Gignac: You can take my full four minutes, if you like.
Mr. Brunelle-Côté: How the system works, then, is that when departments want to launch a new program, they first have to obtain funding, which comes from the Prime Minister and the Minister of Finance. Normally, the department writes to the Finance Minister, and the department then has to answer questions from the Department of Finance and Privy Council Office about the program. They usually ask a lot of questions and they set a budget for the program, but they don’t discuss implementation in much detail.
Once the Prime Minister decides to grant the funding and it appears in the budget, the department has come to Treasury Board before the spending can be included in the Blue Book. It’s a bit different from some places. I know that, in Quebec, the treasury board is involved at the front end, and it’s the same in Ontario. Under the federal system, in Ottawa, Treasury Board comes into the process after the funding decision, so after the budget.
At that point, I have colleagues who are responsible for . . . . You brought up the Department of Health and the dental program. They have to write a submission explaining a number of things, including how the money will be spent, what the risks are and what they’ve calculated. I have Treasury Board colleagues who deal with the Department of Health, who ask the department questions and who provide that challenge function. That happens at Treasury Board, so before the ministers, who can also ask the department questions.
The way it works is that we at Treasury Board defend the expenditure to the ministers. They approve or reject the spending request, or approve it with conditions. Oftentimes, Treasury Board will attach conditions to the funding if we become aware of any problems and so on. After that, once the spending is approved, it’s possible . . . .
Senator Gignac: Thank you for clarifying that.
It’s interesting, because you mentioned how the process works in Quebec and Ontario. When I was a minister, the premier’s office would tell me to convince the treasury board secretary of the merits of my new program, saying it would help my case if I got the green light.
Here’s my question: Do you meet on this topic internationally? You have international counterparts, in the OECD, for instance. Does Canada work the same way as other central governments, meaning your involvement happens much later in the process than on the provincial side? Does it work the same way? Otherwise, could you get back to us with an answer in writing? I see this as a governance issue, and I’m quite concerned. You have a lot of expertise, and the Department of Finance has a lot of expertise, but politics come into play. Could you tell us about best practices across the OECD when it comes to the treasury board’s role in expenditure management?
Mr. Brunelle-Côté: There isn’t really a single model. I would say that Canada’s model, having a treasury board in itself, is a bit unique. Most countries don’t have a Treasury Board equivalent. When I attend OECD meetings, I see that the function we serve is folded into the finance department. The British don’t have a treasury board. I don’t think the Australians do either. Even countries with a Westminster system don’t necessarily have a treasury board.
As I said, the difference is that we come in afterwards. It’s a good governance question. It’s open to debate. There are benefits and drawbacks to being involved later in the process. One of the benefits is that, when the Finance Minister announces funding for something in the budget, usually the department hasn’t had time to really think through the implementation, so we’re able to ask better questions because we come in afterwards, as opposed to rushing to do it ahead of time. There are benefits and drawbacks, but as I said, there is no single model.
Senator Gignac: Thank you for being transparent and clarifying things for us. It’s very appreciated.
[English]
Senator Cardozo: I have a few specific questions about certain items, but I wonder if I could start with you, Mr. MacDonald, and ask you to explain to us a little bit more about your role as Chief Information Officer of Canada and how it relates to security.
Mike MacDonald, Acting Chief Information Officer of Canada, Treasury Board of Canada Secretariat: Thank you, senator, for the question. Overall, as part of the functions of the Treasury Board of Canada Secretariat, there’s a policy suite related to government security. There’s a policy on government security that happens to sit underneath the Office of the Chief Information Officer of Canada. It’s about dedicated security measures that all deputy heads must — or shall — execute within their organizations. All organizations have a chief security officer who is the principal risk adviser to the deputy head, and the chief security officer follows the policy suite on government security. There’s a leadership role, a policy role, a direction role and so on.
