Government Operations Committee on March 26th, 2026

[The Chair, Conservative, Kelly McCauley]

Good morning, everyone.

Welcome back to meeting number 33 of the House of Commons Standing Committee on Government Operations, widely known, of course, as the mighty OGGO.

We welcome back our friends from the Treasury Board.

Before you start with your opening statement, President Ali, colleagues, this is just a reminder to please keep the headphones away from the microphones. There's also a new request from our interpreters. If you're shuffling papers, make sure your papers are not hitting the microphones because that's causing an issue as well.

President Ali, you have five minutes. The floor is yours. Please go ahead, sir.

[Shafqat Ali, Liberal, President of the Treasury Board]

Thank you, Mr. Chair.

I'm pleased to be here with my officials to discuss the 2025-26 supplementary estimates (C). In total, these estimates present $5.4 billion in proposed voted spending. This is offset by a decrease of $1.4 billion in statutory spending, for a total of $4 billion in planned expenditures. With the items requested in these estimates, the government continues to invest in the national priorities that will keep our country strong and prosperous.

The government is taking action to secure Canada's sovereignty by rebuilding, rearming and reinvesting in the Canadian Armed Forces. To this end, these estimates propose $2.2 billion to further spend on our military. Funding for the Department of National Defence will be used for equipment such as multi-mission aircraft, armoured vehicles, drones and the strategic tanker transport capability aircraft project. Proposed funding will also support operations, recruitment and retention.

These estimates also seek funding for indigenous priorities. True reconciliation means more than symbolic gestures. It requires concrete actions and investment in education, health care, governance and economic opportunities. These estimates seek $348.4 million for first nation child and family services so that children can be cared for in their communities, and $155.6 million to support access to health care services that are not available locally.

I will highlight one additional priority supported by these supplementary estimates. Our veterans served to protect the very rights and freedoms we enjoy today. We owe them a debt of gratitude for their service and sacrifice. These estimates request $300.4 million for various programs and services to support veterans and their families.

Let me now turn to my department.

The supplementary estimates propose the establishment of vote 50, a new Treasury Board central vote. This vote would support urgent and unforeseen defence requirements that cannot wait for the next supply period. Access to the vote would be granted by the Treasury Board.

Let me take a moment to highlight the fact that Canada has met NATO's defence spending target of 2%. This is the first time since the late 1980s that the country has met its targets. To provide transparency, any allocation from this fund would be presented in the next supplementary estimates.

TBS is also seeking parliamentary approval to increase its vote 30, pay-list requirements, by $140 million. This increase would provide funding to support mandatory payouts, such as access to vacation leave, parental and maternity allowances and other adjustments that have not been provided by vote 15, compensation adjustments.

TBS is also seeking parliamentary approval to increase its vote 15, compensation adjustments, by $31.2 million. This increase would cover pay increases and lump sum payments from recently signed collective agreements and updated terms of employment for the ship repair, west, and air traffic control groups.

These estimates demonstrate that the government continues to invest responsibly and transparently to deliver on the issues that matter most to Canadians.

On transparency, I want to be very clear. The government is committed to giving Parliament and Canadians a clearer picture of how public funds are being spent. Two weeks ago, our government tabled the departmental plans in order to provide Parliament with a more complete picture of spending. The departmental plans set out how departments will deliver on these priorities. They provide detailed information on planned spending, expected reserves and performance indicators, ensuring Parliament and Canadians can track how funds are being used and what outcomes they are delivering.

My officials and I would now be pleased to take your questions on any of these items.

Thank you very much.

[The Chair, Conservative, Kelly McCauley]

Thanks.

We'll start with Mr. Patzer, please, for six minutes.

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

Thank you, Minister, for coming here today. I really appreciate it.

I wonder if you can tell us straight off the top if you know what the deficit is going to be going forward.

[Shafqat Ali, Liberal, Brampton—Chinguacousy Park, ON]

We are here to discuss supplementary estimates (C), which have a projected $5.4 billion in total expenditures, but we actually decreased that spending by $1.4 billion.

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

You don't know what the projection for the deficit is going to be for the rest of the year.

[Shafqat Ali, Liberal, Brampton—Chinguacousy Park, ON]

I'm saying we're here to discuss supplementary estimates (C)—

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

It's an update.

