Government Operations Committee on March 12th, 2026

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

I'm glad you mentioned core services. I'll touch on active consultants, but I'm going to pivot between the two. I'm glad you mentioned that.

When Treasury Board officials appeared before committee, they were very clear—and I know this because I asked the question—that departments were directed to find savings through the comprehensive expenditure review in ways that do not affect frontline services or core services. When we were talking about the comprehensive expenditure review—not other programs that may have sunsets—officials also confirmed that no cuts are being made to frontline personnel at the CBSA or RCMP and that we're actually looking to hire more people.

Can you explain what the issue is with our government responsibly identifying savings while ensuring the frontline core services that Canadians rely on remain protected? This is coming from Treasury Board.

[Sean O'Reilly]

I absolutely understand that. One of the big issues we have.... If we look back to August of last year, when the comprehensive expenditure review was first announced, we asked the government to have a discussion with us. We want to have a discussion with the Treasury Board and the departments to talk about where there are efficiencies and where there potentially are savings. To this day, we have not been able to have those discussions. I would love to have the discussion. Are there places we could look at? Are there potential savings for the government that don't affect core service to Canadians? Right now, I'm seeing my members talk about it.

When I look at Statistics Canada—the backbone of data in this country that businesses rely on, that the government relies on and that community organizations rely on—I see large swaths of my membership and the membership of the other unions being affected. It's uncertain at this point what's actually going to be cut.

This is the concern we have. We have yet to see the actual details. All we've seen is the “affected” notices. We haven't actually seen the details on what services will be cut for Canadians, and that should be shocking for taxpayers.

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

I'd also like to go back to your point around the use of consultants. There was some commentary about the correlation between the size of the public service and the use of consultants, that reducing the size of the public service would automatically lead to a greater reliance on management consultants. However, from the statistics we have, the reality is that spending on management consultants and IT services, the categories that are most often criticized, actually decreased by about 10% last year, even while approximately 10,000 public service positions were reduced.

Can you explain that correlation? The broader category of consultant spending often includes things like construction firms that help build and maintain federal infrastructure or contracting nurses to provide health care services in northern communities.

[Sean O'Reilly]

I'm glad to hear that there was a reduction in management consultants and IT consultants. I was not aware of that 10% reduction. I'm glad to hear that. I'm an IT professional by trade. I've seen this year after year, sitting side by side with IT consultants.

You speak about nurses in the north. Those are our members who want to do that work. The fact that we're constantly going to contract nurses, who cost more for the government, is problematic. These jobs are public servant jobs. They can be done by public servants. The government should be building that expertise in-house. It's broad-based. Contracting out, when I look back at the beginning of my career 25 years ago, has always been an issue for IT, but now I've seen it for nurses, engineers, you name it. Even our purchasers are dealing with outside contractors, because there aren't enough resources inside the government and that expertise is not there.

The government should be investing in building expertise inside instead of paying someone who's going to leave three or four months down the road.

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

Thank you.

[The Chair, Conservative, Kelly McCauley]

That is your time.

Mr. Harlow, I'm sorry. I saw that you wanted to chime in, but we're out of time, sir. Perhaps in one of the next interventions coming up you can offer that up.

We'll go to Madame Gaudreau for six minutes, please.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Thank you very much, Mr. Chair.

Ms. DeSousa, my main question is for you.

What a context we find ourselves in. We're talking about reforms, making cuts and reinjecting funds, but what about jobs?

I'll come back to you—

[The Chair, Conservative, Kelly McCauley]

Madame, I apologize for interrupting. We've unfortunately lost Ms. DeSousa. We're trying to get her back in.

We'll restart your time if you want to redirect your questions. We'll let you know when she comes back in.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

That's great. Thank you very much, Mr. Chair.

As a member of the Standing Committee on Veterans Affairs, I simply want to reiterate that what's happening right now is terrible. We know the consequences will be felt as early as April. We're telling the government the time to act is now. There's not much time left, and we know what's coming. We know full well the 15% targeted cuts to the funds aimed at helping veterans transition from military to civilian life will be used to boost investments in defence and the Canadian Armed Forces. People need to know that. The minister knows that, and we've told her. I think it's time for the Prime Minister to act. Otherwise, we'll see the impact on our future defence force.

That's my heartfelt plea. I've had several meetings with my colleague about this, and this situation is unacceptable.

My question is for you, Ms. DeSousa. The government keeps cutting services to Canadians. I experienced the consequences of that during the pandemic. I'm sure my colleagues will agree that MP offices became Service Canada counters. People would come to our offices to talk about Veterans Affairs Canada, the Canada Revenue Agency, Phoenix and employment insurance benefits. It just went on and on. You know what? That hasn't changed.

Give me a good reason to think it'll stop, because the current situation is unacceptable. We have to take back control and provide services, despite the cuts.

I'd like to hear your thoughts on that.

[Sean O'Reilly]

Thank you for the question.

As public servants, we serve—we want to serve—the people of Canada. You speak about those cuts, and we are a service provider. I look at the pride folks have.

I'm going to mention researchers for a second, if you don't mind. We have researchers who have received layoff notices, and some of them are taking a voluntary departure, but they want to make sure that their research is completed. These people care about serving Canadians. They care about that. Even though they're being shoved out the door, they want to protect that science.

For me, we swear an oath to the government and to the people of Canada, and to be treated this way has been difficult. Services will suffer.

[Gregory Harlow]

To supplement that, obviously, at the BPA, that service will be gutted, and most people will not receive service in a timely fashion. I think you said earlier in the week that standing in line is not a service, and that's right. You're going to stand in line for three to five years before you get something.

