THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Tuesday, May 5, 2026
The Standing Senate Committee on National Finance met this day at 9 a.m. [ET] to examine 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: Good morning and welcome to all the honourable senators, as well as to Canadians following us on sencanada.ca. My name is Claude Carignan; I am a senator from Quebec and I am chair of the Standing Senate Committee on National Finance. I now invite my colleagues to introduce themselves.
Senator Forest: Éric Forest, independent senator from the Gulf division in Quebec.
[English]
Senator Pupatello: Hi. I am Sandra Pupatello, an Ontario senator.
[Translation]
Senator Gignac: Good morning. Clément Gignac from Quebec.
Senator Galvez: Rosa Galvez from Quebec.
Senator Dalphond: Pierre Dalphond, De Lorimier division, one of the finest in Quebec.
[English]
Senator Ross: Good morning. Krista Ross, New Brunswick.
[Translation]
Senator Hébert: Martine Hébert, from the Victoria division, the most beautiful in Quebec.
The Chair: I forgot to mention that Mille Isles is the most beautiful division in Quebec.
We are continuing our review of the Main Estimates for the fiscal year ending March 31, 2027. This morning, we welcome from Employment and Social Development Canada, Ms. Serena Francis, Senior Assistant Deputy Minister and Chief Financial Officer, and Ms. Jane Qin, Director General, Corporate Financial Planning and Deputy Chief Financial Officer. Next, from Parks Canada, we welcome Mr. Andrew Campbell, Acting President and Chief Executive Officer, and Mr. Andrew Francis, Vice-President and Chief Financial Officer.
Welcome to all four of you.
We will begin with a brief opening statement from Ms. Francis and Mr. Campbell, followed by a question-and-answer period.
Serena Francis, Senior Assistant Deputy Minister and Chief Financial Officer, Employment and Social Development Canada: Thank you. Good morning, Mr. Chair and members of the committee. It is my pleasure to be here today to discuss the 2026-27 Main Estimates for Employment and Social Development Canada, or ESDC.
First, I’d like to acknowledge that the land on which we gather is the traditional unceded territory of the Algonquin Anishnaabe People.
My name is Serena Francis, and I am the Chief Financial Officer for ESDC. I’m joined today by a number of my departmental colleagues, who are here to help provide additional details and perspective on the items included in the department’s Main Estimates.
ESDC delivers a wide range of programs and services that support Canadians throughout their lives. For example, the department assists parents with more affordable daycare through the Canada-wide Early Learning and Child Care program, helps students finance their post-secondary education, delivers programs that support labour market participation, and provides basic income security to more than seven million seniors.
Service Canada operates more than 300 service centres across the country, as well as other in-person service locations, call centres and online platforms. Through the Labour program, ESDC is also mandated to maintain a strong, productive, healthy and competitive workplace among employers under federal jurisdiction.
[English]
The key priorities of Employment and Social Development Canada, or ESDC, for 2026-27 include, among others, as follows: helping Canadians obtain the skills and training needed to participate in a changing labour market and providing support to those who are temporarily unemployed; supporting the economic well-being of Canadians to reduce poverty and address shifts in the cost of living; supporting students in accessing post‑secondary education; assisting seniors with income support for retirement; and providing financial benefits to survivors, people with disabilities and their families.
To deliver these priorities and services, ESDC is requesting $110 billion in the 2026-27 Main Estimates, representing an increase of $4.4 billion compared to last year.
Almost 98% of the planned budget included in the Main Estimates will benefit Canadians through statutory and voted transfer payment programs.
Statutory items, totalling $95.6 billion, include programs such as Old Age Security, Canada Student Financial Assistance, the Canada Education Savings Program, the Canada Disability Savings Program and the Canada Disability Benefit.
This represents an increase of $4 billion from the previous year’s Main Estimates, which is primarily attributable to a $3.4‑billion planned increase in benefits for seniors for projected increases to the number of beneficiaries and the indexation of benefits.
ESDC’s total voted transfer payment programs presented in the Main Estimates are $12.5 billion, which represents an increase of $866 million from last year’s Main Estimates. This is primarily due to an increase in payments to provinces and territories for the Early Learning and Child Care, or ELCC, and additional funding to improve youth employment.
Lastly, ESDC’s total voted operating budget is $1.1 billion in 2026-27, a decrease of $187.9 million from the previous year’s Main Estimates. The decrease mainly results from savings achieved through the Comprehensive Expenditure Review, as well as the completion of onboarding OAS benefits delivery to the new IT platform.
As part of the Comprehensive Expenditure Review in Budget 2025, ESDC is reducing $156.8 million in 2026-27, with additional reductions totalling up to $780 million by 2028‑29 and ongoing.
By implementing these savings, ESDC will streamline grants and contributions programs while continuing to deliver high‑quality services to Canadians and improve efficiency to reduce operational costs.
[Translation]
I also want to note that Employment Insurance and Canada Pension Plan benefits and related ESDC operating costs are not included in the Main Estimates; however they are reflected in ESDC’s departmental plan. Those expenditures are charged to the Employment Insurance Operating account and the Canada Pension Plan.
Lastly, the measures announced for the department in last week’s Spring Economic Update are not reflected in the Main Estimates and will be sought through future Supplementary Estimates.
I hope this overview has given you a better understanding of the Main Estimates for the department. My colleagues and I would be pleased to answer your questions.
Andrew Campbell, Acting President and Chief Executive Officer, Parks Canada: Good morning, Mr. Chair and honourable senators.
[English]
It’s a real pleasure to be here today to join you and the committee members to outline the 2026-27 Main Estimates for the Parks Canada Agency.
I would like to recognize before we begin that we are meeting on the unceded traditional territory of the Algonquin Anishinaabe People.
[Translation]
Before discussing the Main Estimates, I would like to take a moment to highlight some key developments from the 2025‑26 fiscal year, which illustrate the operational context in which Parks Canada operates.
[English]
The past fiscal year was profoundly marked by the aftermath of the major wildfire that occurred in 2024 in Jasper and Jasper National Park.
In 2025-26, Parks Canada continued its role as a partner in the community’s reconstruction and recovery, working closely with the Municipality of Jasper, the Province of Alberta and federal departments.
[Translation]
The 2025‑26 year was also marked by significant achievements in conservation and partnerships with Indigenous peoples. In December 2025, a salmon ecosystem restoration initiative, led jointly by Indigenous partnerships and Parks Canada, received international recognition as part of the United Nations Decade on Ecosystem Restoration. This initiative highlights Indigenous leadership, a science-based approach, and tangible results for the recovery of salmon populations and their habitat.
[English]
The fiscal year was also marked by incredible public demand.
During the summer, the Government of Canada offered free admissions through the Canada Strong Pass to places operated by Parks Canada. We welcomed 14.5 million visitors during that period, which is a 13% increase compared to 2023. For 2025-26, Parks Canada has been trending towards 26 million visitors.
Finally, the 2025-26 fiscal year falls within a period when several previous investments are coming to an end. While operational needs remain high, rigorous management of public resources, prioritization of essential activities and maintenance of key capabilities have been central to the agency’s financial decisions during this period.
It is within this operational, environmental and financial context that the appropriations requested in the 2026-27 Main Estimates are situated.
I will now turn to an overview of Parks Canada’s 2026‑27 Main Estimates. The $1.3-billion allocation is composed of a voted spending authority amount of $1.0079 billion, which consists of the following: $626.3 million in operating expenditures, including grants and contributions; $356.7 million in capital; and $24.9 million for the New Parks and Historic Sites Account. A statutory amount of $285.5 million, which consists of $65.5 million for the employee benefit plan and $220 million as an equivalent to revenues that are to be collected.
This represents a net increase of $25.5 million, or 2%, compared to the 2025-26 Main Estimates. This is primarily due to increased temporary funding to support the long-term sustainability of Parks Canada’s built infrastructure, new funding to renew the Canada Strong Pass and the sunsetting of funds related to nature initiatives.
The major variances are briefly described as a net increase of $99.2 million in temporary funding for capital asset investments in Canada’s parks and sites, an increase of $72.5 million to renew the Canada Strong Pass for 2026 and a decrease of $143.2 million due to the sunsetting of temporary funding related to nature initiatives, for which, just a couple of weeks ago, renewed funding was announced.
