Government Operations Committee on Sept. 23rd, 2025

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Mr. Gasparro, please go ahead for five minutes.

[Vince Gasparro, Liberal, Eglinton—Lawrence, ON]

Thank you, Mr. Chair.

I'm glad you just mentioned that housing and infrastructure more broadly do take time to build and to develop. On that point, you noted in the report, on page 15, that the federal lands initiative is on track to meet its goals. Are there any positive lessons the government should be taking as they go about setting up the Build Canada Homes program?

[Karen Hogan]

I think it would be in setting up the right measurement. You succeed because you stay focused on what you're going to measure, and measuring commitments is not the outcome needed. They're well on track for the commitments. Wouldn't it have been so much more exciting to say, “well on track for having occupancy” by those years?

I would say that the lesson is this: They did a great job at setting a metric, one that focuses on outcomes as well as the midpoint should be there. A commitment is a great midpoint, but then the outcome is one I would hope they would focus on.

Here, Public Services and Procurement Canada is trying to pilot accelerated ways of disposing of buildings, and I think it's a good lesson learned to see how that pilot is going. There were 10 buildings that were put into that to shorten the period of time. Usually it takes about eight years to free up a building and move it into the lands initiative, and they're trying to do it in three. Building on some of their lessons learned throughout the pandemic—doing things not sequentially but together—could speed up the process.

It was too early for us to tell whether or not that will materialize, so I'd like to see them focus in on that, on better ways to free up buildings and get them into the federal lands initiative.

[Vince Gasparro, Liberal, Eglinton—Lawrence, ON]

For sure, I think occupancy and infrastructure projects going into certificate of occupancy are incredibly important, but you have to be going through the process at a timely clip in order to get to that final occupancy and that ultimate result that we all want.

In addition, do you have any overall thoughts on how the government should be going about streamlining the federal lands initiative, which you touched on a little, and public lands programs under the Build Canada Homes program?

[Karen Hogan]

The overall thought I would give is that when you make a commitment, it sets out expectations, and then with expectation comes the need to be transparent in progress and in how you plan on getting there. As the government moves through more home initiatives, I would encourage being clear and transparent about where projects are.

[Vince Gasparro, Liberal, Eglinton—Lawrence, ON]

That's great.

[The Chair, Conservative, Kelly McCauley]

We will now go to Mr. Patzer for five minutes.

[Jeremy Patzer, Conservative, Swift Current—Grasslands—Kindersley, SK]

The cost overruns on the F-35s right now are at $27.7 billion in total, so it's definitely over budget with a 50% increase. The $7-billion defence of Canada fighter infrastructure project is above and beyond that $27.7 billion. Is that correct?

[Karen Hogan]

Yes, that's correct, and I think it's important to note that the $27.7-billion estimate is National Defence's estimate. We believe another $5.5 billion should be added to that for some essential weapons and for facility upgrades.

[Jeremy Patzer, Conservative, Swift Current—Grasslands—Kindersley, SK]

If DND's estimate, which by extension means your audit, was based on incomplete information, how much more do you think the cost overrun actually is?

[Karen Hogan]

Well, it is at least $5.5 billion more than the $27.7 billion.

We did try to sit back and ask, “What does make a CF-35 fully operational and capable?”, and that's why we picked up certain other elements. Other things that we couldn't cost yet, because the government hadn't costed those, would have been the interim facilities that are needed because of the three-year delay in the two main bases. They do need to have interim facilities, and that hadn't been costed out yet, so that would need to be added as well.

That's why we recommended a much more active and, at minimum, annual process in monitoring costs and updating estimates so that DND knows what it needs to commit going forward.

[Jeremy Patzer, Conservative, Swift Current—Grasslands—Kindersley, SK]

Did you get a sense of the actual final number of full-time employees that would be required? I know the report says 246, but you said that this number was based on a certain level of completeness of the program. I'm assuming that's Cold Lake and Bagotville. It wasn't based on the full completeness of the program. There are also the other eight bases that are listed in your report, particularly Inuvik and Iqaluit.

When this program is fully rolled out and fully implemented, how many full-time employees are we going to need above and beyond that 246? Do you know?

[Karen Hogan]

As we mentioned in the report, the 246 are about planning, logistics and security. There's so much more that goes into running a base. You would have to add in pilots, technicians and maintenance crew.

I don't have that number, and neither does National Defence right now. They haven't finished all of their plans, which is why we could only talk to you about the level of detail that we have here.

We do know that they're planning for pilot training. Their current plans don't envision having enough pilots, so they need to do something different to ensure that they are ready when those aircraft arrive in Canada.

[Jeremy Patzer, Conservative, Swift Current—Grasslands—Kindersley, SK]

The first group of pilots are being trained in the United States. Is that correct?

[Karen Hogan]

That's correct.

The first few aircraft are going to the United States. They're expected to be there in 2026 to train Canada's pilots. Then the first plane is expected to arrive in Canada in 2028.

[Jeremy Patzer, Conservative, Swift Current—Grasslands—Kindersley, SK]

When the U.S. Government Accountability Office stated that the F-35 block 4 upgrade is delayed five years and is at least $6 billion over budget, was that factored into your report, or is that above and beyond as well?

[Karen Hogan]

I believe that the Government Accountability Office issued that notice very recently. My report dates back to the end of 2024 and we released it in June of this year, so no, it would not have factored in information that was not yet available.

[Jeremy Patzer, Conservative, Swift Current—Grasslands—Kindersley, SK]

Okay.

Even based on incomplete information, is there anything else you flagged as potential cost overruns?

[Karen Hogan]

Our report outlined that we had identified the need for temporary facilities and the need for more training. Those are the minimum right now. Again, many of the plans were not complete, so it's difficult to determine if they will come with additional costs. That's why we issued our recommendations.

This is still very much in the early stages. I would expect that there will be a little more clarity provided over the coming years. More regular monitoring of costs in a proactive way is absolutely needed.

[The Chair, Conservative, Kelly McCauley]

Thanks.

Ms. Rochefort, go ahead, please.

[Pauline Rochefort, Liberal, Nipissing—Timiskaming, ON]

I will finish my line of questioning with respect to reduction of office space.

You indicated that of the 37 tenants in the first tranche, 15 had not yet signed agreements. I just want to verify who is responsible for signing agreements.

Is there any political involvement in those agreements?

[Karen Hogan]

It's my understanding that an office reduction agreement is between the deputy minister of a department and Public Services and Procurement Canada. I can tell you that's the agreement I've signed for my office, so I would imagine that everyone would have to follow a similar process.

[Pauline Rochefort, Liberal, Nipissing—Timiskaming, ON]

I have a second question with respect to occupational density targets.

Are there any targets involved in these agreements? If so, from an OECD perspective and from a best practice perspective, are there occupational density targets that are typically set in such agreements?

[Karen Hogan]

I think this is where every department has to make its own decision about how much occupancy and space it needs. That's why the need to have accurate information about how existing space is being used is so essential to being able to move forward.

Given that we expect auditors to occasionally be out on site auditing entities, I would imagine that my office would have less of a need than a department that would have everyone in every single day because they're policy-driven, and so on.

I think it will really depend, department by department. The public service does so many different activities that I don't think it would be one size fits all.

[Pauline Rochefort, Liberal, Nipissing—Timiskaming, ON]

Thank you