Going back to Mr. Gasparro's question for a moment, yes, of course it makes sense for the government to be efficient, but it doesn't make sense for the government to pour money into the armed services but then not have the bureau available to assist veterans when there's inevitably going to be an increase in people who need that service. It doesn't make sense to pour money into the Canada Border Services Agency and the RCMP if you're going to cut the prosecution service that has to process the files those frontline agencies are going to generate. That's just going to result in a diminishment of existing capacity and poor outcomes.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

I don't have a lot of time left. I'll give you an example. Three years ago, Bloc Québécois members dared to make changes to their organization. Using our own very limited MP budget, we hired a resource whose job is to contact people every day on all immigration files, because no one can get answers. Meanwhile, we're still looking for the minister. You can imagine what's going to happen. I'm glad to hear that today.

I'd like to ask 10 million questions, but I'll ask one about contracts. WE Charity was the first case where contract issues were revealed, others followed. Now, it's Cúram. It just keeps happening. There's also Phoenix. New issues arise every day.

Through attrition, expertise is dwindling, but we're telling people they might be able to come back and work for the government as consultants. Anything is possible. I'm not giving anyone any ideas, but we have to retain the knowledge and our professionals.

Are you concerned the objective of reducing the number of contracts will remain wishful thinking?

[Sean O'Reilly]

You gave Phoenix as an example. The goal was to reduce system-related costs by $400 million, it's costing us $5 billion. The government hired an external contractor, and it's costing us more.

I can name other contracts and projects that are costing us more. ArriveCAN is another good example of a project given to the private sector.

Why isn't the federal government retaining the knowledge? Our information technicians can do the work. Why, then, are we feeding this addiction, which costs us more?

I think the government should invest more in public servant expertise rather than paying others to do the job.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Mr. Chair, we can do the work, we just don't want to.

[The Chair, Conservative, Kelly McCauley]

Thanks.

We'll go to Mrs. Block and then to Mr. Osborne.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you, Chair.

Thank you to all of you for joining us today.

My questions are going to be directed to Mr. O'Reilly and Ms. Poirier.

We've talked about the fact, which you noted in the report you released on the 10 years of the Phoenix pay system, that the Liberals continue to spend on outside consultants and are planning to spend $26 billion on outside consultants. You've outlined very well some of the risks that come with constantly outsourcing work from in-house professionals. Would that include the risk of compromising on service standards that exist within the public service? Would you like to expand on that?

[Sean O'Reilly]

I think it could have a great risk for service standards. When we contract out, we sign a contract with a fixed term, usually with an outside consultant, depending on what service is being provided. My concern is that those service standards could be affected if there's a transition in that contract and we're not building that expertise inside.

You mentioned Phoenix, and I'm going to go back to Phoenix. We still have a backlog of almost 230,000 cases in the Phoenix pay system. That's not the fault of the public servants who do that work. It's the fact that the system was put in place before it was ready and we laid off hundreds—thousands—of compensation advisers. We've now been hiring them back and we're getting people up to speed, but we continue with that backlog. The pay centres are still underfunded and we have not been dedicating resources to do that, yet we paid millions—billions—of dollars to prop up the Phoenix pay system. Thank God there's a replacement coming, but at the same time, we continue to pay for a system that has never worked.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you so much for that.

Public Services and Procurement Canada has failed to meet, in four of the last five years, their department's targets to process pay-related cases within the service standards we've just been talking about, yet departments have said that the government's expenditure review, which we're talking about today, will not have any service-level impacts.

Do you agree with the assessment that there will be no service-level impacts with the government's proposed layoffs?

[Sean O'Reilly]

I do not.

I have a hard time believing that we're going to add 40,000 termination cases to the backlog. There's no way that doesn't affect it. I've seen no indication that they're increasing compensation advisers at the pay centre. There's no way that all of these layoffs are going to be reducing that backlog. It's going to be worse. What we're going to have is people who are being forced out the door and who are going to be wondering if their pension is starting and if they are going to get that last paycheque. We've seen people wait years for that last paycheque.

There are a lot of folks in this country who live paycheque to paycheque, and I have a hard time believing that there's going to be zero effect on the folks who are leaving the public service and the ones who are still there and waiting to get their pay cases resolved.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

What about the service levels within the public service? If we are moving ahead with laying off the number of public servants that has been proposed, they say that the service levels Canadians are receiving will not be impacted. Do you agree with that assessment?

[Sean O'Reilly]

I do not.

I see it first-hand. My father has been dealing with Service Canada through OAS. He's very frustrated. He had to wait an hour on the phone. When he eventually got to the public servant, it was great service, but to wait on the line for that length of time is inappropriate. It was frustrating for him. He's of an age and going through cancer treatments and to wait on the line is just inappropriate.

I have a fear, and we haven't talked about it, but AI chatbots.... I do not want Canadians dealing with a computer. They want to deal with human beings when they're getting services from the federal government. To be waiting on the line, to hear a computer talk to them and then maybe they'll get to a public servant, that's frustrating.

Public servants love providing the services they do, but these wait times are only going to increase. I hear of these dependencies that are going to be done with AI and that AI is going to solve everything. AI is not a silver bullet. It's a tool that we definitely should be using, but I've yet to see any work that's being done. I've seen AI chatbots actually cause harm. There have been court cases where corporations have been found liable because the chatbot gave bad advice. I'm fearful that it's going to happen to the Government of Canada.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

[The Chair, Conservative, Kelly McCauley]

Mr. Osborne.

[Tom Osborne, Liberal, Cape Spear, NL]

Thank you.

I may get only one question in, because I feel compelled to address some of the comments that were made today. I know that the opposition complains frequently in the House about the size of the deficit, but when government tries to deal with the size of the deficit through the comprehensive expenditure review, opposition members from all parties complain about that, so I'm not sure how we reach those goals, but I—

[An hon. member]

[Inaudible—Editor]