Evidence of meeting #27 for Government Operations and Estimates in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was sandbox.

A recording is available from Parliament.

On the agenda

Members speaking

Before the committee

Matthews  Secretary of the Treasury Board of Canada, Treasury Board Secretariat
DeJong  Assistant Secretary, Regulatory Affairs, Treasury Board Secretariat
Legault  Legislative Clerk
van den Berg  Committee Researcher

11 a.m.

Conservative

The Chair Conservative Kelly McCauley

Welcome to meeting number 27 of the House of Commons Standing Committee on Government Operations and Estimates.

We welcome back the President of the Treasury Board and his associates for our continuing discussion on various subsets of Bill C-15.

President Ali, I understand you have an opening statement for us. The floor is yours for five minutes, sir.

11 a.m.

Brampton—Chinguacousy Park Ontario

Liberal

Shafqat Ali LiberalPresident of the Treasury Board

Good morning, everyone.

Thank you for inviting me.

I want to begin by acknowledging the heartbreaking tragedy in Tumbler Ridge. As the parent of three children, I can only imagine the shock and sorrow being felt by affected families and the community. The country shares their sadness and grieves with them.

As for the business of today, I'm pleased to be here with officials from TBS to discuss the budget implementation act, specifically divisions 5 to 7.

An effective regulatory system maintains appropriate controls. It also keeps pace with innovation. To this end, budget 2025 proposes to expand the use of and increase the transparency of regulatory sandboxes.

Regulatory sandboxes have been in use in certain departments since 2019. They help the government figure out the best way to regulate new innovations before putting permanent rules in place. This means products and services can be introduced more quickly into the marketplace using the most appropriate regulatory approach.

The proposed expansion of sandboxes would extend their use across government. However, they could only be used for a specific, time-limited purpose, where there is a clearly defined benefit to the country and Canadians. They would also need to follow a rigorous and transparent process.

First, advance notice of the proposed sandbox would be publicly reported in a department's forward regulatory plan. Once approved, sandboxes would be publicly reported by the responsible department and in an annual report to this committee. At all times, safeguards to protect Canadians' health, safety and environment would be maintained.

The budget implementation act also includes proposals to help us spend less on government operations so we can invest more in areas that matter most to Canadians. As members know, we are reducing the size of the public service by approximately 16,000 FTEs. This is difficult but responsible work.

To help reduce the impact on employees, budget 2025 proposes a voluntary early retirement incentive. This program would enable employees to retire early without financial penalties. After the review of Bill C-15, and because of the challenges we all face together as Canadians, we must work together and stand up for the workers who built this country and ensure that they have the respectful retirement they have earned.

Budget 2025 also proposes important changes to the Public Service Superannuation Act to extend early retirement benefits to firefighters, CBSA officers, Parliamentary Protective Service officers and others in similar roles. They would be able to receive their pension after 25 years without financial penalties. This recognizes the demanding nature of the day-to-day duties of these employees.

These proposals are collectively aimed at helping government operate more efficiently and effectively, a goal that I know is important to this committee.

Thank you, Mr. Chair.

My officials and I would now be pleased to answer your questions.

11 a.m.

Conservative

The Chair Conservative Kelly McCauley

Thank you, sir.

We'll start six-minute rounds with Ms. Kusie.

Ms. Kusie, welcome back to OGGO. It's wonderful to have you here.

11 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

Thank you. It's a pleasure to be here, Mr. Chair.

Minister, your budget unveiled a plan to eliminate 40,000 jobs in the federal public service by 2028-29. Since then, 68,000 public servants have received the notice that they may be eligible to apply for the early retirement incentive as a mechanism to eliminate these jobs. Does the Treasury Board have an estimate of how many of those 68,000 public servants will apply for the early retirement incentive?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

Thank you for your question, and I welcome my critic. I'm looking forward to having that coffee; our teams are working on scheduling that.

Your question is on workforce adjustments. We have sent 68,000 letters to the people who may qualify for that program. There are certain options. We don't know how many will come forward. That program will roll out after the budget implementation act gets royal assent.

At this point, per the bargaining agreement, we have sent those letters to them, and we'll have more to say when we have clarity on that.

11:05 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

Thank you for that response.

As you're not aware of the number, how are departments organizing their job losses and restructuring if you don't have an estimate of how many public servants will voluntarily retire? That's a pretty important number for workforce adjustment planning.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

We have sent the letters, and we know how many qualify, but we don't know how many will be eligible, because not everyone who has been sent a letter will be considered for that program. There are certain criteria. There are skills. It's nerdy.

Because more technicality gets involved, I'll ask my deputy to give you—

11:05 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

That's fine, Minister. Thank you so much.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

It is for your benefit and that of the Canadians who are watching. I think it's a very important question.

11:05 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

Minister, I don't have a lot of time, and you're not providing me with a lot of information. I'm going to move on.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

Okay.

11:05 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

In December, you announced that the public service pension fund had an unpermitted surplus of $900 million and that you were moving this money into the general revenues of the government. Where will that money be spent?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

Can you repeat your question, please?

11:05 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

In December, you announced that the public service pension fund had an unpermitted surplus of $900 million and that you were moving this money into the general revenues of the government. You've seen this before. I'm sure you were briefed when you received this position. Where will this particular allotment be spent, President?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

In that pension fund, if we have any surplus on certain.... There's a threshold. If it's over that threshold, the money moves into trust funds.

I could ask my deputy to clarify a bit more for your benefit and that of the Canadians who are watching at home.

Bill Matthews Secretary of the Treasury Board of Canada, Treasury Board Secretariat

The money has indeed been brought back in. It's been invested, but there have been no decisions taken yet in terms of how that money will be spent.

11:05 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

Thank you. I'm going to move on.

In 2023, Minister Anand announced that departments would be ordered to find savings of $15 billion. However, the details were scant. Unsurprisingly, the 2024 and 2025 public accounts of Canada indicate that those savings have yet to be achieved.

On Monday, I asked your department whether proposed savings announced in the comprehensive expenditure review would be realized or whether they would be dealt a fate similar to the 2023 ill-hearted attempt at savings. A senior official actually stated, “I don't think you will be able to see a decrease as compared to what was announced in the budget”. Do you agree with that statement, President?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

What I can tell you is that the comprehensive expenditure review will achieve savings of $9 billion in 2026-27, $10 billion in 2027-28 and $13 billion in 2028-29.