The Office of the Chief Information Officer of Canada really provides leadership when it comes to the government’s overall approach to how it is serving Canadians through digital, digital platforms, technology and the services around that. There’s an oversight role in investment and working with departments around how they and their deputy heads are making investment decisions about what their technology and digital and data needs are, again, with the concepts of advancing and improving and continuing to maintain services to Canadians.
Then there’s the overall role that we play or that my office plays — which I’m acting in right now — which is providing support. It’s support for those who want to make decisions in the digital or data space. A great example is some departments are coming to us now and they’re asking about using artificial intelligence that they’ve heard about to help their department perform more efficiently. We’ll support and help them by saying, “Well, actually, another department is already doing that exact thing. Why don’t you buddy up with them and save yourself some money, and you can probably implement a digital tool quicker? There you go. That’s probably a much more efficient way to progress.”
It comes down to support, direction, policy implementation and leadership.
Senator Cardozo: When it comes to artificial intelligence, or AI, are you the central person in the entire government, and as a corollary to that, is there a reason you’re situated in the Treasury Board of Canada Secretariat? Could you be a stand-alone agency? It’s not that I’m suggesting you need to be, but is there a financial accountability reason you’re connected to the Treasury Board of Canada Secretariat?
Mr. MacDonald: The best way to answer that is going back to the function of the Treasury Board of Canada Secretariat, which is to create and implement policy and guidance direction for the overall operations. Largely working with the G7 over the last couple of years, the Treasury Board of Canada Secretariat implemented a strategy for the federal public service on artificial intelligence. It basically gives some direction about helping guide each deputy head of an organization — helping guide other departments and agencies — in how they might want to approach the use of artificial intelligence in a very responsible way, in a secure way and in an appropriate way. We published that strategy just over a year ago, and we’re doing a one-year review on that strategy, which should be published fairly soon, in order to explain how — on the example of AI — departments are approaching it. Are they respecting the values and the rights that need to be protected with the use of AI, specifically the responsible use, and the guardrails that go around it?
Why is that within the Treasury Board of Canada Secretariat? It was a natural place to fit because of the use of the policy suite. When it comes to AI, while we have a strategy, we also have the Directive on Automated Decision-Making, and that’s been in place for a while, where departments use machines to make decisions, which is not new. That’s been in place since 1994, to be honest, and we have some other policy and guidance and standard documents that help with the implementation of artificial intelligence across the public service, to use that one example.
Senator Cardozo: It’s a central agency function more than the financial stuff we’re talking about today. The reason why you’re —
Mr. MacDonald: When you have a conversation around the public service adopting, approaching and implementing artificial intelligence, you’re right; it comes to the central agency approach of leadership and policy development.
Senator Cardozo: Thank you for that.
[Translation]
The Chair: I have a follow-up question.
At one point, I had asked how many people had moved to earning $150,000 or more within a five-year period, how many people were earning that much or more, the EX-01s, EX-02s, EX-03s and others who earned $150,000 or more in 2024-25. I got the answer. In 2021, five EX-01s were earning $150,000 or more. In 2025, the number was 2,778.
The number of people who have crossed the $150,000 salary threshold has ballooned so much that it’s hard to track the salaries. There are too many people earning $150,000 or more.
The committee had written to your colleagues asking for more specific pay ranges for salaries above $150,000, for instance, $150,000 to $200,000; $200,000 to $300,000; $300,000 or more. We wanted more detailed information on the pay ranges. We wrote them on January 9, but we haven’t heard back.
Can you follow up on our request? The number of people earning $150,000 or more is so high that it doesn’t tell us much about the increase in especially high public service salaries.
Ms. Bidal: Yes, we can get back to you with that information in writing.
The Chair: Thank you.
Similarly, you gave us some detailed information. I asked earlier for details on the number of individuals covered under the insurance plan. The answer you gave had to do with the average cost per public servant for the dental plan, the insurance plan and so forth. You gave us the information for 2024-25. Can you give us the same figures for 2025-26, and the number of dental insurance beneficiaries or disability insurance beneficiaries, so we can see how things have changed? I’d like not just the total cost or the cost per employee, but also the number of people on disability insurance.