With the funding sought in the 2026-27 Main Estimates, Parks Canada will continue to protect, present and manage Canada’s treasured places in a manner that supports safety, conservation and meaningful visitor experiences, while ensuring sound stewardship of public assets and resources.
Thank you.
[Translation]
The Chair: Thank you very much, Mr. Campbell.
We will now move on to the senators’ question period.
Senator Forest: Thank you for coming. It is always a pleasure to have you here.
My first question is for Ms. Francis and concerns Cúram, the program that, according to the department’s plans, is expected to see spending cuts of $156 million in 2026–27, representing a reduction of approximately 15,000 full-time equivalent positions.
Can you explain how investment priorities were established? How were priorities determined in relation to the $156 million in cost reductions?
Ms. Francis: I just need to find the page.
[English]
To establish the priorities for the reductions, ESDC really looked towards preserving front-line services to Canadians. So you won’t see reductions in there associated with any direct benefits for OAS, CPP or EI. The $156 million specifically was predominantly focused on the internal operation of the organization: trying to improve the use of artificial intelligence and robotic process automation and trying to ensure that the department still maintains that direct service delivery component of its services.
Of the amount in the first year, $86 million was truly related to the modernizing government operations piece of it, and then we had a piece as well around recalibrating our grants and contributions programs for about $60 million of it. That took a good, hard look at the programs we offer to Canadians, whether there is any duplication with programs already offered by provinces and territories and whether there is an opportunity where certain programs don’t have the demand needed or associated with it, where some streamlining or reductions could be done in those areas.
The focus was very much on trying to minimize any direct impact, but trying to become a more efficient and effective public service in terms of how we’re administering those benefits.
[Translation]
Senator Forest: The government leader describes the Cúram software as a success story. On the other hand, budget cuts are still being made. We also plan to allocate $205 million this year and $184 million in the future to improve services for Canadians, particularly regarding the new Old Age Security platform — which is, in fact, Cúram — that has been the subject of various criticisms.
I don’t understand; if Cúram is truly a success story, why does it need additional funding? How much has been invested in this program to date?
As the saying goes, “once bitten, twice shy” — that’s how we feel after what we’ve been through, particularly with Phoenix and the new IT programs. We’re a bit skeptical.
[English]
Ms. Francis: My colleague Mr. Hickey is going to come up and join us here. He’s responsible for the work associated with the Benefits Delivery Modernization, or BDM, programme and will be better placed to respond.
[Translation]
Brian Hickey, Assistant Deputy Minister, Benefits Delivery Modernization Implementation and Service Design Branch, Employment and Social Development Canada: Thank you for the question.
First, Cúram actually falls under a different program: the Benefits Delivery Modernization program.
[English]
It’s actually a ring-fence program and a special purpose allotment. I want to start with that. That money is subject to considerable oversight. It’s with the Treasury Board and was subject to an OAG report in 2023. So there’s no shortage of oversight; I would like to assure you of that, senator. The program — Benefits Delivery Modernization — is not exclusively an OAS project. It also consists of a Canada Pension Plan project. That has been included in our authorities, as well as Employment Insurance being migrated, as well as the migration of seven call centres. It is a series of different projects that add up to towards the total program authority.
To date, we have several concurrent projects under way. The OAS project has cost about $633 million. It actually was about $50 million short of the estimate when we wrap this up at the end of this fiscal year.
With respect to the investment, that system was implemented in March 2025, and 7.4 million seniors were onboarded to that system. The system was never shut down. It’s successfully paying 7.7 million seniors now every month. It has been a source of automation for the department as well, which has allowed us to actually manage some of the growing backlogs on account of demographics and other things.
[Translation]
I’m not sure if this fully answers the question, but I wanted to give you a little context about the system. As for the first migration, I’d say it’s a success. At the same time, we have other projects under way.
[English]
So we are working through those as well.
Senator Cardozo: My questions are regarding ESDC. I’ll give three questions and ask for your responses. First, in regards to early learning and child care. From what I can gather, it’s about $35 billion for the year, but you can confirm that. Have we reached the planned 250,000 spaces? Are we getting $10 per day child care across the country or does that vary?
My second question is with regard to the Canada Disability Benefit. I see that it’s noted at $1.1 billion or so for 2026-27. How do you estimate that, and could the final number be more or less?
Third, with regard to the Canadian Apprenticeship Strategy, I note from the estimates that you’re going from $107 million down to $74 million, but my guess is that this is related to the announcement in the spring economic update, and we’re going to be seeing a different number there. Can you just confirm that? Thanks.
Ms. Francis: Let’s start with the first part, which is the amounts. The Canada-wide Early Learning and Child Care, or ELCC, program for the current fiscal year is $9.2 billion. I’ll ask my colleague Ms. Adam to come up and join and give more details on the program part, but I’ll give you some numbers while she comes up. This is to ensure partnerships with the provinces and territories. Ms. Adam can provide a bit of an update on the second part of your question.
Senator Cardozo: So, it’s around 250,000. Are we getting $10 per day?
Catherine Adam, Senior Assistant Deputy Minister, Income Security and Social Development Branch, Employment and Social Development Canada: Thank you for the question. A target of $250,000 additional spaces was set under the original Canada-wide Early Learning and Child Care, or ELCC, investment, which was announced in Budget 2012.
The provinces and territories are on track to meet that commitment on space creation. There’s a bit of a lag in terms of reporting on spaces created versus spaces announced, and that is because final reporting for the 2025-26 year from provinces and territories isn’t due to the department until October. Certainly, from what we have on known spaces created to date as well as the announced spaces that provinces have said — they’ve announced they’re creating them but they haven’t been done yet — we’re on track to hit that commitment of 250,000 additional spaces.
The commitment was by the end of the 2026 fiscal year, so we’ll know in October if the provinces and territories have reached that commitment. Certainly, there are challenges they’ve all faced, but from what we have on the reports — they have to report to us annually on the results that they’ve achieved as well as their expenditures — they’re on track to meet that commitment.
Senator Cardozo: Thank you. Ms. Francis, you mentioned the current year is $9.2 billion. What is the plan for the next year? Please go ahead on the disability.
Ms. Adam: You had a question about how we reached the target of $10 per day, on average. We had a two-phased commitment from provinces. The first was to reduce fees by 50% and to reach an average of $10 per day by the end of the fiscal year 2025-26. All provinces and territories reduced their fees by 50% on time, and we have several provinces and territories that are actually below the $10 per day average, while others are more challenged to reach the average of $10 per day. Certainly, we’ll see the results from the reports.
There have been a number of pressures in the system that provinces have experienced, but as a whole, we’re moving towards that commitment, and provinces and territories are working with us to find ways to make sure that we’re able to find a way through some of the sustainability challenges.
Senator Cardozo: That’s very generous language. The words “all the way through” are very diplomatic. That probably gets results. Keep going.
Ms. Adam: We do our best. Thank you, senator.
Ms. Francis: The next thing to address is the Canada Disability Benefit. The amount we have earmarked for the 2026-27 fiscal year for the Canada Disability Benefit goes up to $1.1 billion. That one is a statutory program. That one started in June 2025. If you look at a comparison from the previous year to this year, there’s an expected increase. The onboarding is going well. There was also an announcement in the spring economic statement which related to the tax benefit, and you need to have the tax credit in order to have access to the Canada Disability Benefit. So with those changes, we’re hopeful there will be more who are able to access and have eligibility for the Canada Disability Benefit.
Senator Cardozo: More than 1.1 billion more people subscribed for it. Are you were able to do that or do you have to come back?
Ms. Francis: We would have to go back and adjust our statutory forecasts associated with the program, but there’s always the ability to do that.
Senator Ross: My question is for you as well, Ms. Francis.
The Auditor General recommended that Employment and Social Development Canada work with provincial and territorial governments to obtain comparable performance information to compile results and effectively assess the outcomes of the system. What has been introduced and what has been implemented at this point?
The other question I have is this: Can you give me a sense of the impact on privately owned child care? Entrepreneurs who are running child care talk about the inability to provide the $10 with the insufficient increase in their support related to inflationary and labour costs.