11:05 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

These are all projections. As I indicated, your government failed on the 2023 objectives. I just received on Monday from a senior official a lack of confidence that these numbers will also be achieved.

A hundred days ago exactly, the government unveiled the initial details of the CER, the comprehensive expenditure review, in the budget, yet here we are today with your own department stating that your own spending reductions will not be met despite the continuous forecasts you're putting forward. This isn't just me doubting your savings. It's your own senior officials, which should be very concerning for you.

How do you expect Canadians to believe that your government will actually lower spending as you've promised if your own Treasury Board officials don't?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

I don't know where that is coming from to you, but what I know is that proposals we received from 102 organizations—

11:10 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

It's your comptroller general. You should probably have a conversation with her.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

I'm sorry. Can I respond to that question?

11:10 a.m.

Conservative

The Chair Conservative Kelly McCauley

Give a brief response, please.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

We received proposals for the comprehensive expenditure review from 102 organizations. Other than DND, CBSA, CSIS and the RCMP, all organizations have put forward this plan. I believe those are the organizations that are delivering services to Canadians. They're responsible and they have put forward this plan. I'm confident that we will achieve our—

11:10 a.m.

Conservative

The Chair Conservative Kelly McCauley

Thank you.

11:10 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

Thank you.

11:10 a.m.

Conservative

The Chair Conservative Kelly McCauley

We're going to Mr. Gasparro, please.

Vince Gasparro Liberal Eglinton—Lawrence, ON

Thank you, Minister.

My line of questioning is going to focus on “25 and out” and also on regulatory sandboxes.

As the parliamentary secretary for combatting crime, obviously I get an opportunity to speak with our brave men and women in the RCMP and the CBSA relatively regularly. For them and for others, can you explain the difference between “25 and out” and early retirement, please?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

It's a very important question.

First of all, I'd like to thank our frontline workers for keeping Canadians safe and for the sacrifices they make. It's commendable.

There's a major difference between “25 and out” and early retirement incentives: “25 and out” is permanent. It will stay if we pass this budget implementation act. It is there to stay, whereas the early retirement incentive is just for the time being, for a certain period of time. It is temporary. That is a major difference.

Frontline officers—those in CBSA, firefighters and others of a similar nature—qualify if they have 25 years of operational service. They could retire early without penalty. That program will stay permanent. That is the purpose.

Vince Gasparro Liberal Eglinton—Lawrence, ON

That's great. Thank you.

Moving on to the regulatory sandboxes for a moment, I've spent my private sector career financing clean energy projects and infrastructure. How can regulatory sandboxes help Canada's clean energy sector innovate at the pace needed to meet, part one, our climate objectives and, part two, our energy demands in the 21st century?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

Budget 2025 expands the use of regulatory sandboxes to departments and agencies beyond Transport Canada and Health Canada, which already have sandbox authority. These sandboxes help to regularly test new ideas safely before deciding on a permanent rule change. They can only be used for a limited time.

For example, if you're going to implement or make a rule for any department, but you haven't tested whether it would work and you will be achieving objectives in delivering services to Canadians or contributing to the growth of our economy, it would be a loss of time and a loss of resources. A regulatory sandbox gives you the opportunity to test those innovative ideas to see if you can achieve the result. Then you can make rules and regulations so they can benefit Canadians in delivering services.

Vince Gasparro Liberal Eglinton—Lawrence, ON

Do other countries or other jurisdictions use regulatory sandboxes?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

My understanding is that in the G7, we're the only country that has very limited use of them—in two departments since 2019. My understanding is that in the G7, every other country is using them because it saves time and resources, especially when we're going through this critical time.

This is a global shift. This is a time when we need to act fast. We need to focus on delivery or innovations in a timely manner so we can compete with other economies and can grow our economy. These tools, which are safeguarded by regulations and have rigorous safeguards, could be useful in achieving goal and objectives, and putting rules in place.

Mike actually has a passion toward this. His mind and soul are very genuinely into it because he understands what it is. There's a misconception.

I'm going to ask Mike if he can highlight this and give a bit of clarity to my colleagues and the Canadians who are watching at home.

Michael DeJong Assistant Secretary, Regulatory Affairs, Treasury Board Secretariat

Perhaps I could give an example of a regulatory sandbox involving clean technology.

In July 2025, the Department of Transport launched a regulatory sandbox to test what the safety requirements would be for battery-powered and hydrogen-powered locomotives. Currently, the rules around train safety are specifically geared toward diesel-powered locomotives. This sandbox became particularly relevant as Canada's railways moved toward decarbonizing their fleets.

Before the sandbox was ever launched, Transport Canada commissioned a number of risk assessments to identify where the potential risks were and how to mitigate them. Then it established a series of strict safeguards, including things like ensuring that there would be proper crew training, oversight and inspections. The results of that sandbox would then be used to inform the evolution of the rail safety rules to support the introduction of low-emission clean technology.

11:15 a.m.

Conservative

The Chair Conservative Kelly McCauley

Thank you very much.

We'll go now to Madame Gaudreau, please.

Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC

Thank you very much, Mr. Chair.

I'm going to go back to the basics because the answers I'm hearing are not really clear. I have asked myself the following question: What is a regulatory sandbox? I'd like to use an analogy and refer to what I have also seen in other countries. You start with a small parcel, a sandbox where you get to build castles and have fun. In some countries, demands framed around economic prosperity and innovation have pushed for more, and as I'm saying, this has now expanded into huge beaches. What I'm hearing this morning is that more sandboxes will be added and that this new practice will be expanded and regulated over time.

Personally, there are three things that make me extremely worried that things will get out of hand, and it concerns guardrails.

First, from a legal standpoint, how do you keep things from getting skewed when it comes to the competition?

Second, for the regulatory authority, working so closely with businesses can lead to a degree of proximity that may go too far. You can see where I'm going.

Third, there is the issue of transparency. Supposedly, decisions will be made publicly, but will they be properly justified? As parliamentarians, what is going to reassure us that the guardrails are in place?

When I hear a number of officials, who have appeared before this committee in person, tell us that they're not in a position to answer questions about how this will be regulated, how can I vote for this, seriously?

I would therefore like you to explain that, Mr. President of the Treasury Board.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

Thank you.

These are very important questions.

It's really important to understand regulatory sandboxes. There are so many speculations about them and so many misconceptions. We have had regulatory sandboxes in two departments since 2019: Transport Canada and Health Canada. They have been used only once at Health Canada, if I'm not mistaken.

Mike, is it Health Canada or Transport Canada?

11:20 a.m.