Thank you.
[English]
Senator Wallin: I have a bit of a follow-up on what Senator Gignac was getting at: If your function is actually policy direction, then to come in ex post facto is difficult. It’s frustrating for us because we look at the estimates long after everything has been decided.
In that process that you described, are you assessing the promise or the commitment that’s been made politically, or are you assessing the actual impact of the decision that’s been made?
Mr. Brunelle-Côté: Assessing the impact is an integral part of the assessment we make. One of the key things we do is track results. When a project comes to the Treasury Board, a huge portion of what the department has to give us is the plan of the department to track results for the measures they are announcing. That’s one of the critical aspects of the role we play.
The department is ultimately accountable. The department has the responsibility to set its own performance targets, but we make sure that they have those performance targets. These performance targets are often translated into the Departmental Plan.
Senator Wallin: How about the relationship with, for example, the Parliamentary Budget Officer, or PBO? Because I know this committee has asked the PBO to actually look at budgetary measures and what the impact is on low-income earners, high-income earners, women, men or whatever it may be. Is that the function of the PBO as opposed to you in terms of that level of detail?
Mr. Brunelle-Côté: I would say both are complementary. The main role of the PBO is to provide parliamentarians and senators with information. That’s probably your main source of information, but we also do the same thing. We ask questions, and we exchange information with the PBO. The PBO relies on us too. Frequently, when the PBO is doing a study about a topic, they come to us and ask if we can provide the data. We support the PBO. We help the PBO do the assessment.
Senator Wallin: You suggested that for our situation here in Canada when the political decision or the governmental decision comes to you, it’s later in the process. What do you think of that process? Would it be better if you were at the front end?
Mr. Brunelle-Côté: That’s a broad governance question with a lot of implications. I don’t want to say that one system is necessarily better than the other here, but there are probably pros and cons of each.
As I was explaining to Senator Gignac, my view is that being at the back end gives the department more time to have an implementation plan so that we can see a thorough implementation plan. That’s the advantage of being at the back end.
At the same time, being at the back end means we have less influence over the total money that is allocated to a specific initiative. We’re working with a set envelope, and we’re making sure that money is well allocated as we look at the implementation plan.
It’s good to have the details at the back end, but if we’re at the front end, maybe we’d have more influence over the delivery mechanism.
Senator Wallin: Not just that, but also whether or not it’s a good use of funds.
Mr. Brunelle-Côté: Yes.
Mr. MacDonald: Senator, I think I could provide a more pointed example that gets to some of the questions you and others have asked and also relates to what Mr. Brunelle-Côté was saying.
When it comes to projects, for example, when government departments start to implement change projects over multiple years, there’s no real front or back, but there’s a middle. The Treasury Board plays a role in all those spaces. I’ll give you a great example.
When there are decisions to implement a major information technology project — let’s say it lasts five years — which is going to change the way services are delivered to Canadians, then we will get involved not just in the disbursement of monies by the Treasury Board at the beginning of that, but there are also governance structures that are set up when you run major projects. We sit at those governance tables.
There are questions that we will challenge and pose to the department that is implementing it. For example, they will go through different gates where they will have to bring in new Treasury Board submissions to maybe get a new authority to do this part of Phase 2 or maybe get a little more money to do Phase 3, and it’s all part of eventually closing the project. We will pose questions. It’s my office and my responsibility — I sit at these tables — to ask what the return on investment is. You want to do this at this point in time of the project. What is that going to bring us? For example, in the technology space, I’ll ask: What is the minimum viable product? You want to build a Cadillac or a Toyota, to use that analogy. If you can use the Toyota and it makes sense, then do that so that there’s efficiency. We’ll also challenge them on their policy compliance, which we talked about. Are you doing things in the correct manner?