Ms. Francis: Ms. Adam, why don’t you start with the child care question?
Ms. Adam: I’m sorry, senator, I was focusing on the second part of the question about private providers. This is about working with provinces and territories on reporting and indicators. There are a series of common features of the Canada‑wide Early Learning and Child Care, or ELCC, system on which provinces and territories are required to report to the federal government. Those are consistent.
We have found that there is different terminology used at times between provinces and territories. In response to that, we have set up a federal-provincial-territorial data working group so that the provinces and territories come to the table with us as we work through to establish common definitions for the terms being used in those indicators to make sure that we have a level of “apples and apples, oranges and oranges” way of reporting back. But we get information from provinces and territories through their annual reports, as well, on space creation, fees, wages, wage grids and quality aspects of child care. So there are a number of features.
The key for everyone participating in the Canada-wide Early Learning and Child Care system — I mean the federal government and provinces and territories — is having established this working group for all the jurisdictions with the federal government to make sure that we are capturing the information that parents and governments need to see about how the system is evolving. It also allows us to do so in a way that is understandable and transparent but is also talking about things in the same way. That has been a major advancement that we have had in the last year or so to be able to move forward this way.
Senator Ross: With regard to entrepreneurs and their concerns about being able to offer comparable or competitive wages, I’m hearing that many privately owned child care centres are looking to exit the system simply because it’s just very difficult for them to operate in this new environment.
Ms. Adam: Provinces and territories have their child care systems, and every jurisdiction has an approach to the inclusion of private providers or for-profit providers in the system. So it’s all a little bit different because, when we started out, every jurisdiction was at a different place in terms of the share or ratio of child care centres that were for-profit and not-for-profit organizations.
The challenges and costs of operating a space are experienced by not-for-profit and for-profit organizations as well. The question of what goes into the cost of operating a space is shared. Wages are the number one driver around the cost of a space and so too is the physical site. We see both not-for-profits and private providers expressing challenges. It really is one of those pieces that we work on with provinces and territories around the factors that are driving costs, what we are seeing as demographic trends, and having conversations and discussions with them on the path forward to sustaining the system.
Some of what you have heard from for-profit or private providers would be similar to what we are also hearing from not‑for‑profit providers. Taking care of kids is one of those things that will take working together with jurisdictions to find a way to crack the nut.
Senator Ross: What kinds of waiting lists for spots are you finding across the country, whether it’s private or not-for-profit?
Ms. Adam: There are wait lists. Certainly, in each jurisdiction, demand outstrips supply. As the price has dropped, it has become more affordable for lower-income and middle‑income families.
That was foreseen as a consequence of reducing the fees, and that was why there was a lot of focus on investment of creating new spaces under the Canada-wide system. Going forward, it will certainly be one of those areas provinces and territories are recognizing as challenges to be able to meet the demand. It’s a sign, in one way, of the success of the investment in the program, and we will be working with them going forward to find ways to sustain and look at the considerations on space creation and demand.
[Translation]
Thank you.
Senator Galvez: My question is for Parks Canada.
Good morning.
[English]
I think it’s the first time that I have heard of you putting costs for wildfires in the budget. In your predictions, how much do you think will go into care of wildfires and the maintenance of parks?
Mr. Campbell: The appropriation that I had talked about specifically was towards the dollars that we received for Jasper National Park and the restoration work that is going on there. At the same time, though, we did get a statutory increase in wildfire management.
From that perspective, our costs over the past number of years have continued to rise. At the same time, we’re doing a large amount of prescriptive work, such as making sure that town sites are protected through both prescribed burns and other forms of forest preparation in the event of a forest fire. Certainly, we are seeing an increase in the amount of costs that we are taking on every year for forest fires.
Senator Galvez: From our target of 30% by 2030 on protected areas of national parks, do you support the creation of new national parks?
Mr. Campbell: Absolutely. It is a government direction. Yes, I do support the creation of new national parks, marine conservation areas and national urban parks.
Senator Galvez: I asked this question when Minister Guilbeault was Minister of the Environment. I asked him this question: Were there any criteria for parks to become national parks? He said that it was mainly coming from the communities that wanted to do it. There was no specific call or determination of specific areas. Is this still the case?
Mr. Campbell: From the 1980s, Parks Canada had a plan for the establishment of national parks in each bioregion within the country. So we continue to work towards representation of bioregions.
Today, the way that most of the projects come to us, though, is through community-led projects, either by First Nations, Inuit and Métis coming to us and making some sort of idea around where they think a national park or a national marine conservation area should be formed, or it comes from a local community. We have a number of local communities that have brought those types of projects forward. We look at that from a bioregional perspective. The same applies to marine national conservation so that we’re not overrepresented in any particular area, and we are putting our resources to where we are protecting the biodiversity that Canada has.
Senator Galvez: People understand the concept of ecological corridor integrity, yet it is essential to a national park. I have heard comments like, it costs money, it costs too much money, or it takes away land from private owners.
What is your answer to that?
Mr. Campbell: If you look at the net benefit to Canadians, for every dollar that goes into national parks and national marine conservation areas, there’s about a $4 return from a GDP perspective. From that perspective, if we just talk raw dollars, that is the return on investment that Canadians get from national parks, national marine conservation areas and national urban parks.
When we look at what that actually means for ecological services to Canadians — clean air, clean water, forest protection —
Senator Galvez: Health.
Mr. Campbell: Absolutely. In fact, Senator Galvez, we have started in at least two jurisdictions. We have more coming, where physicians can prescribe going into national parks and national marine conservation areas as one of the ways that they deal with their health and mental health.
If you add all of those types of benefits up, I would suggest they are a great deal for Canadians.
Senator Galvez: Thank you very much.
[Translation]
Senator Gignac: Welcome to the witnesses.
My questions are for Employment and Social Development Canada.
Your budget is significant. In terms of voted appropriations, we’re talking about $13 billion, and when it comes to statutory items, that amounts to $96 billion. That’s substantial. When I look at the departmental results, it seems that, year after year, you’re having a bit of a hard time, as several targets aren’t being met. In fact, for the most recent year available — 2024-25 — out of about 100 indicators, 37 were not met. In some cases, it’s not a big deal, but in others, it’s significant. Could you comment on this? During the pandemic, it was understandable, but now that’s starting to feel like a while ago. I’d like some explanations, and to know if any corrective measures are under way.
[English]
Ms. Francis: Let me first start with the fact that ESDC did a pretty substantive review of all of its performance indicators over the 2025 fiscal year with a view to doing a significant update to it.
Actually, between the 2024-25 fiscal year and what you’ll see in 2026-27, we went from 110 indicators that we are tracking to 131 indicators that we are now tracking. So we have actually started looking at more.
Many of the changes that we made in that space were around integrating quality-of-life indicators from Statistics Canada, expanding the scope to include under-represented programs and services and new programs that had come online that weren’t there before. We’ve also strengthened the quality measures, like the percentage of time that Canada.ca is actually up and live and accessible to everyone.
We have also shifted to more percentage-based indicators so that we have a better comparison to work from.
The 2024-25 indicators — we are now through another fiscal year, 2025-26 — aren’t published yet. We are, however, seeing improvements in those indicators, so you will see that bar moving a bit in terms of the improvement there.
Senator Gignac: In fact, I have noticed that, and I appreciate the fact that you have had a shift. I have now seen new indicators with more precision, and as an economist, I prefer that to vague indicators.
[Translation]
One indicator caught my attention: the participation rate in the Canada Education Savings Grant. As grandparents, this is a way to help our grandchildren, given that parents are struggling to make ends meet and cannot contribute to their children’s education. We’re talking about 54.3%, which is a fairly specific target. Do you have any historical data on this?
Here is my second question. Next year will mark 20 years since the Canada Education Savings Grant was last indexed. To receive the $500 grant, you must contribute $2,500. This has been the case for 19 years. Needless to say, education costs are much higher than they were a decade ago. Does the department intend to address the issue of the Canada Education Savings Grant? You may provide us with a written response.
[English]
Ms. Francis: We will get back to you in writing on that one. It’s very specific.
Senator Gignac: I’m pretty far from the Main Estimates, I understand, but since you are there —
[Translation]
Ms. Francis: That doesn’t bother us at all. We have taken note of your question and will respond in writing.