Assistant Secretary, Regulatory Affairs, Treasury Board Secretariat

Michael DeJong

It's Transport Canada.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

Yes.

There has to be a justification even before you think of bringing forward and using a regulatory sandbox. You have to do it publicly, and then you have to come to a committee, and all the regulations apply to that.

Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC

However, we need to know how and when we will be told what the regulatory authorities are doing. Your answer is clearly not sufficient, in my opinion. There must be transparency to make sure things don't get out of hand in terms of ethics, environment and conflict of interest. I'm telling you that the optics are not good. Canadians, including some public servants, have told us that.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

As I said, there is a rigorous and transparent process, and I believe in transparency.

First, advance notice of the proposed use of the sandbox is provided through the department's forward regulatory plan, which is published annually. Then the department engages with relevant stakeholders and FTP partners during the development process. Once a sandbox is approved by the responsible minister, the department must make public a summary of new exemptions, the decision-making process that led to the decision, and information on how stakeholders can provide feedback on the decision.

Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC

My time is up. You're telling me about the process, but on my next round, I'd like to hear about criteria and timing. That was my question.

Thank you very much.

11:20 a.m.

Conservative

The Chair Conservative Kelly McCauley

Thank you, Madame Gaudreau.

Ms. Block, go ahead, please.

11:20 a.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Thank you, Chair.

I will be splitting my time with my colleague Ms. Jansen.

Welcome, Minister Ali, department officials and the deputy minister.

Hidden in the BIA were changes that would allow ministers to exempt nearly any company, person or entity from any federal law except the Criminal Code. I'm perhaps following up on some of the questions that my colleague Ms. Gaudreau had.

What is the point of having a Parliament pass laws when ministers can just give connected insiders exemptions from those laws?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

There are legal bindings on doing innovative experiments. For that reason, this was proposed in the budget implementation act. Because it's a technicality, I can ask my—

11:25 a.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

No.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

It's just for your benefit and for clarity, because it's important to understand what it is and why it's there.

I'm going to ask for just 30 seconds for my deputy to give you clarity.

11:25 a.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

You have 30 seconds.

11:25 a.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

There is no exemption from any law. The exemptions have to be relevant to the legislation or regulation the minister bringing forward the proposal is responsible for, so they're boxed in.

Secondly, there is no exemption from the Conflict of Interest Act. That still applies. The goal here is to allow ministers to create a sandbox for innovation and experimentation within the rule set that they are responsible for, and that drives experimentation and gives a chance to test things out. I know there's a lot of confusion about this rule set.

11:25 a.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Thank you.

I would suggest that if you're watching the finance committee and some of the questioning of some of the ministers there, the only law that doesn't provide exemptions is the Criminal Code.

Here's another question for you. If there is no provision in the use of these powers that would exempt a minister from using them, then there is no provision that exempts a minister from using them while Parliament is prorogued. Why is there no restriction on the use of these powers when Parliament is prorogued?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

I think there are a lot of misconceptions around regulatory sandboxes. This tool is there to help regulators test new ideas safely before deciding on a permanent rule change, so it is—

11:25 a.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Thank you.

I understand that you have some talking points you have to provide us around these regulatory sandboxes, but what it says in the BIA is clear, and I think parliamentarians are very concerned when you start to provide these kinds of powers. They're called the King Henry VIII powers. Canadians are concerned, and parliamentarians are concerned.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

Thank you, my colleague. I don't want to get into that—

11:25 a.m.

Conservative

Tamara Jansen Conservative Cloverdale—Langley City, BC

I'm sorry. I thought you were going to answer the question, so maybe I can start my questions instead.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

I was going to...talking points, just to respond to that.

11:25 a.m.

Conservative

Tamara Jansen Conservative Cloverdale—Langley City, BC

Minister, at the last meeting, I was asking about the new exemption power, which some are calling the King Henry clause, and whether it would reduce red tape for small and medium-sized businesses. It's a disaster right now out there in B.C., with bankruptcy at 10%, and we've found out that it doesn't simplify a federal form, it doesn't shorten approval times and it doesn't shorten reporting requirements, yet it's the only concrete red tape reduction measure in the entire budget.

When they're at this point, why this? Why is it just for the big guys? I know you talked about how SR and ED was going to be wonderful for small guys. No coffee shop, no plumber and no construction worker will ever use SR and ED. Why is this just for the big guys?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

I understand that my colleague is more interested in getting clips for her riding rather than working—

11:25 a.m.

Conservative

The Chair Conservative Kelly McCauley

I'm going to interrupt you, sir. I'm sorry. It's inappropriate to make such a comment to a member asking a straightforward question.

Please respond.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

If I'm here to respond to questions, I should be given the opportunity to respond.

11:25 a.m.

Conservative

The Chair Conservative Kelly McCauley

Minister, I'm going to interrupt here again. It's not about the time to respond; it's about the comment about the clip. I think it's rather demeaning and inappropriate, but I will allow the extra time.

Please go ahead and respond, sir.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

Chair, if you like, do you want to give me a written script that I can read in my response? Is that what you want?

11:25 a.m.

Conservative

The Chair Conservative Kelly McCauley

We'll allow you time to respond, sir.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

I think when the member asks a question, I should be given the time to respond to that question.

There are a lot of misconceptions. Regulatory sandboxes help regulators test new ideas before deciding on permanent rule changes.

11:30 a.m.

Conservative

The Chair Conservative Kelly McCauley

We'll go to Ms. Sudds, please.

Jenna Sudds Liberal Kanata, ON

Thank you, Chair.

Thank you, President Ali and officials, for being with us here today.

I'm going to switch gears slightly, just to touch on the recent decision around return-to-office requirements for public servants.

As I know you know, President Ali, thousands of public servants live in my riding who do incredible and critical work every day serving Canadians. I feel deeply for them in this moment and for their families. I realize this decision is creating uncertainty for employees in an already challenging time.

I've worked in the public service. I started my career right out of school in the public service and spent 13 years doing that work, so I understand the dedication and commitment it takes to serve Canadians in that capacity, whether they're in the office, remote, virtual or hybrid. Going forward, I will continue to work with you, with our government and with my national capital region colleagues to call for meaningful flexibility as this policy is being implemented.

I also know, President Ali, that our government has multiple meetings coming up with union leadership. Seeking their input on implementation to help ensure that employees have the tools and supports they need in their workplace is critically important.

I look forward to working with you, and please know that I'll continue to be advocating for flexibility as this policy is implemented.