[Shafqat Ali, Liberal, Brampton—Chinguacousy Park, ON]

Today's committee meeting is to discuss supplementary estimates (C), which have—

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

Okay. It's an update. I was hoping you would know the answer.

[Shafqat Ali, Liberal, Brampton—Chinguacousy Park, ON]

—projected spending of $5.4 billion. We have actually spent $4 billion, which is a decrease of $1.4 billion.

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

Okay.

Do you know what the increase is that we're seeing over this time last year as a result of these supplementaries?

[Shafqat Ali, Liberal, Brampton—Chinguacousy Park, ON]

In the main estimates, that spending is up $15.9 billion compared to last year.

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

I have $24 billion in the numbers from the PBO. Actually, on a Government of Canada website, as well, it's $24 billion, which is basically a 5% increase.

At the same time, you guys are undergoing the comprehensive expenditure review, which is supposed to find $15 billion in savings. How's that going?

[Shafqat Ali, Liberal, Brampton—Chinguacousy Park, ON]

The comprehensive expenditure review was launched to balance our operational costs in the next three years to find savings to invest in the areas that matter most to Canadians, such as defence, infrastructure and housing. We're finding savings of $60 billion in five years, and it's going well. We're bringing our public service to a sustainable level.

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

You say it's “going well”. That's interesting.

Do you know what the national debt is right now, Minister?

[Shafqat Ali, Liberal, Brampton—Chinguacousy Park, ON]

Again, I'm here to discuss supplementary estimates (C). This meeting is dedicated to discussing supplementary estimates (C). We'll come back on the main estimates. We should use our time to discuss what we are here to discuss.

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

You're the Treasury Board president. I would hope you know what the national debt is. You don't even know what the deficit for this year is. It is just appalling that you would come to this committee and not even know some of those very basic numbers, which you should know as the head of the Treasury Board.

I will inform you, Minister, that the national debt is $1.29 trillion. By the end of your hour here at committee, another $4.5 million will have been added to the debt. By the end of today, it will be about $110 million—without your spending any money. The interest alone is going to be that high.

When we continue to add more and more spending through the supplementary estimates, those numbers only go higher and higher. They don't get any lower, which means that the current and next generations of Canadians are going to be the ones bearing the brunt of this.

I'm just wondering at what point in time you are going to return to a fiscal anchor that is actually going to help sustain the economy. It used to be that you were not going to go over a $40-billion deficit. This year, a $78-billion deficit was the projection. That's why I asked you if you knew what the latest update on the deficit was, and you don't know it.

I'll ask you one more time. I've given you some time to find that number. What is the deficit going to be with this update?

[Shafqat Ali, Liberal, Brampton—Chinguacousy Park, ON]

Thank you for the question.

What I can tell you is that in the main estimates, we have $502 billion in budgetary spending, and it's up $15.9 billion compared to last year. This includes $230.4 billion in voted spending and $272.4 billion in statutory spending. Nearly 60% of this spending is directed toward transfers to the provinces and other priorities. It also contains $14.7 billion in new spending announced in budget 2025, including funding for defence but also for infrastructure and economic support.

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

Did you apply a rural lens to any of that spending, Minister?

[Shafqat Ali, Liberal, Brampton—Chinguacousy Park, ON]

These main estimates, if you're going to go into the technicality of regions, come from departments. Every department is responsible for their submissions.

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

That's interesting. Do you have a breakdown of the layoffs of public servants by region, Minister? Do you have that information?

[Shafqat Ali, Liberal, Brampton—Chinguacousy Park, ON]

We're dealing with workforce adjustment and early retirement. We have many tools to deal with this workforce reduction. We're returning the public service to a more sustainable level of 330,000. About 9,800 jobs were reduced in 2024-25. With the regional reduction this year—

[The Chair, Conservative, Kelly McCauley]

Thank you, Minister. I'm sorry. We're past our time, I'm afraid. You might be able to finish that with Mr. Gasparro's intervention.

Go ahead, please, Mr. Gasparro.

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

Thank you, Chair.

Minister, thank you for being here.

It's been widely reported this morning that for the first time since 1990, Canada hit our 2% NATO defence spending target, fulfilling our new government's promise to rearm our Canadian Armed Forces. On that note, can you please talk to me about vote 50 in the supplementary estimates and what it will do more broadly for the Canadian Armed Forces?