Senator Gignac: It is quite important to have historical data, because when we have a good indicator without historical data, it is more difficult for us to assess the trend.
My next question concerns another topic. In the latest economic update, one issue has been the subject of much discussion in Quebec: the allocation of $6 billion to train and hire new skilled workers. Since the labour falls under provincial jurisdiction, what is the situation on that front? Are discussions under way, given that Quebec claims this is an exclusive area of jurisdiction?
[English]
Colette Kaminsky, Senior Assistant Deputy Minister, Skills and Employment Branch, Employment and Social Development Canada: Thank you, senator, and thank you for the question. We work very closely with the provinces and territories on all aspects of the labour market and workforce development.
We have several fora that we use to advance those discussions. The major place that we discuss is through meetings called the Forum for Labour Market Ministers. We meet many times a year, and we’re preparing for a ministerial meeting this July in Halifax.
In preparation for all budgets, work and analysis that we do, we have many different working groups. Our working groups currently have five priorities. One of those priorities is around major projects and labour market development, where we’re focusing on apprenticeship systems, digging into the data and digging into availability.
Each of the provinces is developing their local labour market forecasts, and we are putting those numbers together, matching them to macroeconomic indicators and working on issues like labour mobility.
Together, we’re working on strategies where we can have pan‑Canadian programming and pan-Canadian forecasts and outlooks so that the provinces can benefit from that information as they implement their local programming.
[Translation]
Senator Gignac: My question was very specific. In the past, you have entered into agreements with Quebec for a transfer. Given that Quebec already has its entire system in place, are you open to the idea of proceeding, as in the past, with a monetary transfer to Quebec?
[English]
Ms. Kaminsky: We have agreements with each province and territory. It’s not a transfer; it’s a contribution agreement with very clear parameters and requirements for reporting.
Two major agreements — the Labour Market Development Agreements and the Workforce Development Agreements — have been in place for many years. The Labour Market Development Agreements have been in place for over 30 years. We have funding arrangements with that.
As part of the tariff response fund, we added funding to the Labour Market Development Agreements to be able to focus in, and for much of that funding, we’ve encouraged provinces and territories to look at the connection to the skilled trades and apprenticeship, given this major gap.
[Translation]
Senator Gignac: Thank you.
Senator Dalphond: My questions are for Employment and Social Development Canada.
I am very interested in people with disabilities, particularly those with multiple sclerosis. I have been told that it is difficult to obtain the benefit as well as the tax credits. How exactly does this work? You administer the funding, Service Canada sends the cheques, and Revenue Canada decides who is eligible for the tax credit. Also, a medical assessment must be conducted. How does this work among the four agencies that manage this benefit? Are people automatically eligible for the benefit once it is determined that they are eligible for the tax credit, or do they have to fill out additional forms?
Stephanie Kirkland, Senior Assistant Deputy Minister, Integrated Service Strategy and Operations Branch, Employment and Social Development Canada: Good morning. My name is Stephanie Kirkland, and I am responsible for access to this benefit.
[English]
We work in close partnership with our colleagues at CRA on the issues that have been raised around the disability tax credit, or DTC. You saw in the announcement last week that the CRA has streamlined access to the disability tax credit.
For us, the issuance of a disability tax credit, when a client applies, triggers an automatic invitation to apply to the Canadian Disability Benefit and automates the access for the client to the benefit.
What is important for us is that the recent announcement has actually streamlined the process for those especially suffering from long-term disability to not carry the onus of proof with a medical practitioner and streamline it so they can access the benefit in a quicker way.
In addition, in Budget 2025, they announced that clients who had paid for access to the disability tax credit will be reimbursed for the fees to access the DTC. We are seeing a lot of improvements in the way that the DTC is processed at CRA and the way that clients can access it. I hope that is helpful.
Senator Dalphond: What I heard from the representative of those suffering from MS is that the requirements are so high that they cannot qualify even if they suffer from a situation which is permanent and, unfortunately, debilitating to them.
Ms. Kirkland: It is true that it is an income-tested benefit. You are correct.
Senator Dalphond: So that is going to be fixed, I understand?
Ms. Kirkland: There is a mechanism within the benefit itself that is a graduated cost of living, but at this point in time the benefit is calculated based on the income of the client, and I haven’t seen anything in the policy space to see changes to that.
Senator Dalphond: My next question is about student loans. I see that last year, the debt write-off under the Canada student debt loans program was almost $400 million for 2025-26. There’s nothing indicated for this year because I expect you wait until you get a better picture.
Are you forecasting that it will increase because of the difficulty for youth in getting jobs, or is it something that will remain constant?
Ms. Francis: Ms. Qin, why don’t you take this one?
Jane Qin, Director General, Corporate Financial Planning and Deputy Chief Financial Officer, Employment and Social Development Canada: Thank you for the question. Usually, we write off every year for the Canada student loans, and the reason you’re seeing close to $400 million in the Main Estimates last year was because in 2024-25 was the prorogation of Parliament, so we did not have the write-off approved by Parliament in the Supplementary Estimates (C), which is the usual time we get approval from Parliament to write it off.
There are two years of write-off equivalent included in last year’s Main Estimates. Again, this year the write-off will be done through the Supplementary Estimates (C) upcoming and when we have enough information to submit our submissions.
We have our expert here on the program. Jonathan, do you have anything to add?
Jonathan Wallace, Director General, Canada Student Financial Assistance Program, Learning Branch, Employment and Social Development Canada: No, I think that’s correct. It’s difficult to predict the number of write-offs on an annual basis; it’s based on a variety of factors.
I would note that, for the last several years, we have been able to maintain the value of write-offs at less than 1% of the direct loan portfolio, and we anticipate that will continue going forward as a result of many of the actions taken by the government.
For example, increasing non-repayable grants reduces the number of loans folks have to repay. The government has eliminated interest accrual, which again reduces the number of dollars folks have to pay in repayment, and the government has also enhanced the repayment assistance plan for those who have difficulty in repayment.
Right now, a single individual who earns less than $45,000 doesn’t have to make any payments on their loans until they earn more than that amount. That amount is higher if you have a higher family size.
For those reasons, as well as others, we have been able to keep write-offs at less than 1% of the portfolio.
[Translation]
Senator Hébert: I would like to continue on the same topic raised by Senator Gignac regarding the planned investments in training workers for major projects. I believe this is essential. If we want to ensure the resilience of the Canadian economy, we will need people to work on these major projects. My question concerns the monitoring of results.
In the departmental plan, in Table 10, I note that no target was set for the percentage of people who found employment after participating in training or receiving employment support measures. The same is true for the percentage of people who returned to school after receiving training.
I know that Quebec had implemented a program for construction workers, and that the lack of performance indicators had been raised as a concern. What is the percentage of people who were trained, who received funding, and who are actually employed in the sector?
Do you intend to establish performance indicators in collaboration with the provinces? This needs to be done with the funding, because we’re talking about $6 billion, which is a significant amount.
[English]
Ms. Kaminsky: I’m pleased to receive this question, which is a very important one in terms of performance measurement and outcomes.
A previous senator was asking about labour agreements and funding arrangements. The labour market agreements that we have in place with the provinces, as I said, are not transfers. They are comprehensive contribution agreements with performance indicators.
Part of those agreements are funded through the EI Part II funding. We have a comprehensive report each year called the MAR, the Monitoring and Assessment Report, which has detailed outcomes about training province by province. That’s a definitive source that goes into a great level of detail.
The labour market agreements themselves have a performance framework. All provinces have updated their frameworks, except for the Province of Quebec, which has chosen to keep the original performance framework with some modifications that date back to the original agreements in the late 1990s. To the degree you may see differences in Quebec data, it is, to a degree, explained by that requirement.
Through the tariff of funding that we recently negotiated with the provinces, again, we have updated a performance framework. The Province of Quebec has chosen not to adopt those new metrics that we can provide comparable statistics to all the provinces.
You will see, again in future reports, that they will have more data about employment outcomes, where people have been employed, which occupation, which sector they moved into and the time on training.
We can have new metrics that show the time that training began, how it linked to the unemployment period, the duration of the training and when they came out.