Having said that, voluntary measures are being prioritized in the workforce adjustments. How are these being managed primarily through attrition rather than through involuntary departures?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

That is a very important question.

I understand that a majority of your constituents are public service employees, and I'd like to thank them and all public service employees for their hard work, for their dedication in serving Canadians and for their contributions to Canada.

We all know we're going through a global shift and through different times where we have to change the course of working. We made a commitment during our election campaign to spend less and invest more, to grow the strongest economy in the G7 and to balance our operational budget in three years. Therefore, we're taking a transformative approach to the public service to deliver on priorities that Canadians want.

At this critical time, I think working together on site is necessary to build strong teams and effective collaborations. Of course, we'll continue to engage with unions on how best to implement that. Our obligations and commitments to meet accommodations and the needs of employees remain unchanged.

Since I took office, I have had multiple meetings with union leaders, and my team is continuously in touch with them. We will be getting their feedback and will see how best we can implement this.

Jenna Sudds Liberal Kanata, ON

Can you speak to the voluntary measures that are being offered specifically so that we're mitigating involuntary departures?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

I can ask Bill to briefly speak to this.

11:35 a.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

Departments have identified positions that will be reduced. In order to reduce them—and it's based on the work they do—the first line of defence is to notify employees, and they can put up their hands and voluntarily depart. This is why those letters are going out. Early retirement incentives, if approved by Parliament, are also coming, and that will be another option for those employees. The goal is to use those two vehicles to maximize voluntary departures.

To the extent that there are still employees left above what is in the budget, we will use selection processes to go down to the right number, but the first wave is voluntary and early retirement incentives.

11:35 a.m.

Conservative

The Chair Conservative Kelly McCauley

Thanks.

Madame Gaudreau, go ahead, please.

Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC

Thank you very much, Mr. Chair.

Let me go back to criteria.

There is reference to economic prosperity. The government says it wants to act fast and that it has to be efficient. They want to run this like a business, and not a country governed by the rule of law. That is what we're seeing now.

I'll give an example. What would be the criteria, and who would give the approval, if we want to build a nuclear reactor in my riding of Rivière‑Rouge? In the regulatory sandbox, we could say that since the project has potential and it's justified on the grounds of economic prosperity, the environment and social acceptability can be pushed aside.

In short, what are the preliminary criteria so that this type of decision won't ever happen?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

That authority will be under the minister responsible, who will be using a regulatory sandbox for any experiment or innovation idea before putting the rules in place.

I think this is more of a technical question you're asking me. If you will allow me, I can ask Mike, who is an expert in this particular area, to explain this for your understanding and for Canadians watching at home.

11:35 a.m.

Assistant Secretary, Regulatory Affairs, Treasury Board Secretariat

Michael DeJong

There are very strict requirements associated with all regulatory sandboxes. First, the minister must be assured that the regulatory sandbox is in the public interest. For example, it is important—

Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC

I'm going to stop you right there. We've already asked about what determines whether something is in the public interest, and the answer was that there was no definition.

What is in the public interest?

11:35 a.m.

Assistant Secretary, Regulatory Affairs, Treasury Board Secretariat

Michael DeJong

The concept of public interest is not defined anywhere in federal or provincial legislation. Court rulings have clarified that the term “public interest” is always contextualized in the legislation in question.

In the example you gave, the minister would have to be assured that there is an analysis of the costs and benefits, that risks are identified and mitigated, and consultations have been undertaken with the other policy makers and stakeholders, such as indigenous peoples.

There are also requirements for transparency. The intent behind the regulatory sandbox must be published in regulatory plans. When a sandbox is launched, it must be posted on the website. Lastly, the President of the Treasury Board must prepare an annual report listing all regulatory sandboxes.

That would also apply to the example of a nuclear reactor.

Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC

That means that in the case of a nuclear reactor project, the process may be under way, and a year later, we could say that it's a done deal, there's no turning back, and investments have been made, but then three years later, collateral damages are identified. Is this what I should understand?

11:40 a.m.

Assistant Secretary, Regulatory Affairs, Treasury Board Secretariat

Michael DeJong

Exemptions in all regulatory sandboxes have to be very narrow.

Also, there's nothing in the bill that can overrule the independence of the Canadian Nuclear Safety Commission. Nothing there would allow the minister to overrule the independence and the safety regulations already in place.

Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC

In closing, I would like to make a request. Obviously, you know how I'm going to vote. I don't have any answers, I don't have any criteria, and I don't have anything that gives me comfort. I'm thinking about the people in my riding who are really concerned, and so I'm asking you to give me something that would reassure Canadians. At this point, it feels as though we've already realized that we'll get a beautiful beach to play on, and that we'll end up with collateral damages yet again. It's not as if the government has been free of scandals since 2015. I have serious concerns with this.

Thank you very much.

11:40 a.m.

Conservative

The Chair Conservative Kelly McCauley

Thanks very much.

We'll go to Mr. Patzer, please.

11:40 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

Thank you very much, Mr. Chair.

Thank you, Minister, for joining us here today.

Right off the bat, picking up on a different question that was asked earlier, how many regulations have been either changed or removed because of the regulatory sandboxes that have existed in the transport and health departments for the past six years?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

For clarity, are you asking about an overall red tape review or particularly for the sandboxes used?

11:40 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

It's just for the sandboxes used. You said earlier that there was one used in one of the departments. You didn't specify the other department.

If this has been such a resounding success for the past six years that you have to bring it in for every other department, surely to goodness you can tell us how many regulations have been changed or repealed because of regulatory sandboxes.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

It was just one time that it was used, and in one department. It's in two departments—Transport Canada and Health Canada—but it was used by one department.

If you will allow me, I can ask Bill to give you clarity on how many were removed or not, for your benefit.

11:40 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

How many?

11:40 a.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

I cannot give you an answer as to how many, but we can talk about freight train inspection as one example where the rules were successfully tested and changed.

Mike, is there another one you want to add in the five seconds I've left you?

11:40 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

It's been used more than once, then.

11:40 a.m.

Assistant Secretary, Regulatory Affairs, Treasury Board Secretariat

Michael DeJong

Regulatory sandboxes provide a narrow exemption, as opposed to repealing an entire regulation. The evidence collected in a regulatory sandbox is then used to inform the regulator for subsequent amendments.

11:40 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

Were there any subsequent amendments, though?

11:40 a.m.

Assistant Secretary, Regulatory Affairs, Treasury Board Secretariat

Michael DeJong

Yes, absolutely. I can provide some examples.

