Government Operations Committee on April 14th, 2026

[Thomas Larouche]

I can neither confirm nor deny that today.

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

Okay.

What I'm wondering is how we can bring all these visions together to determine the priorities between security, the climate transition and, of course, inevitably, economic growth.

I can understand that we want to be even more efficient in the use of all the resources at our disposal, but we can't work miracles. There is a lack of clarity. That is why we are here today.

When the decisions are made, I wonder if we will be in for any surprises and whether the rationale behind the priorities will allow us to clearly explain to the public why the investments were made.

In everyday life, people are willing to try and look to the future, but our young people are still no better able to buy their first home. People aged 65 to 74 are still being left behind. People still aren't getting what they need when services cost five times as much because of inefficient technology. It's hard to believe.

How are priorities decided?

Are they just handed to you, with a request to juggle the figures, send them to the Parliamentary Budget Officer and cross your fingers?

[Nick Leswick]

To some extent, it is very difficult. I think the government is challenged with reconciling all of the things that you outline: national defence, economic growth, aging population and certainly sovereignty. Just in the last 48 hours, there's the reaction around Anthropic and Mythos and having a domestic pan-Canadian and international view on how to prepare ourselves for that.

Usually, it's all associated with a potential draw on the fiscal framework, so we have to be very careful about where that incremental spending decision.... I said “we”, but as a bureaucracy advising the government where that incremental dollar is spent, recognizing that there's a broad waterfront of pressures and then trying to maintain a real firm footing on, as your colleague said, fiscal sustainability—I'm not giving you the entire laundry list, you know—amidst pressures on interest rates and household debt loads, I can say it is a challenge. That's part of the challenge, and we do our best to advise the government to navigate that.

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

What is your advice?

At the start, you told us about your instructions. However, there is nothing better than having a hands-on approach. We also need to see what results we'll get based on the forecasts.

We agree that a budget is a plan and that the geopolitical situation is constantly changing. We know this, but we want to reassure people.

Today, what can we tell them, in concrete terms, about the decisions that have been taken and are being followed up on regarding what will be announced in the next economic statement?

[The Chair, Conservative, Kelly McCauley]

We'll have a really brief answer, please.

[Nick Leswick]

In this context, I mean that the government is committed to fiscal sustainability. It's committed to investing in the economy, and it's committed to working with provinces across the country to deploy its agenda.

[The Chair, Conservative, Kelly McCauley]

Thanks.

We have Mrs. Jansen, please.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Thank you.

Mr. Leswick, it's very refreshing to hear you talk about two sides to a coin. That's wonderful.

I want to start by taking us back for a moment. When I sat on the finance committee, we studied the fallout from the Panama papers, one of the largest financial leaks in history. What did we hear at that time? We heard that billions of dollars were being routed through shell companies hidden in offshore jurisdictions, shielded from transparency and, in many cases, beyond the reach of enforcement. We heard plain as day that Canada really had a problem and not a small one: a structural one.

The agency at the centre of that fight is FINTRAC. This is the body responsible for tracking suspicious financial transactions, identifying money laundering and passing intelligence on to law enforcement. It's literally the follow-the-money agency. Here's my problem. At the very moment when financial crime is becoming more sophisticated, when we're dealing with fentanyl trafficking, organized crime, sanctions evasions and international capital flows, we're now talking about cuts to FINTRAC.

I want to connect it to something a little more recent. We've seen repeated concerns about Canadian money—pension money, investment capital—flowing through offshore jurisdictions like Bermuda or the Cayman Islands, and we know that Brookfield, which our Prime Minister is linked to, has investment structures involving offshore jurisdictions. To be clear, offshore structures are not automatically illegal, but that's exactly the point. That's what we learned from the Panama papers. The issue isn't always illegality. It's lack of transparency. It's the ability to move money through complex structures where ownership is obscured, tax obligations are minimized and accountability becomes optional, and that's precisely the space that FINTRAC is supposed to monitor.

Let me ask the obvious question: How can we possibly claim to be serious about financial transparency when we're making cuts to the very agency tasked with detecting suspicious financial flows? When it comes to actual enforcement capacity, we're pulling back. It seems to me that it's like installing a state-of-the-art alarm system and firing the security guard.

Here's my question for the officials. If FINTRAC is expected to do more, to track more transactions, enforce higher penalties and monitor increasingly complex financial flows, how can it do it with fewer resources?

[Nick Leswick]

Thank you for the question.

To be honest, I feel vulnerable here saying really anything about FINTRAC without their being at the table speaking to how they would effect their proposed reductions. I would agree with the premise of your question in terms of FINTRAC's accountability on intelligence and supervision, in particular around AML, anti-money laundering and anti-terrorist financing, and its general surveillance of suspicious transactions, whether they be in offshore tax havens or funds being moving in and out of money services businesses. The list goes on.

They're not at the table, so I can't speak to where they would have sourced their savings proposals. All I can say is that I would hope that an organization like FINTRAC—and I'm not speaking necessarily about FINTRAC here—would not reduce its resourcing in areas of the enormous priority you outlined.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

I know at the time when we were doing the study on FINTRAC, they were very clear that they were already under-resourced. Therefore, to me it makes absolutely no sense that they're going to have even fewer resources. I'm concerned about what message it sends to those who are trying to hide their money, to move money or to launder money through our system.

FINTRAC was saying they were under-resourced already—you can look it up in committee evidence—and now we're taking even more funds away from them.

[Nick Leswick]

I share your concern and I'm not going to sugarcoat it. Our expectation of FINTRAC and any other organization is that they find savings in potential administrative efficiencies. I know that sounds very generic, but in an organization like FINTRAC, where they receive tens and hundreds of thousands of suspicious transaction reports—that's their bread and butter—how many people or systems or efficiencies or thresholds are there for working with financial institutions to economize that effort?