But there will be differences across jurisdictions due to those bilateral negotiations in the performance frameworks.
[Translation]
Senator Hébert: In Quebec, there is a body called the Commission des partenaires du marché du travail, which brings together employers, unions and educational institutions that oversee the system, which explains the difference.
My other question concerns Canada’s National School Food Program. Funding has increased from $19.9 million in 2024-25 to $140 million in 2026-27. Do they have a bigger appetite? Inflation must surely be a factor.
[English]
Ms. Francis: I am assuming it is the first year of implementation, so the timing of the school year and when the program came into effect versus an entire fiscal year.
Senator Hébert: Okay.
Ms. Francis: Catherine can add any details.
Senator Hébert: Okay.
Ms. Francis: I’m sure it’s not that the kids got hungrier.
[Translation]
Senator Hébert: Is there a “Buy Canadian” policy for school food?
Ms. Adam: The National School Food Program was new. So, in the first year, the budget was about $70 million. In the second year, the budget doubled. That is the reason for the difference between the program’s first year and the second.
[English]
And, yes, kids are hungrier, probably.
[Translation]
I am the mother of two boys, so I know very well that they have big appetites.
[English]
The appetites.
So that would be the first part of the question.
The second part?
Ms. Francis: Is there a Buy Canadian policy?
Ms. Adam: There is. In our negotiations with the provinces and territories, there are action plans and encouragement for them to buy local and buy Canadian. There’s a real emphasis.
[Translation]
This is for the purchase of local food.
[English]
Senator Pupatello: Senator Hébert snagged my question on the Buy Canadian in the breakfast programs. But you used careful language, as I noticed the finance officials did as well, around possible guidelines as opposed to “you must buy Canadian.”
Can you spell out how strenuous that guideline might be interpreted at the local level?
Ms. Adam: It’s certainly encouraged. When we’re working with provinces and territories — for example, rural and remote communities — in some cases, it’s easier to rely on local food providers and farmers for the provision of apples, for example, and for things that the school is going to use in a breakfast and lunch program.
In other areas of a province and territory, that can be a bit more difficult. But there certainly is an emphasis on having consistency between this National School Food Program and policies and programs at Agriculture and Agri-Food Canada to have an emphasis and encouragement on buying Canadian and buying local.
If you’re familiar with the Breakfast Club of Canada and how the programming works, it’s so closely interwoven with local community businesses and farmers that it’s inherent in how school food programming works.
Senator Pupatello: It devolves down. But you might consider allowing funding at the other end of it, from the business perspective, to allow businesses to prepare to have an offering for breakfast programs so that it’s coming from the other end, and it gives them a chance to sort out how they could participate. That might be something you would like to do through some of the business organizations.
If I may move on to one of the Andrews. You can’t be an executive with Parks Canada unless you’re an Andrew here. I’m teasing you. Good morning.
I have a question about the national park in Windsor, the Ojibway park; it has been on the books for probably 15 years. It has not moved forward in any significant way. I guess that’s subjective. It is certainly seen by the local community to be taking a very long time.
I notice capital allocations in your budget. Can you explain how much of that might be geared towards the Ojibway to actually get it off the ground? Are there bricks and mortar planned for the same kinds of centres that I see in other national parks across the country? What is the time frame?
Mr. Campbell: Those are all great questions. Some I won’t be able to answer because I don’t announce new establishment.
But on this, we do have $35 million, which is the commitment from the federal government for the establishment of the national urban park in Windsor. We are moving. That’s the total budget we have for the establishment phase of the park.
Senator Pupatello: Can you describe what that means?
Mr. Campbell: Yes. In some cases, it is land acquisition. In some cases, it would be the building of new infrastructure within the lands. In many cases, it’s also the impact and benefit agreements that we would have, in that case, with two First Nation communities. It would also cover the types of agreements that we would have with all of those who will have land within the park.
We’re getting very close. The City of Windsor would be one, the City of LaSalle would be one and the conservation areas would be another. It’s bringing together a large number of different constituent groups: the Province of Ontario and two municipalities. We’ve been talking to the university that also has land in the area and the Conservation Authority that has land in the area.
Being able to set the parameters around that and have everybody come up on the agreement is actually the piece that has been taking time. We’re making excellent progress on that, and we hope that we continue to see that in the very near future.
Senator Pupatello: Does that mean this fiscal year? I only say that, with respect, simply because it has been a minimum of 15 years of discussion, so it’s probably going to land in the book of records as the longest sought-after national urban park in the country.
Mr. Campbell: I can say publicly what has been out there is that we’re to the point with the City of Windsor, where they have taken the agreement that we would sign with them on the policy to their council. That has passed their council, so we’re happy we are in that direction.
We have had very good discussions with the First Nations around the creation. In fact, we, as Parks Canada, own a parcel of land already, right on the shores of the river. We’re in very good shape to get this done very soon.
Senator Pupatello: You’re very definitive.
[Translation]
The Chair: Thank you very much.
My question is for Parks Canada.
I have noticed that Parks Canada does not have a fleet of water bomber aircraft to fight forest fires. Does Parks Canada intend to acquire such aircraft or to participate in the creation of a national fleet of water bomber aircraft to fight forest fires, as proposed by the Federation of Canadian Municipalities?
Mr. Campbell: We are the only organization within the Government of Canada that has personnel dedicated to forest fires. We have used our own employees, but we also have partnerships with other provinces. So we provide personnel to the provinces, and at the same time, they have provided the —
The Chair: But Parks Canada doesn’t have any. I don’t know, but it’s like a town that doesn’t have a fire department and relies on the neighbour to come with the fire trucks. It seems strange to me that Canada — Parks Canada in particular — doesn’t have any water bomber aircraft, given that there are so many forest fires.
Mr. Campbell: We do not own the aircraft. However, the Government of Canada has contracts for helicopters for our parks. We primarily use the helicopters for forest fires and other types of —
The Chair: But doesn’t Parks Canada have helicopters either?
Mr. Campbell: No, but we have contracts. It’s probably one of our main contracts.
The Chair: Thank you very much.
This is now our second panel for today.
We are pleased to welcome representatives from the Office of the Parliamentary Budget Officer; we have with us for the first time the new Parliamentary Budget Officer, Ms. Annette Ryan, as well as Mr. Jason Jacques, a regular, Director General, Economic and Financial Analysis; Mr. Mark Mahabir, Director General, Budget and Cost Analysis and General Counsel, and Mr. Govindadeva Bernier, Director, Budget Analysis.
Welcome, and thank you for being here.
We will now hear opening remarks from Ms. Ryan.
Ms. Ryan, you now have the floor. We will then move on to the question period.
Annette Ryan, Parliamentary Budget Officer, Office of the Parliamentary Budget Officer: Thank you, Mr. Chair, Mr. Deputy Chair, senators, and members of the committee. Thank you for inviting me to appear today as part of your review of the 2026-27 Main Estimates. I am pleased to be here in my new role as Parliamentary Budget Officer and as an independent officer of Parliament.
Let me begin by noting how impressed I have been by the warm and professional welcome I received from the dedicated and highly professional team at the Office of the Parliamentary Budget Officer.
As you mentioned, I am accompanied today by Jason Jacques, Director General, Economic and Financial Analysis. I am also joined by Mark Mahabir, Director General, Budget and Cost Analysis, and General Counsel, as well as Govindadeva Bernier, Director, Budget Analysis, who led the work on our report on the 2026-27 Main Estimates, which will be released this week.
As you know, the Office of the Parliamentary Budget Officer typically publishes a report shortly after an expenditure budget is tabled. That was not the case this year due to the delay caused by the vacancy in the position of Parliamentary Budget Officer. Our report will be released on Thursday.
[English]
I am particularly pleased to appear before you today as part of your study. As part of my appointment process, I committed to paying close attention to how the government’s budget measures are implemented from their announcement through to the inclusion in estimates and, ultimately, their reporting in Public Accounts. This is a central element of parliamentary oversight, and I understand that this issue has been of particular interest to your committee for several years.
In your report on Main Estimates for the year ending March 31, 2024, you state:
The committee believes it can be very difficult to track the amounts spent on various budget measures, from the time they are announced in the federal budget to the time the amounts are requested in the estimates, and then authorized in supply bills and reported in the Public Accounts.