With respect to, for example, the e-manifest that the secretary mentioned, Transport Canada ran a regulatory sandbox in 2020 to test the use of e-shipping documents—whether they could be used to safely replace paper documents. This allowed Transport Canada to then use that to evolve the transportation of dangerous goods regulations so they were in greater alignment with international standards.

11:40 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

Thank you very much.

Minister, with the early retirement incentive that is in place, where is the money going to come from for that incentive?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

That would be from the public service pension fund.

11:40 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

Is it the overages from it that will be used? The plan still has to be utilized and made whole. Where exactly within that fund is it going to come from?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

As I said, it's the public service pension fund; it will be coming from there.

11:40 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

Is it not from the overages?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

Can you clarify your question, please?

11:40 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

The pension fund has done well, and there's extra money there. Normally that would go back into general revenue. Is that money being used to make the taxpayer whole, or is that money going to be used to fund your early retirement buyout?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

In your question, there's a certain mix-up. What I can say is that money is coming from the public service pension fund to deal with early retirement. If you want a bit more clarity, I can ask my team to respond to that.

11:40 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

You don't know, though, Minister.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

I'm sorry. I know, but—

11:45 a.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

I can be really quick.

11:45 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

Be really quick.

11:45 a.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

The excessive surplus that was removed is still in the CRF. There is still a surplus in the pension plan itself.

As the minister said, the early retirement incentive, if approved by Parliament, would be funded from the pension plan, not from the money taken out.

11:45 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

Thank you very much.

Minister, you said earlier that 16,000 FTEs are going to be reduced. We have seen reports that it's actually as high as 40,000. Can you confirm whether that's full-time or part-time FTEs? What are the exact implications of the 40,000 people who will lose their job?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

What I said is that 16,000 full-time equivalent positions will be reduced over three years.

11:45 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

Will no part-time jobs be lost?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

What I said was 16,000 full-time equivalents. It's in my statement.

11:45 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

Is the other reported number of 40,000 from other departments wrong?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

I can say what I gave in my statement. You referred to my earlier statement, so I'm sticking with that. These are detailed answers and you will not like them, so I'm sticking with that.

If you want clarity, we can go on.

11:45 a.m.

Conservative

The Chair Conservative Kelly McCauley

We're out of time, but Mr. Matthews, you look like you want to respond really quickly.

11:45 a.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

I just want to add something for clarity. Because of the way the reductions will work, if there are 10 jobs that are identical but only seven of them will remain, all 10 people will get a letter saying their job may be impacted. You will see the number of letters issued actually exceeds the number of jobs that will be reduced.

11:45 a.m.

Conservative

The Chair Conservative Kelly McCauley

Thank you.

We have a bit of extra time, so we'll probably do a couple of last four-minute rounds.

We'll go to Ms. Rochefort and then to Ms. Block, and then we'll squeeze in Ms. Church.

Pauline Rochefort Liberal Nipissing—Timiskaming, ON

Thank you very much, Mr. Chair.

Minister Ali, I want to make a statement quickly, and also ask one question.

I've been surprised, since we've started to discuss more publicly regulatory sandboxes, by the amount of misinformation that has been circulating. I find that a section of the proposed legislation seems to always be picked out of context, and I want to point to it. It is the one that speaks to granting a minister the authority to make an order exempting an individual, association or organization for a period of not more than three years from the application of a provision of an act of Parliament under their responsibility or an instrument made under such an act.

I find that when these statements are made, they're taken out of context, and people then come to conclusions that are absolutely incorrect. There is a policy online that people can read. It's a policy on regulatory sandboxes that is really well composed. It provides scope, context, definitions and principles. It provides accountability, roles and responsibilities. I understand that there's never anything perfect, but I think a very first step, when we make public comments, is to read what's out there, what's been provided by bureaucrats who do exceptional work.

That's an important comment that I wanted to put on the record.

My question is completely different, and it is addressed to Deputy Minister Matthews. It follows Ms. Kusie's line of questioning with respect to the comprehensive expenditure review.

From that line of questioning, I'm getting a sense that there has never been, and there won't ever be, any savings from any comprehensive expenditure review the government does. Do you want to comment and maybe expand on that?

11:45 a.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

The conversation that was referred to earlier at committee involved what the savings will be. These reductions from the CER will be removed from departments' estimates, and this committee will get to see the main estimates with those reductions.

That being said, every expenditure exercise I have ever been involved in also happens at the same time the government is investing in other areas, and this is no different. You will see these reductions, but at the same time, you're seeing investments in other areas. The best example here would be National Defence. They've been asked to find 2% in savings, but at the same time, they're growing. That, in effect, is really a reallocation of their spending.

If you're expecting to see National Defence projections for spending next year to be lower than the current year, they absolutely will not be. The government has announced its investing in that area. You will see other departments undergoing the same thing, where they've reduced in one area, but they're spending in another.

If the committee wants to study this further, I would suggest that when you engage with departments, understand where the reductions have happened or where they plan to get the reductions, but at the same time, ask about other investments the government has made in a department that may offset the planned reductions, because this is about reallocation.

Pauline Rochefort Liberal Nipissing—Timiskaming, ON

Absolutely, it is about reallocation. That is the purpose of doing expenditure reviews: to find savings so you can engage and then direct your funding to what is necessary in a particular context.

Would that be correct?

11:50 a.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

That is correct.

Pauline Rochefort Liberal Nipissing—Timiskaming, ON

Budget 2025 also announces a reduction of up to 1,000 executives in the public service over the next two years.

Can one of you, Minister or Deputy Minister, comment on the importance of this initiative? What does it mean? What is the impact on the public service of losing this intellectual capacity?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

As we launch the comprehensive expenditure review and workforce adjustment, trying to bring our public service employees to sustainable levels, executives must also align with the workforce. This is for more fairness and transparency.

We'll be reducing 1,000 executives over the next two years. All organizations have been asked to reduce their executive workforce by 12%.

Pauline Rochefort Liberal Nipissing—Timiskaming, ON

Thank you, Mr. Minister.

That's it for me, Mr. Chair.

11:50 a.m.

Conservative

The Chair Conservative Kelly McCauley

Thank you very much.

We'll be able to do a couple of five-minute rounds. We'll have Ms. Block and then Ms. Church.

11:50 a.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Thank you very much, Chair.

I'm not sure that I'm going to take up five minutes; however, they do pass very quickly, as we are very aware, and we often try to keep answers short.