We’ll also try to avoid duplication of effort. I did make that reference in the artificial intelligence space, where projects will think they need to create something new, but someone else in the enterprise in another department has already done it. Governance is there to bring that in.
We will directly challenge future Treasury Board submissions on a project on the number of FTEs they want to have, specifically full-time employees or part-time employees, or the use of consultants or service systems integrators and dealing with various companies and so on.
There are a lot of challenges in governance that lead up to the financial decisions of Treasury Board submissions and after those decisions as well, if that’s helpful.
The Chair: Thank you. That’s very helpful.
Senator Cardozo: I have a couple of quick questions.
In terms of Build Canada Homes, I don’t see it on the list here. In the 2026-27 estimates, does that come under the Department of Housing, Infrastructure and Communities Canada?
Mr. Brunelle-Côté: That’s correct, yes.
Senator Cardozo: In terms of Ingenium, the agency that coordinates three museums in Ottawa, I don’t see a separate item for that. Does that come from the individual museum budgets?
Are you familiar with Ingenium?
Mr. Brunelle-Côté: No, I’m not familiar with Ingenium.
Senator Cardozo: It’s an agency sanctioned by the federal government, which has a CEO, and it coordinates the Canada Agriculture and Food Museum, the Canada Aviation and Space Museum and the Canada Science and Technology Museum. Maybe they each provide a certain amount of funding to them.
In terms of the Department of Health and the Public Health Agency of Canada, what’s the difference between their roles? They each get a fair amount of money.
Mr. Brunelle-Côté: Yes, the Department of Health is the broad policy. It’s Indigenous. There is a big regulation role. It is the relationship with the provinces.
The Public Health Agency of Canada is more of an on-the-ground health prevention agency that played a pivotal role during COVID, as you know. It’s more disease prevention and information to the public about health risks.
[Translation]
The Chair: Senator Cardozo, Senator Forest had a follow-up question, and we are over time — unless you wanted to ask a central question or request a written answer.
Senator Cardozo: It’s just a quick question.
The Chair: All right. Please be quick.
[English]
Senator Cardozo: For the Department of National Defence, you’ve got it going from $33 billion to $50 billion. Does that include the major announcements that have been made toward the 2% target?
Mr. Brunelle-Côté: Yes. It includes all the capital investments for the 2% target. It includes the transfer of the Canadian Coast Guard to the Department of National Defence. It includes the investments that were made to help with retention and the payment of the military. It includes the new Canadian Defence Industry Resilience Program. It includes more money for Ukraine in terms of transfers and the benefits for the military, so it includes everything.
[Translation]
The Chair: Thank you.
Senator Forest: I think it’s interesting that Treasury Board works with departments to set the targets for their expected outcomes. Once that’s done, which is the first part of sound management, is there an assessment afterwards to see whether those targets are reached? I’m referring to the whole accountability piece that departments have to fulfill. Once Treasury Board has worked with the department to identify the targets and results for a given initiative, is it then up to the department to meet them, meaning you don’t follow up on the expected results?
Mr. Brunelle-Côté: Thank you for your question.
As my colleague Mr. MacDonald was saying, under the Treasury Board process, most departments come back to us a number of times. If they fail to meet targets when they’re implementing the initiative, Treasury Board will have questions and discussions. There is follow-up. Departments tend to have non-recurring funding, which means they have to ask for the funding to be renewed because it runs out. Certainly, if a department regularly fails to meet its targets and requests funding for the same program, more questions will be asked. Our main tool for overseeing the whole thing is a policy on results, which lays out the guidelines for departments in terms of meeting their targets.
Senator Forest: That’s reassuring, because you do follow up on the targets set at the front end.
Mr. Brunelle-Côté: Yes.
Senator Forest: That’s reassuring. Thank you.
The Chair: Thank you very much. That was very informative.
That concludes our meeting. We will meet again on Wednesday at 6:45 p.m.
(The committee adjourned.)