That's the spirit of this exercise, but I don't want to dilute your point and message about the importance of FINTRAC's work.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

I come from a place close to Vancouver. I'm about an hour outside it. If there's one thing we've learned, it's that there's money laundering through housing, opioids and casinos. Honestly, from where I come from, it blows my mind the damage that has been done in that area. Now we're going to have less oversight because we're going to have less money going to FINTRAC, which was, like I say—and I think that was five years ago—already under-resourced. It doesn't make sense to me. We can see the fabric of our Canadian society being hurt by this, and FINTRAC is getting less money.

[Nick Leswick]

I would completely agree. The chair, Mr. McCauley, has often cautioned me about the separation between government and officials like me at these committees, so what I'll say is not a plug for the government or the minister. The minister is absolutely seized with what you just said. He made an appearance in Surrey. He has a perspective on this follow-the-money strategy. He was in Surrey a few weeks ago. He was in Brantford. He's completely seized with the point that you're making, and he's deployed FINTRAC in that context.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Except there's less money. To me that makes no sense. Five years ago, they were already under-resourced. That's the last of my statements.

There's less money and there's more trouble. I don't see this working.

[Nick Leswick]

All I can say is that maybe I can show up at this committee six months from now with FINTRAC and talk about the progress in the area you're discussing specifically and the resourcing associated with that. That's my commitment to you and the committee.

[The Chair, Conservative, Kelly McCauley]

Perfect. Hopefully it will be FINTRAC and you, not FINTRAC and Mythos instead.

Ms. Khalid, please go ahead for five minutes. Then we're going to go to Mrs. Block, and then we'll finish with Ms. O'Rourke.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Thank you very much, Chair.

Continuing on that point, recently the Minister of Finance announced a collaborative effort between FINTRAC and local law enforcement agencies to work together with each other. For me, this is a lot more efficient in combatting financial crimes such as extortion and money laundering. When we're talking about finding efficiencies, to me, that's the scope of what the comprehensive expenditure review really means. It's about finding ways that different departments and agencies can build that teamwork with each other instead of operating in silos.

Mr. Leswick, perhaps you can help us understand the following: What do you think is the scope of the comprehensive expenditure review, and how does collaboration between different departments help in achieving your objectives?

[Nick Leswick]

I'll pass it to Mr. Larouche.

[Thomas Larouche]

I can't speak specifically to the example you were mentioning, but in general, for the comprehensive expenditure review, departments were instructed to look at areas of overlap, for example. In their proposals, part of the identification of efficiencies was to see if they were doing the same thing as somebody else or if they could maybe work better with each other and rely on one program instead of the other.

Yes, that was a feature of the design. In general, it was an efficiency-focused exercise to look for ways to do the same amount of work more efficiently, with fewer resources.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

What are your expectations of this review? What do you expect this committee to provide for you at the end of it, to help with your deliberations?

[Thomas Larouche]

From a macro perspective, if we just take a step back, the comprehensive expenditure review starts from the premise of looking at where the public service was going. We had identified that between 2015 and 2024, over 10 years, there had been quite a bit of growth in the size of the public service. We looked at it. We have a chart in the budget showing a 40% increase. That's quite a bit. The Canadian population grew 16% during that same period, so when you look at that, you have to take a step back to see if we are getting services or programming out of it that is worth the additional cost.

Part of the objective of the comprehensive expenditure review is to try to bring back the size of the public service to a more sustainable base—that is, look at another, longer period of time—really it was after the COVID era—and then go back to an average growth that is a bit more sustainable. It's a bit of a recalibration. It's looking at being more efficient and going back to prepandemic levels of growth. That is a driving feature of the exercise.

Going back to my earlier point here, more than half of the savings come from efficiencies directly, but there is also a component that is looking at programming. Is the federal government offering programs that overlap a bit with what provinces are doing or with each other? That's also a component we are looking at in this review.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

I'm glad you raised that. It is absolutely my next question.

How do you measure efficiency versus performance for different departments, knowing how different the programming they offer really is?

For example, the Department for Women and Gender Equality, the Department of Veterans Affairs and the Department of National Defence all service very different components of Canadian society. How do you measure what's more efficient and what's not?

[Thomas Larouche]

We don't have a one-size-fits-all indicator. The process was that departments relied on a variety of indicators. They have program evaluations. They observe data. They have a pretty good sense of who their programs reach and what is more effective and less effective. They supported their ministers in making these savings proposals. They came back to the government and said that they believed these were areas that, for a variety of reasons, are a little bit less efficient. Generally, the determination of that was done at the department level, which knows the programming best.

Then, central agencies like finance, Treasury Board and the Privy Council Office supported decision-makers in making informed decisions on where to focus. The role of the central agencies here was really focused on ensuring that there would be no program integrity issues, that reductions were sustainable and that the health and safety of Canadians were protected.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Mrs. Block, go ahead.

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

Welcome. Congratulations on this new role of deputy minister. You've been here for a couple of months.

I want to circle back to the line of questioning of my colleague Mr. Hallan regarding the cost of our national debt.

I note that under Justin Trudeau, it doubled, and the current Prime Minister plans to spend even more than the previous government had projected it was going to spend, which I believe results in yet higher deficits and higher costs for Canadians. After all, today's deficits are tomorrow's taxes.

Mr. Leswick, in your role as the deputy minister, what lessons have you learned or are you learning from the comprehensive expenditure review that can be applied to future spending and future reviews? Are you developing a plan to reduce the deficit, if not in the short term, then in the medium or long term?