I want to go back to the intervention that my colleague Ms. Gaudreau made. I have to agree with her when it comes to the sandboxes, as you refer to them, that are included in part 2 of Bill C-15. These sandboxes, which I believe are proposed subsections 12(3) and 12(7) in the act, are at best ambiguous and only require the agreement of one other minister within cabinet, which I think would be fairly easy to find.

When you think about the fact that you are providing the ability for a minister to exempt a company or an individual at their discretion, what you are actually doing is providing a minister the ability to pick winners and losers.

My question for you is this: If the laws and regulations we have in place stand in the way of innovation, competitiveness and economic growth to the point where ministers have to provide exemptions, why are you not simply repealing them?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

As I said, there is a misconception about regulatory sandboxes. Regulatory sandboxes are to help regulations keep pace with innovation.

There are rigorous regulations around them. The minister has to justify why they're being used. I think every minister will have to do that. We're providing this tool, but they cannot just unilaterally use it without giving a justification. They have to justify it before using it. I think it's—

11:50 a.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Minister Ali, you haven't answered my question, which is fine.

I'm going to move on and follow up on the suggestion that your deputy minister made in terms of reviewing the CER. I'm wondering if we could book one or two meetings to look at this after the estimates.

11:55 a.m.

Conservative

The Chair Conservative Kelly McCauley

Let me address that. We have an invite out for the president to come back for the CER.

Mr. Matthews, I know you mentioned a couple of other departments. Besides the one-hour meeting with the president and the secretary of the board that we agreed to, can we just add a couple after? We have the estimates, and we're filled up with the budget stuff.

That's great. We'll follow up with everyone after. Thanks.

The clock has restarted.

11:55 a.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

How much time do I have left?

11:55 a.m.

Conservative

The Chair Conservative Kelly McCauley

You have about a minute and 30 seconds.

11:55 a.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Do any of my colleagues have a question they'd like to follow up with that they perhaps didn't get to ask?

11:55 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

Yes.

11:55 a.m.

Conservative

The Chair Conservative Kelly McCauley

Go ahead.

11:55 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

Minister, are you aware of any requests that were denied for a regulatory sandbox from either the Department of Health or the Department of Transport in the last six years?

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

I'm not aware. I can ask my team if they are aware.

11:55 a.m.

Assistant Secretary, Regulatory Affairs, Treasury Board Secretariat

Michael DeJong

I would point to a specific provision in the proposal that specifically means the minister is not compelled to even consider a regulatory sandbox.

11:55 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

The whole point is that the minister has said this is absolutely necessary to have in place for innovation and how important it will be going forward, yet you're telling me that for six years, there was only one request and that's it.

11:55 a.m.

Conservative

The Chair Conservative Kelly McCauley

Give a brief response, please.

11:55 a.m.

Assistant Secretary, Regulatory Affairs, Treasury Board Secretariat

Michael DeJong

There were a number of regulatory sandboxes that Transport Canada implemented, and they helped significantly with the evolution of regulatory frameworks. That included, for example, shifting from paper documents to electronic documents, which helps small businesses quite a bit. They also helped to introduce the safe introduction of artificial intelligence with respect to railway operations. There were a number of other important innovations as well.

11:55 a.m.

Conservative

Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK

If I may—

11:55 a.m.

Conservative

The Chair Conservative Kelly McCauley

Let me interrupt. I'm sorry. The time is up.

From what we heard earlier, there was just one use, but you're saying that there are several uses, and we're running out of time. Can you provide in writing to the committee all the times it has been used for Health and for Transport, if that's okay?

11:55 a.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

Mr. Chair, only Transport Canada has used it. We will come back with a list of how often. If we can, we'll find out if any have been rejected, but I'm not sure that we'll be able to find that out.

11:55 a.m.

Conservative

The Chair Conservative Kelly McCauley

Okay.

Ms. Church, welcome to OGGO. You have the floor for five minutes, please.

Leslie Church Liberal Toronto—St. Paul's, ON

Thank you very much, Mr. Chair, for having me here today.

Just because we've focused quite a bit on regulatory sandboxes and the confusion that surrounds them, maybe let me focus on a few direct questions.

First of all, perhaps just to clarify a comment that came up from my colleagues across the table, sandboxes are somehow beneficial for the big guys, not the little guys. Actually, my understanding is that, really, sandboxes are designed exactly for the opposite: to help innovators, to help small and medium-sized businesses, to support economic growth and to help us support innovation and productivity.

Deputy Matthews, could you speak a bit to how we ensure regulatory sandboxes are accessible to small and medium-sized businesses, which certainly wouldn't have the same resources as large organizations?

11:55 a.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

Certainly.

I think there is maybe a preconception that a sandbox is only available to one company. The idea here is that the minister would evaluate proposals, and a good sandbox would impact numerous organizations at the same time.

What we hear when we engage industry associations is that innovators don't have space to test out and float their new ideas. It's supposed to create that experimentation, which is open to all, if approved by the minister.

Mike has already mentioned one example that benefits small businesses.

Mike, you may want to talk about another one where an innovator came in with something.

11:55 a.m.

Assistant Secretary, Regulatory Affairs, Treasury Board Secretariat

Michael DeJong

Red tape disproportionately affects small businesses. Providing a clear pathway for small businesses or entrepreneurs to be able to engage with the regulator and suggest innovation or potential targeted exemptions in order to support their technological development or new ideas is part of the idea.

The example I gave was about e-manifests, which would have allowed small transportation companies the ability to apply to Transport Canada for an equivalency certificate and demonstrate that they could safely use e-shipping or digital versions rather than paper copy versions.

Noon

Liberal

Leslie Church Liberal Toronto—St. Paul's, ON

In the case of concerns around conflicts of interest where the minister or government has been lobbied on behalf of organizations seeking a regulatory sandbox, can you speak to the types of controls that are in place to prevent those conflicts of interest?

Noon

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

The minister responsible can only create a sandbox in the space where the legislation and regulations are within their purview. That's the initial box.

Conflict of interest rules and those regimes still apply. There's no way around them. If a minister felt that he or she had a conflict, they would still kick in, just as they would now for any proposal. The only area where a minister would be allowed to create a sandbox is where legislation or regulation is involved under their purview. It's not carte blanche across the system.

Mike may wish to add to that.

Noon

Assistant Secretary, Regulatory Affairs, Treasury Board Secretariat

Michael DeJong

I would simply confirm categorically that the conflict of interest rules would still apply in the case of sandboxes.