This is precisely what I would like to help you address, and I note that, in the fourth paragraph of the 2026-27 Main Estimates, the document reads:
These amounts reflect previous funding decisions, such as initiatives announced in prior federal budgets and reductions approved as part of the comprehensive expenditure review. Departmental Plans to be tabled shortly after these estimates will provide additional details on the CER and how financial resources will be used to achieve planned results.
[Translation]
Main Estimates 2026-27 provide for $502.8 billion in budgetary authorities. Parliamentary approval is required for $230.4 billion. Current statutory authorities amount to $272.4 billion.
I also note that these Main Estimates are the first since the government adopted a fall budget cycle. As such, they include $14.1 billion for Budget 2025 measures — approximately 72% of spending related to those measures — which are expected to be included in the 2026-27 estimates.
In conclusion, I note that the Department of National Defence accounts for the largest share of spending related to the 2025 budget, at $9 billion.
We would be pleased to answer any questions you may have.
The Chair: Thank you very much.
We’ll aim for four and a half minutes per senator.
Senator Forest: Thank you for joining us. This is your first appearance, but certainly not your last.
I want to begin by congratulating you on your appointment. We look forward to working with you. I would also like to thank you for the five briefing notes you released on Monday regarding the spring economic update.
To that end, I would like to take advantage of your presence to get your initial thoughts on last week’s economic update. I don’t think this comes as a surprise to you, since you’ve already made a presentation to the Standing Committee on Government Operations and Estimates. What are your thoughts on the debt, spending control and the sustainability of the government’s fiscal framework in the context of this update?
Ms. Ryan: Thank you for your rather broad question.
I think this is an important framework for your discussions.
In the Spring Economic Update 2026, we saw an upward revision of economic forecasts, which translates into increased fiscal room. As I recall, this change in fiscal room is around $60 billion, most of which the government has spent on new initiatives.
I think the Spring Economic Update 2026 lacks important links to the budget. That was the recurring theme of the notes we released yesterday. As I mentioned, based on your report on the 2024-25 estimates, regarding the budget cycle, the estimates cycle and the objective of tracking government spending outcomes, it is important that we be able to track the government’s proposals. They follow up on announcements that are usually very positive and highlight all of the government’s aspirations.
However, it is still important to recognize the challenges, the risks of these programs, the timelines, and how these realities translate into estimates where we see phenomena such as the reprofiling of funds or changes to budget plans. So I think that framework, which is reflected from one publication to the next through the estimates and public accounts, is part of your work. Then, using our notes, we established a structured framework to track these elements throughout the cycle.
Senator Forest: Regarding the sovereign wealth fund, I’m not sure if you’ve understood the government’s rationale for launching this initiative. What makes it unique? How does it differ from the tools the government could already use to support infrastructure projects or other important projects?
Ms. Ryan: As I said last week before the House of Commons Standing Committee on Government Operations and Estimates, in our view, the spring update raises more questions than it answers on this type of issue. The spring update noted that this fund has two main objectives. The first is to grow the Canadian economy through infrastructure investments and projects of national significance. That is a fairly broad goal shared by most current programs at Innovation, Science and Economic Development Canada and other economic departments. The second objective is to offer Canadians an investment in this fund and to generate a return on that investment.
It has been argued that taxpayers are already investors, since this fund is financed by tax revenues derived from taxpayers. So it is difficult to determine what we gain in terms of that investment aspect and how all of this improves performance, according to the initial objective.
[English]
Senator Cardozo: Ms. Ryan, congratulations on your appointment as the new PBO. We look forward to working with you.
I want to take this opportunity to thank Mr. Jacques for his diligent service as Interim Parliamentary Budget Officer and for being a regular visitor to our committee.
We’re supposed to talk a bit about the budget of your office as part of our look at the estimates. If you could just confirm your total budget last year and this fiscal year.
In terms of the organization of your office, do you plan to make any changes to it, and if you need more resources for your office to carry out its responsibilities effectively, how will you go about seeking more funds?
Ms. Ryan: I will be as complete as I can be, senator, with tomorrow being my second week on the job.
On balance, the funds are sought through the process for parliamentary officers. During the last fiscal year as Interim Parliamentary Budget Officer, Jason did put forward a voluntary reduction of 5% from that amount. That’s in a context where the office had traditionally been running surpluses of up to $1 million. That conditions the extent to which changes to the office could be envisaged in the short term.
In terms of what changes I would make to the office, I definitely think that I’ve walked into an organization and a culture of excellence, and I cannot say that enough. The office is, absolutely, staffed by competent, rigorous and dedicated civil servants.
Through time, I would like to make sure that we keep in mind the recommendations of the OECD report, to think about governance from wider unities of Canadian thought leaders and such, but I see that as more evolution than revolution.
Senator Cardozo: What is the total budget?
Ms. Ryan: I have in mind that it is $8 million —
Senator Cardozo: I’m seeing $8.4 million.
Ms. Ryan: Yes, $8.4 million. Thank you.
Senator Cardozo: Is that all?
Ms. Ryan: We have 40 staff. It’s small but mighty.
Senator Cardozo: You do good work for that. I would like to get your comments on the announcements in the economic update about the apprenticeship program and how you see that rolling out. Is that an effective way to roll that out?
Ms. Ryan: Thank you, senator. The Spring Economic Update spoke about Team Canada Strong as a suite of measures around apprenticeships. At the highest level, the targets that they set forth are clear and measurable. They want to bring forward an additional 80,000 to 100,000 new skilled tradespeople through the Red Seal program. That’s very positive; that’s a target.
The announcement had a number of high-level spending targets that will benefit from overall funding. That is positive, and it’s critically important to avoid bottlenecks for the government’s otherwise very ambitious plans in terms of capital investment. That includes major infrastructure projects, housing and defence at a time when provincial governments are starting to spend on infrastructure as well.
From that perspective of overall consistency, that’s welcome. We will be watching to see the details of those programs to make sure that the spending aligns with, essentially, gaps in the Red Seal completion process. For example, late-stage apprenticeships as a traditional gap in terms of getting people from the initial start of Red Seal training programs through to actually getting the full certification.
Senator Ross: Welcome to your first meeting with the National Finance Committee.
I want to ask you a question about the Canada Strong Fund. It’s a bit of a follow-up.
Is it a concern for you that it will be funded by debt versus surplus? Do you believe that projects that are typically funded or could be or should be funded by the private sector might now be funded by the Canada Strong Fund, or do you believe it will attract or leverage private investment? How do you think it relates or compares to BDC’s Canada’s Growth Fund or the Infrastructure Bank? Finally, do you think it might be the solution to fixing what is sometimes referred to as Canada’s private investment deficit?
Ms. Ryan: Thank you, senator. I think we have many of the same questions. The answers to these questions will rely on the government setting forth a more detailed plan of how they see this sovereign wealth fund as solving a specific gap in overall access to financing and capital in Canada.
As you noted very well, EDC, BDC and the Canada Infrastructure Bank all have similar mandates of filling gaps in the financing fabric of Canada. There is also a long-standing concern that private sector financing for these projects may be crowded out by governments searching for the same return on investments. I think the issues that you’ve queued up are really at the core of what we would like to see more of in terms of this plan.
I also think that the aspect of financing this fund through debt is something that we are concerned about, and we will want to pay close attention to how that debt is recorded in forward fiscal tracks and forward debt and deficit tracks. To our understanding, the government has included debt costs associated with the fund in its forward track in the spring statement, but certainly, the idea of issuing debt in order to finance yet another third-party investment vehicle, which will need to have its own overhead and all of the cost that that incurs, with an unclear mandate of the gap that it’s trying to fill, are big questions, and we will want to stay close to that one.
[Translation]
Senator Gignac: Welcome, Ms. Ryan, and congratulations on your appointment, once again.
You know how important the Parliamentary Budget Officer is to this committee. This is important to us.
My first question is a bit sensitive. I’ll address an important topic next, but I have to ask you my question first.
