Government Operations Committee on March 26th, 2026

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

Our team at TBS has been working on this initiative. It's a dedicated team. We're making sure that if we update, streamline or remove duplications, those regulations are beneficial to Canadians and businesses and are not adding more burden onto businesses. Our focus is that it should not impact any service delivery or create any hurdles.

I'm going to ask Antoine to shed some light on that, if he can add a few things, or maybe Bill can add to that for further clarity.

[The Chair, Conservative, Kelly McCauley]

You have about 20 seconds.

[Bill Matthews]

Any potential risk to health and safety is part of the assessment. You do not pass go if that test is not met.

The last point is the cost-benefit analysis: What is the cost to industry to implement something versus the benefits to the broader Canadian economy or Canadians? That test is also key. Both are musts to get through the door.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

President and Mr. Matthews, on the red tape, I highly recommend that you look at what the State of Idaho has done. It's been spectacular for its red tape reduction.

Madame Gaudreau, you have two minutes.

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

Thank you, Mr. Chair.

I have some information to share and a question I would like to ask.

I care a lot about the development of the tourism industry across the country, so let's talk about investment and return on investment. Yesterday, we met with representatives of Destination Canada. They told us that one dollar of public funding generates $24 in revenue. What is more, one in 10 jobs rely on tourism, and tourism is Canada's second-largest service export. In figures, that amounts to $31 billion per year. As you know, yesterday, it was pointed out that, after four times in 10 years, if there is one industry that has not prospered the way that it should have, it is the tourism industry.

How is it that the government has not kept its promise to conduct a comprehensive EI reform? We have hard numbers on the return on investment, as I mentioned. Why is the government not conducting this reform?

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

Thank you very much for the question.

My deputy is a certified accountant. I would ask him to respond to this question for your clarity and for that of the Canadians who are listening.

Thanks.

[Bill Matthews]

Thank you, Mr. Chair.

President, I'll probably disappoint you with this answer.

I'm not familiar with the actual study that shows the economic benefits per dollar invested, but my colleague Antoine and I would be happy to get a look at it.

When you are doing cost-benefit analysis, it's really important to understand the methodology to see how far it goes. However, we will educate ourselves on the study.

Thank you.

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

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you, Madame Gaudreau.

We're going to suspend very quickly to say our goodbyes to the President of the Treasury Board, and then we'll get restarted right away.

[The Chair, Conservative, Kelly McCauley]

Thank you for your patience. We are back.

Mr. Patzer, the floor is yours for a five-minute round.

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

I'll let Mr. Gill take this round, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Mr. Gill, go ahead for a five-minute round.

[Harb Gill, Conservative, Windsor West, ON]

Thank you, Mr. Chair.

Thank you, Mr. Matthews, for being here.

I want to focus on what Canadians are being asked to approve in these estimates and how they can have confidence in the system behind those decisions. If you look at it from two perspectives, you see that the analysts and budget officers are raising concerns about clarity and fiscal discipline and that Canadians are asking a simpler question: Where is the money going, and what are we getting for it?

Bay Street is questioning clarity from the Treasury Board, and Main Street is questioning the results. They have no clue what's going on with the Treasury Board. There's a severe lack of confidence, unfortunately.

Let me go back to what Ms. Gaudreau pointed out earlier with the minister: that you're protecting the RCMP and Department of National Defence but not the veterans, which is absolutely true. The bureau of pensions advocates was here about two weeks ago, and it's telling us that half its lawyers are being asked to leave because of the cuts. On average, when a veteran comes to the bureau to file a review or a complaint, it takes the bureau roughly five years to decide what's going to happen with the veteran's file, and 89% of the time, that file or complaint results in the veteran's favour. These are lawyers who are working on those files.

Now, the same lawyers...and I'm a police officer, so I know this. The Jordan decision provides an accused the ability to say that justice denied is justice delayed, and they have a one-and-a-half-year window. If a Crown is not able to finish the charges against the accused in a year and a half, they walk free, but a veteran who has put on a uniform for this country and has stepped in front of danger for our nation.... As the minister said, we appreciate their sacrifices. However, it doesn't feel like we appreciate their sacrifices, because we have just extended past the five-year period that same veteran's ability to have his case reviewed.

Do you think that's fair, sir?

[Bill Matthews]

There's a lot in that question, so maybe I'll start at the beginning.

In terms of the Department of Veterans Affairs and its budget, if you look at the main estimates that were recently tabled versus last year's, you will see that they're actually going up. That is a reflection of the population and the services. Veterans Affairs was assigned a 15% reduction target in terms of the proposals. The proposal that was accepted is related to, I'll say, the subsidization of marijuana for medical use for veterans, so that's the cut from the CER-related exercise.

The reduction the member was referring to in terms of the lawyers—and they may be housed at the Department of Justice; I will confirm that—is the expiration of a temporary program. I know people struggle with temporary programs because they often do get renewed. However, in this case, it was meant, as far as I know, to address a backlog. There had been a reasonably good dent put in the backlog, and that was the reason that funding was expiring on schedule. There are other kinds of temporary funding across the government that absolutely get renewed, but the initial idea of temporary funding is that it's time-limited to address a specific problem, and that was the case here.