Noon

Liberal

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

That's why I say there's a lot of misconception around regulatory sandboxes.

All regulations—those on conflicts of interest and in codes of ethics, everything—apply to this. There's no exemption. No one is exempt from it.

To clarify for the benefit of this committee and the Canadians who are watching, regulatory sandboxes are only for certain innovative testing. No one is exempt from any safeguard rules and regulations around that. That's for clarity.

Noon

Liberal

Leslie Church Liberal Toronto—St. Paul's, ON

Thank you for that, Minister. I agree with you in the sense that I think there are many misconceptions about the constraints. We call it a sandbox precisely because it's boxed in.

This is for Mr. DeJong, or the deputy, perhaps. I'm wondering whether you could very clearly lay out for us what the constraints are around a regulatory sandbox—the fact that they are temporary and that they apply only to specific projects. Could you help us demystify this notion of a King Henry VIII clause?

Noon

Assistant Secretary, Regulatory Affairs, Treasury Board Secretariat

Michael DeJong

Yes. Absolutely.

Foremost, a minister may only authorize a sandbox if it falls specifically within their authority. The sandbox must be narrowly defined and have a specific exemption for the purposes of supporting innovation and technological development, with the intent to eventually amend a regulation. The purpose of the sandbox would be to gather the necessary evidence and data in order to properly inform that regulatory development.

Before a sandbox can be launched, the minister must be assured that it is in the public interest. In other words, there is a proper analysis of the costs and benefits, risks are identified and mitigated, and proper consultations have been undertaken with jurisdictions, stakeholders and indigenous peoples. There are also strict requirements for transparency at every step of the life cycle of a sandbox, including for forward regulatory plans, when a sandbox is launched and in an annual report tabled in the House by the President of the Treasury Board.

Noon

Conservative

The Chair Conservative Kelly McCauley

Thank you very much, gentlemen.

Before we suspend, perhaps I can ask a couple of quick questions.

You may have answered this earlier, but what is the projected cost of the early retirement buyout? Is it $1.9 billion?

Noon

Liberal

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

It's $1.5 billion over five years.

Noon

Conservative

The Chair Conservative Kelly McCauley

Mr. Matthews, can you clarify something, please? There is the unpermitted surplus above the 25%. I understand that's been cleared out and put back into general revenue. Is that correct?

Noon

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

The surplus, at a point in time last year, was dealt with. Obviously, the actuary will continue to do—

Noon

Conservative

The Chair Conservative Kelly McCauley

What is the surplus sitting at right now? Is it above what's unpermitted?

Noon

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

I haven't seen a recent actuarial report, but if the pension plan continues to do as well as it was doing in previous years, we will be close.

Noon

Conservative

The Chair Conservative Kelly McCauley

The issue I have, in looking at the act, is that under “pensions” in paragraph 7.3, it says to “retain the surplus” to ensure that the plan is at a “prudent margin”. I'm just curious about paying this out. Instead of paying it out of general revenues, it seems to be kind of hidden. You need to maintain the surplus at a prudent value, but you're clearing $1.5 billion or $1.9 billion out of it for the early buyouts.

On the flip side, within the act, if there's a deficit, the deficit has to be made up by taxpayers. It also states that when it is in surplus, the government stops contributions, which means taxpayers stop contributions.

It looks to me like you are whittling down the surplus, and taxpayers are having to basically make it up. Taxpayers are on the hook for any shortage or deficit of the pension, and therefore any surplus, I would think, would go back into general revenues. It looks like you are playing fast and loose with the act in several ways.

12:05 p.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

Do I have time for a response to that?

12:05 p.m.

Conservative

The Chair Conservative Kelly McCauley

No. We're done.

Voices

Oh, oh!

12:05 p.m.

Conservative

The Chair Conservative Kelly McCauley

Of course. Please go ahead, Mr. Matthews.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

Was it a question or a statement?

12:05 p.m.

Conservative

The Chair Conservative Kelly McCauley

I'm asking Mr. Matthews, because he's a bit more in tune with this.

Shafqat Ali Liberal Brampton—Chinguacousy Park, ON

I didn't know whether it was a question or a statement by you. I just wanted to get clarity.

12:05 p.m.

Conservative

The Chair Conservative Kelly McCauley

It's both. I'm trying to figure out how it's justified and how it fits in with 7.3, which says we should maintain or retain a surplus in the plan as a prudent margin, and how we justify paying the early buyout costs out of the pension when any deficit has to be made up by taxpayers. The flip side is that the surplus generally belongs to taxpayers. The government—and therefore taxpayers—when it's in surplus, doesn't make contributions to it, so it looks like this could reduce the surplus and eliminate the government from ending its contributions.

Do you see what I mean? I'm sure Mr. Matthew does.

12:05 p.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

I have two very quick points here, Mr. Chair.

Number one, when there was a non-permitted surplus above the 125%, it did indeed go back into the CRF, as we've discussed. Just remember, though, that this pension plan is made up of investment income, obviously, that the plan has earned, but also contributions from both the employer—or, as the chair said, taxpayers—and employees. That fund is jointly funded.

12:05 p.m.

Conservative

The Chair Conservative Kelly McCauley

If it's in deficit, the employees don't make it up; the taxpayers do.

Leslie Church Liberal Toronto—St. Paul's, ON

I have a point of order.

Mr. Chair, I appreciate the fact that I'm new to this committee, but my understanding is that if the chair wants to ask questions, he would take the time from a member of his caucus.

12:05 p.m.

Conservative

The Chair Conservative Kelly McCauley

We are done, actually. This is just the chair's prerogative to ask questions. Thanks.

Go ahead, Mr. Matthews.

Vince Gasparro Liberal Eglinton—Lawrence, ON

Are we adjourned?

12:05 p.m.

Conservative

The Chair Conservative Kelly McCauley

No. There are no more rounds for members. I'm just using the chair's prerogative to ask a couple of questions at the end before we suspend. We do this quite commonly in all committees.

Just finish up, Mr. Matthews.

12:05 p.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Bill Matthews

There was a point in time when the plan was in deficit and it indeed got funded by the government. Then, equally, when the plan was recently in a surplus position above the authorized amount, that went back into the CRF. You have seen it move both ways, but the key point here is that the pension plan itself is jointly funded by employer and employee.

12:05 p.m.

Conservative

The Chair Conservative Kelly McCauley

As in a lot of things, I think we'll agree to disagree.