As a French-speaking senator, I always read your documents in French. When you published your assessment of the spring economic update on fiscal anchors and fiscal sustainability, I was a bit surprised to read the following: “Le ratio de la dette fédérale au PIB devrait reculer, passant de 2,1 % en 2025-2026 à 1,4 % d’ici 2030-2031.” I immediately understood that there was a problem with the French version. Obviously, you are referring to the deficit, not the federal debt-to-GDP ratio.
I have a suggestion for you. You have a budget of $8 million, and you have 40 people under your authority. I have had the privilege of serving as a minister in my life, but ultimately, we are always responsible for our teams. So I urge you to pay attention to the French version of the documents that are published. I haven’t gone through them to see if there were any other typos. This may be the only typo in all the documents published over the past year. I still wanted to remind you of the importance of carefully reviewing the French version before it is published.
Let’s now talk about the two fiscal anchors, which are to reduce the debt-to-GDP ratio and balance operating expenditures. Have you had any discussions with the Department of Finance about the definition of a capital investment? It can be easily met, depending on the criteria used for capital investment, since that is not quite the definition recognized in the national accounts. What is the situation on that front? What is your perspective? The IMF says that greater clarity would enhance transparency. Have you had any discussions with the Department of Finance on this?
Ms. Ryan: Thank you, senator.
I personally apologize for the error in the translation. Thank you for pointing it out. We’ll make the correction. I will just say that we made a choice to expedite the publication of these notes in order to keep parliamentarians informed in real time. We reviewed those translations as best we could. We’ll have to see how this error occurred. I take this seriously.
As for your question about the government’s fiscal approach, I would like to clarify that the government’s primary focus is the deficit relative to GDP. The secondary focus is to balance the operating budget and operating revenues. In this context, the definition of capital effectively remains as a residual of items designated as operational. We don’t have that list. We need a list of expenditures that the government considers operational, as well as revenues.
This is of interest to us because the government states that some of these tax measures are capital investments. It’s important to have that detail for a number of reasons. First, it is important to understand the government’s budgetary philosophy, which is to view tax measures as investments. Second, it is a matter of transparency and honesty. The government manages its affairs according to set rules.
Senator Hébert: Welcome, Ms. Ryan. Congratulations again on your appointment.
My first question is related to your note on capital investment priorities. I’m referring to what my colleague Senator Cardozo was talking to you about earlier, namely the planned training of 80,000 to 100,000 workers. In your conclusions, you mention that, given national demographic projections and the aging population, this will be a key factor for success.
Do you think a restrictive immigration policy could have a negative impact on achieving our objectives?
Ms. Ryan: Thank you for your question, senator.
I will simply answer yes, insofar as the immigration of workers with construction skills contributes to the labour force for major construction projects and capital development. That has been important so far. It would have an impact on the supply of workers with those skills. We haven’t conducted a specific analysis of the nature of the composition of the decline in immigration with those skills. I want to be clear about that. It is possible that we will continue this immigration option in a context where overall numbers are more limited.
Regarding the aging population, a significant number of workers in the construction-related trades will be retiring in the coming years, which aligns with the investment trajectory in this area.
So it’s good to have a target like 80,000 to 100,000, which is clear and can be tracked. However, we require the government to be transparent in terms of projections, indicating that this target is the right one and that it will remain appropriate for years to come.
Senator Hébert: Thank you. I think we share the same concerns about this, as immigration made it possible to have an influx of workers in real time or nearly so, with adjustments to training.
At the end of your report you released on economic and financial developments, you mention defence spending, and you say:
It is unclear that the full cost of Canada’s NATO 5 per cent GDP commitment — estimated by PBO at approximately $63 billion in additional deficit impact by 2035-36 — is reflected in these figures, representing a material upside risk to the deficit and debt projections.
Actually, these are not NATO expenditures.
Are you saying that the debt over the five-year period is underestimated by about $63 billion? Is that the case in the data that was presented? Can you clarify this for us?
Ms. Ryan: That’s exactly right, senator. These expenditures are not included in future projections. They will appear in the update. So, if we include these expenditures, which account for 5%, that would have represented a $63-billion increase.
[English]
Senator Galvez: I want to add my congratulations to you both, and thank you to all your team. It’s wonderful to have you. You are an incredible right hand when we have to discuss budget bills.
I want to take this opportunity to ask you a question that I asked the previous PBO Mr. Jacques. In the last eight years that I’ve been sitting on this committee, I have seen budgets and expenditures increase. We have health costs. We have the service of the debt. We have settlements with Indigenous Peoples. We have now extreme weather events. Right now, we have the war in the Middle East and the defence costs.
In this committee, we concentrate a lot on how the government allocates the budget and expenditures, but nothing, in my opinion, about revenues. That is very different with respect to the other house, which has the Standing House of Commons Committee on Finance and Standing House of Commons Committee on Public Accounts.
I feel like, in this committee, it’s a little bit like I’m watching one part and not the other. I was chair of a department at Université Laval, and I had the board. I knew how much I had and how much was in each place. It was important. In this case, how do you think you can help us with that?
Ms. Ryan: Thank you, senator. It’s an excellent point. These are questions that we can work into our work plan as we move forward. I look forward to meeting senators, committee chairs and committee members to understand the issues that you would like to see more of in the analysis of the Parliamentary Budget Officer, or PBO.
We must be prudent about how we set up that work plan to be able to respond to committee requests that come through channels that have priority in any given sitting of Parliament.
However, I see our work plan as something of a portfolio. To the extent that we have PBO-driven reports that we can bring forward, as we did yesterday, then that consultation with senators and others helps us to be much more targeted and precise about the priorities of where we can do analysis. I look forward to understanding what you would find most helpful, and let’s see what we can do.
Senator Galvez: Two specific issues for me are the service of the debt that is in dollars and the changes that are occurring geopolitically with respect to the dollar. I just came from Colombia, where I heard a lot about Brazil, Russia, India and China, or BRIC, and the changes in trading petroleum, which is not petrol dollars any more but in another currency, and that will affect everything.
The other issue, as my colleague Senator Forest mentioned, is the sovereign wealth fund. We heard that there is the possibility of asking for credit to be put in there, and you rightly pointed out that we already invested because the pension plan is for that. Now we have our money put aside.
The sovereignty fund that I’m very familiar with is the Norwegian fund, which gave $1 billion for the protection of the Amazon because they are so rich. It’s made out of the revenues that come from oil. However, we don’t have this. So how will we manage this? Thank you so much.
Ms. Ryan: Thank you, senator. Those are all strong points, and I’m not quite sure how to necessarily improve on them or inform them specifically.
The PBO has traditionally had a close interest in terms of the evolution of debt and different issues about how international reserve currencies are changing. These are pertinent and also very large questions.
There is probably a combination of working through what can fit on our work plan versus, perhaps, in lieu of doing detailed costing or analysis on some questions, perhaps we could help you make more precise the questions that you might ask, for example, the Bank of Canada or Finance Canada in terms of how they manage these questions.
I see a flexibility in how we can use our 40 people, which includes 30 analysts, to the best effect and to contribute best.
In terms of the sovereign wealth fund and that interplay with pension funds, you raise a good point: Many of these large funds have a mandate to invest outside of their borders as something of an insurance policy against downturns, domestically.
It goes, again, to the question of what the goal of this fund is. Is it to maximize investments into the fund or is it to achieve Canadian public policy goals? Depending on what problem they are trying to fix, the design of the fund and the organization should follow that. From there, we could provide better comment.
Senator Galvez: Thank you.
Senator Pupatello: Congratulations and welcome. Mr. Jacques, thanks so much for all the diligent work you did with our committee. I see you’re still going to be doing that.
One of the questions I had started with Mr. Jacques was the Buy Canadian influence on our books in the country. What kind of a work plan could you measure the benefit of the Buy Canadian policy in a granular enough detail? Some of the recent articles are suggesting that it’s almost “hit or miss” depending on what region of the country you’re in. If you’re along a border community it’s different.
I would prefer to have something more granular than just comparing GDP. That is just not enough because you don’t know what would have happened anyway, and I would really like to know that. That’s just a comment. We could take that offline.
My question is about how we are measuring the debt-to-GDP ratio against countries from the Organisation for Economic Co‑operation and Development, or OECD. There has been some discussion around Canada, including pension funds as its asset, which shows a better debt position. My view is that, in some of the other OECD countries, they specifically don’t show it because it would make their numbers so much worse: France and Italy, to name just a couple.