[Harb Gill, Conservative, Windsor West, ON]

Mr. Matthews, the backlog still exists and is still ongoing, unfortunately, and the veterans are tired of that. They keep coming back and complaining to you, perhaps, to the Veterans Affairs folks and to us as well when we meet them. They're saying that this is not the country they sacrificed things for. They don't accept that.

Getting back to what Mr. Patzer said, the debt is going up to $1.2 trillion and counting. Servicing that debt costs roughly $1 billion a week, and by 2031 it's going to be roughly $2 billion. That's according to the PBO. We have heard from the minister that the spending this year has gone up by 15.9% compared with last year. This is when you're proclaiming—not you per se, but the government—that we are tightening the belt. I would hate to think what the number would have been if he had not decided to tighten the belt.

There's a question that folks out there have. Is this an illusion or is this the worst-case scenario, where neither the government nor the Treasury Board has any clue in what's going on? That's the perception, unfortunately, that is out there. Would you care to comment, sir?

[Bill Matthews]

Certainly.

The budget tabled by the government in late 2025 did forecast a $79-billion deficit for the 2025-26 fiscal year and a deficit in the mid-$60 billions for 2026-27 and 2027-28. Underneath that, or part of that, is a priority around reducing the deficit related to operating. By 2028-29, the government has a stated objective of only running deficits related to capital investment.

The government is deliberately running a deficit over these next few years to fund investments in the programs and services that are outlined in the budget. The main estimates and following supplementary estimates do indeed reflect the plan the government has laid forward.

[Harb Gill, Conservative, Windsor West, ON]

The challenge, Mr. Matthews, is that there's no transparency—

[The Chair, Conservative, Kelly McCauley]

I'm sorry, Mr. Gill. That's your time.

Mr. Watchorn, welcome back to OGGO. You have five minutes, please.

[Tim Watchorn, Liberal, Les Pays-d'en-Haut, QC]

Thank you, Chair.

I will ask my questions in French, Mr. Matthews, if you don't mind.

As you know, our government is investing heavily in defence. I am pleased and honoured to serve on the Standing Committee on National Defence, and I would like to ask you some questions about the supplementary estimates (C) and the investments we are currently making.

I listened to the minister's remarks this morning, and I think that it is important to be aware of what is happening around the world. Right now, the situation is changing every day. However, I heard that the Canadian Armed Forces has a $1-billion fund so that they can take action if necessary.

I would like you to tell us why this fund is necessary and important so that our operations don't come to a halt, because that is what would happen if the necessary funding was not available.

[Bill Matthews]

Thank you for the question.

As the President of the Treasury Board already indicated, there is a fund for the Canadian Armed Forces and for two or three other departments that are responsible for national security.

Because of the historic investment in national defence but also the need to do it quickly, I would like to share with members that supplementary estimates (C) get finalized inside government long before they get here.

This is really a fund that is necessary for the government to meet its objectives around defence spending. If a project happened to be running ahead of schedule, with services or goods delivered ahead of schedule, and the department didn't have a sufficient vote to cover it, this fund will give them access, if they request it, to do just that. As was mentioned, the government confirmed earlier this morning that it has met its 2% target for the current year, and we will come back to Parliament in the next supplementary estimates with a transparent accounting of how that fund was used.

I do not expect that you will see the full billion used, but that will be determined over the future couple of days and weeks.

[Tim Watchorn, Liberal, Les Pays-d'en-Haut, QC]

Thank you, Mr. Chair.

I also had the opportunity to visit some military bases, like the one in Petawawa, to meet with soldiers and find out their needs. The soldiers reacted very positively to the pay raises given to them in this budget. The same is true for the weapons upgrades. We just signed a contract for rifles, and we recently signed a contract for shells in Quebec. We are rearming our Canadian Armed Forces in an appropriate way, because that was neglected for many years.

I would like to know whether there is funding in the supplementary estimates (C) for improving housing for all members of the Canadian Armed Forces.

[Bill Matthews]

Thank you for the question.

I will give my colleague, Mr. Brunelle‑Côté, the floor in a moment. However, if I remember correctly, the amount included in the supplementary estimates (C) is for a project affecting Canada's air force.

and two missions that National Defence runs abroad.

I think that is where most of the funding in the supplementary estimates (C) is being allocated. However, there is also money in the main estimates every year to improve housing on Canada's military bases.

I will add one other point. When we think about rearming the military, it's very easy to turn to equipment improvements, which are absolutely necessary. However, really improving living conditions on the base, both in terms of housing and infrastructure, is absolutely critical for the women and men and their families who are supporting Canada in this role. That often gets lost in terms of importance.

Mr. Brunelle‑Côté, can you confirm what I just said?

[Antoine Brunelle-Côté, Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat]

Yes, I can confirm what was just said. The only thing that I would add is that there is also $561 million for a series of capital projects. There is nothing for housing specifically, but there is a series of capital projects that are also included in the supplementary estimates (C).

[Tim Watchorn, Liberal, Les Pays-d'en-Haut, QC]

Thank you.

I'll pass it on to the next colleague.

[The Chair, Conservative, Kelly McCauley]

Next is Madame Gaudreau.