Anyway, we're going to suspend briefly. We'll say goodbye to our guests, and then we'll bring back a couple of folks who will go over our submissions process for the Bill C-15 recommendations and possible amendments.

We'll suspend briefly.

12:10 p.m.

Conservative

The Chair Conservative Kelly McCauley

Good afternoon, everyone. We are back.

Quickly, I want to go through our timelines for our recommendations for Bill C-15.

On February 18, which is during the break week, the analysts are going to distribute a summary of the evidence and recommendations based on our first three meetings. It won't include Canada Post, but it will include everything up to today on Bill C-15.

We're asking members to submit their proposed recommendations to the clerk by noon on the 20th. Again, that's for what we've heard up to today, not including Canada Post. On the 23rd, the analysts will return the recommendations.

On the 24th, we'll have Canada Post here. I think a lot was covered by Minister Lightbound, but Canada Post will be here anyway. Then we're asking to have, at 2 p.m. on the 25th, the second tranche of proposed recommendations that we're going to send back to the finance committee regarding Canada Post.

On the 18th, we'll have a summary from the analysts. They've put together some recommendations from what we've heard. You can provide them to the clerk on the 20th by noon. On the 23rd, the analysts will send that out.

On the 24th, we'll have Canada Post. It's just the one meeting for one hour. Then you can have your recommendations in by 2 p.m. on the 25th. On the 26th, the analysts will provide a summary of evidence from Canada Post. Then we have to collate everything, and on the 27th we're going to send our letter to FINA.

As I mentioned, if we can agree on a recommendation, we'll send that. If we can't agree, we'll have a recommendation where the Conservatives recommend this, the Bloc recommends this and the Liberals recommend this, or the Bloc recommends this and the Conservatives and the Liberals recommend that.

The complicated thing is that if you want to do an amendment, it can't be done out of our committee, because we cannot force our will on other committees, although we should be able to because we are OGGO.

We have two special guests with us. Ms. Winters and Ms. Legault will now explain the process, if you wish to attend the finance committee and present an amendment to Bill C-15, whether that's on section 5, Canada Post or anything else.

I will turn the floor over. It will be brief.

If you have questions, just throw out questions. Direct them to Ms. Legault and Ms. Winters.

Michelle Legault Legislative Clerk

Thank you, Mr. McCauley.

As is the case with any legislation, any member is able to submit an amendment directly to the finance committee. If you would like to do that, I believe Marc-Olivier has circulated Isabelle D'Souza's information. She's the legislative counsel who's assigned to Bill C-15. You can reach out to her directly with your drafting instructions. There is a template available on Source under “Quick Help” in the “Drafting Amendments” section. Otherwise, we can have that sent to you through Marc-Olivier. The template will help you structure your drafting instructions to send to Isabelle.

Once Isabelle has your amendments, she will send them back to you. Then it is your responsibility to send them directly to the finance committee for them to be considered officially submitted. Send them to fina@parl.gc.ca.

Once they're submitted to the finance committee—again, any member can submit—you need to be either a member of the finance committee or substituted on the committee in order to move them. Then it will be up to you, within your caucuses, to organize whether you will be present yourself and substituted to move them during the committee or whether you'll arrange for one of your colleagues on the committee to move them for you.

Are there any questions?

12:15 p.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

If we work with Isabelle and want to put forward an amendment and it is in our name, we don't have to be at the finance committee in order for it to be moved. Another member of the finance committee, a permanent member perhaps, can go ahead and do that.

12:15 p.m.

Legislative Clerk

Michelle Legault

That's right.

12:15 p.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Thank you.

12:15 p.m.

Conservative

The Chair Conservative Kelly McCauley

Who's best if we have a question? If we finish up and say, “I should have asked that”, should we direct it to the clerk, who will forward it to you, or follow up with Isabelle? Who should do it?

12:15 p.m.

Legislative Clerk

Michelle Legault

To keep things simple, we can go through Marc-Olivier.

Generally speaking, any questions regarding the amendments themselves, drafting instructions or legal questions will go to Isabelle. Anything procedural will come to us.

That's another thing. Thank you for mentioning it. If you would ever like procedural advice ahead of time on whether we will suggest that your amendments be considered admissible or inadmissible, you are welcome to send them to us through Marc-Olivier, and we can give you that information in advance.

12:15 p.m.

Conservative

The Chair Conservative Kelly McCauley

Let me ask this quickly: Do we have a timeline for this to happen?

12:15 p.m.

Legislative Clerk

Michelle Legault

It can happen any time. We are available any time.

12:15 p.m.

Conservative

The Chair Conservative Kelly McCauley

No, I mean to get it in before the finance....

12:15 p.m.

Legislative Clerk

Michelle Legault

Oh, the deadline is February 27.

12:15 p.m.

Conservative

The Chair Conservative Kelly McCauley

Okay.

12:15 p.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

I have one final question.

As to the purpose of the committee coming together to discuss recommendations, I understand the difference between a recommendation from this committee and an amendment that's going to be brought forward. Are recommendations meant to highlight the will of the committee or the will of a party that has membership in this committee, if the finance committee is to consider amendments?

Pauline Rochefort Liberal Nipissing—Timiskaming, ON

Mr. Chair, we already had this discussion at our last meeting, did we not?

12:15 p.m.

Conservative

The Chair Conservative Kelly McCauley

Ryan.

Ryan van den Berg Committee Researcher

That's my understanding as well. Any recommendations put forward by this committee will supplement any discussions had at FINA and will help you, as members, determine what you want to move as legislative amendments. However, they are considered separate.

12:15 p.m.

Legislative Clerk

Michelle Legault

If I can pipe in, I thought of something else that is pertinent.

As usual, for any amendments submitted to FINA, if the amendments are trying to modify the same line, we always go with the first-come, first-served rule. I'm always encouraging members to submit amendments as soon as possible. If you're sitting on them and you send them in at the last minute, someone may have swooped in and claimed your line before you can.

12:15 p.m.

Conservative

The Chair Conservative Kelly McCauley

Or your similar line....

12:15 p.m.

Legislative Clerk

Michelle Legault

That's right.

12:15 p.m.

Conservative

The Chair Conservative Kelly McCauley

Fantastic. Thank you. I really appreciate you being here. I know you have a lot of other stuff to do.

12:15 p.m.

Legislative Clerk

Michelle Legault

I'm happy to be here.

12:15 p.m.

Conservative

The Chair Conservative Kelly McCauley

This is a rather interesting process that we haven't seen here before. Thank you very much.

We are adjourned.