Their deficit in their pension is truly a liability that they need to include. In fact, should the argument not be this: Why aren’t they including a statutory obligation in their debt figure as opposed to why are we including the asset of our pension fund because we happen to have it? Again, it is that same statutory obligation.
Ms. Ryan: That’s a great question, senator. Thank you. I note with interest your interest in Buy Canadian and look forward to talking about that and carrying on the work you’ve started with Jason.
In terms of this question of debt-to-GDP ratio versus OECD comparators, and whether you do it with pension obligations included or different benefit programs, such as government pensions, included or not, it’s very important to keep in mind that different measures tell you different things.
There has been a lot of focus on which measure is the right one that will tell us if we are on the right track or not. In our second note that we published yesterday on fiscal anchors and fiscal sustainability, one of the points that we want to start a conversation about is that there are many measures that tell you different things.
In some situations, you want to take account of forward costs of social security and social services for comparability across cross-countries, as you put forward very well.
If I could extend that to say that there is also this question: Are Canadians happy with how much they are spending on debt charges, which relates to the federal debt? That discussion about the preference of Canadians for how much of their tax dollars are going towards debt service charges gets lost in that a bit.
Jason has already pointed out different international work on how we could enrich that set of indicators to ensure that there is a menu of indicators that parliamentarians could use to inform different parts of this question, more so than saying, one measure is the one measure that we need versus this other measure is the good one that will do it all for us.
Senator Pupatello: Realistically, that chart is indeed accurate, and we have been including the pension for 20 years. I don’t know when it started, but certainly, well before 2006. I had to go check how long we had been doing that.
I’m curious whether we should just then say that pensions are included or not included so that people would feel more comfortable with that? Clearly, we are counting that, and I have to say, again, that a pension obligation, if you’re in Italy, is a liability for that government, and they are not included that information in that chart.
I want to highlight that. It isn’t us not being up front. We are actually including what we owe, and in this case, it’s not a debt.
Ms. Ryan: It’s a point that is well taken, senator. Let us take that away and try to be as clear as possible in our documents about what is included in different definitions and what the government is, or is not, including when they present — usually — the better news. We will keep an eye on what they are not presenting and try to be as clear about what is in or what’s not in.
Senator Pupatello: Thanks.
Senator Pate: I join the chorus of welcomes to you and the incredible thanks to your department for the years of work and contributions to our work as a result.
Yesterday, you put out the assessment of the spring economic update with departmental spending and new measures. I noted that one of the points raised was the fact that money has been received or has been allocated in the budget to corrections for new departmental spending measures, such as extending support for federal correctional institutions by Correctional Service Canada.
Then you go on to mention the absence of much additional information, particularly the absence of key planning and governance detail for many new measures and front-loaded spending profiles.
I’m curious as to what you see that we could be doing about this. Certainly, it’s not the first time that your office or, for that matter, the Auditor General and others, and the Correctional Investigator, have raised concerns about the manner in which spending has been allocated.
At this committee, we have, in fact, tried to interrogate where money received, for instance, to replace segregation units and with supports from mental health services, went. We have yet to receive that response.
What are the next steps for you and your office? What may we best do to assist you in that process in gathering that information so that Canadians are aware?
Ms. Ryan: Thank you very much for those questions, senator.
The agenda and the objectives that you set forth with this question are very much shared. There is a lot of space to look at how the departmental plan process rolls out, as well as the departmental results set of documents rolls out. Those documents are meant to be a complement to essentially both the budget cycle and the spring estimate-type documents that are forward-looking and all about promises.
Then you review the Main Estimates and Supplementary Estimates which are a very different focus. It’s much more about authorizing spending on a flat level. You lose that detail from the promises and the objectives to, if I may, the plumbing of who is authorized to spend what in what department.
That agenda of how we can build the databases and the means to track, not just what was in the last budget, but what was in previous budgets by departments.
Taking corrections, for example, how can we look back over the last 5 or 10 years and match those objectives of, “Here is $50 million for mental health services; here is $26 million to achieve X, Y or Z.”
Doing that analysis on a structured basis is the type of work — these are early days and I’m trying to give a directional answer, not a promise — that I think could then help you as parliamentarians look back at what those funds that you are approving in Main and Supplementary Estimates are meant to achieve.
This is what they were promised to do three years ago. Okay, we are now in year two or year three of implementation. I would like to know where you are on that mental health program that was authorized three years ago at $50 million. Has the money been spent? What results have you gotten?
There’s the aspect of giving you the information to be able to ask those types of questions in a targeted and structured way. Then I think there’s a separate discussion to be had with TBS in particular about that design of departmental plans and departmental results documents in terms of their clarity, brevity and focus on building that bridge from budgets to estimates.
I apologize, chair, if that’s a long answer.
The Chair: That’s the answer.
Ms. Ryan: I’m quite excited about this.
[Translation]
The Chair: I have a question about pension funds. I find that pension funds do not contribute enough to the Canadian economy in percentage terms when compared to what is being done elsewhere, particularly in Australia.
Is there a way to provide incentives for pension funds to invest more in Canada, especially in infrastructure? When I looked at the Canada Pension Plan website, I was very surprised to learn that they don’t invest in retirement homes in Canada, whereas they do so in Europe. So the argument about ensuring diversification and returns isn’t very consistent. In addition, their return targets aren’t very high. I believe that, if we invested 3.6% or 3.7% of the Canada Pension Plan’s assets, we would get about $25 billion, the amount the famous sovereign wealth fund borrowed. Investing just 3.6% or 3.7% more of the Canada Pension Plan’s funds in the Canadian economy amounts to approximately $25 billion.
Are there any comparisons with other countries regarding the investments that pension funds might seek? Especially since they don’t pay taxes. All the money that goes into pension funds is tax-free. Phenomenal fortunes are being built up, which guarantee pensions for retirees. However, I think if we were to survey retirees, they would want their institutions to invest more in Canada and help rebuild our infrastructure because, in many cases, it really is about rebuilding that infrastructure. I’d like to hear your thoughts on this.
Ms. Ryan: You’re asking a series of excellent questions, senator. I believe your colleague explored these issues in the case of Norway.
I would say that an important aspect of what you’re proposing is the investment objective of the Canada Pension Plan funds. These funds are structured with governance designed to maximize returns on investment for the people who have contributed to this plan.
To that extent, the issue of identifying proposals for these funds that serve the broader interests of Canadian taxpayers and citizens is a conflict with the objectives. That’s an important aspect, and I think we need to look at the other objectives of this structure.
The Chair: If I may, there are ways to resolve that. The Government of Quebec, together with the Caisse de dépôt et placement, has guaranteed a return on the REM investment. Therefore, the Government of Canada could very well guarantee a return on the infrastructure fund that could be created using revenue from pension fund contributions.
Ms. Ryan: I think it’s important to keep in mind that this fund is managed by the provinces and the federal government. To that extent, there is an agreement that the objective remains to maximize the return on investment. It’s possible to have other configurations for those funds. However, I think it is important to keep in mind that this pension fund is —
The Chair: The problem with this argument is that it suggests that investing in Canada is not profitable. We have a globetrotting Prime Minister who travels all over the world to encourage people to invest in Canada. However, foreign investors will wonder why they would invest when our pension funds aren’t even doing so.
Ms. Ryan: I would like to highlight one thing. There are a number of issues in this very rich debate. However, one of the objectives of maximizing these returns is that Canada’s economy, which is based on natural resources, presents a risk against a —
[English]
— to the extent that Canada is a resource-based economy, if you have a slow down or a retraction in terms of commodity prices, that poses a risk that, when that happens, all returns in Canada will be diminished. So what you get by investing in other countries, as many of these funds do, is essentially a buffer.
[Translation]
The Chair: Meanwhile, we are investing in Dubai and in Australia. Thank you very much. That was my question for today.
I believe that concludes our meeting. Thank you very much for your contribution. I think we will see each other very often.
Ms. Ryan: Thank you very much.
The Chair: We will meet again tomorrow at 6:45 p.m., with deputy chair Senator Forest presiding.
(The committee adjourned.)