Government Operations Committee on April 14th, 2026

[The Chair, Conservative, Kelly McCauley]

Good afternoon, everyone.

Welcome to meeting number 34 of the House of Commons Standing Committee on Government Operations and Estimates, known far and wide as the mighty OGGO.

Before we welcome everyone back from the Easter break, I'll remind you to please not rustle your papers near the microphones when you're speaking. It causes distress to our valued interpreters. Please keep your headphones or earphones away from the mic at all times, and do not touch the mic, either.

We're continuing with our CER study. There's no opening statement, I understand, so we're going to go right to questions.

Mr. Patzer, you're up for six minutes, please.

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

Thank you very much, Mr. Chair.

Thank you very much, everybody, for joining us here today. We appreciate the time.

I'm going to jump right into it.

When the Department of Finance called for the spending review, which has led to layoffs, did you advise departments to make sure cuts would be proportionate between the national capital region and the other regions of Canada?

[Nick Leswick, Deputy Minister, Department of Finance]

Thank you for the question.

I'll say up front that I'm new in this position. I've been in this position for two and a half months. I'll defer some of your questions to Thomas Larouche. He's our director general of budget planning and he obviously predates me at the department, so he'll be able to go deeper into some of the questions you'll be posing this afternoon.

I don't believe there was any particular direction on regional proportions associated with the proposed spending reductions.

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

Do you guys in finance or anywhere in the government give a directive on what a rural lens would look like? Do you have a definition that you use for “rural?”

[Thomas Larouche, Director General, Budget and Government Operations, Department of Finance]

Thank you. That's a good question.

In the exercise of the comprehensive expenditure review, the directive was for departments to use gender-based analysis plus, which looks at impacts on a variety of stakeholders across demographic characteristics. It could include rural, but it's not a specific rural lens. The idea is that in doing their comprehensive expenditure review proposals, departments would be looking at these impacts and preparing the analysis, and that would be submitted with the proposal.

That would be the extent to which rural impacts would be factored in, but there is no separate rural lens applied per se.

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

Did you say that the GBA+ lens is what your department used, or were all departments across the entirety of the government instructed to use that lens?

[Thomas Larouche]

It would be all departments. Guidelines and directives were provided. There were templates issued by the Treasury Board Secretariat. When departments were preparing their proposals, they had to complete this analysis and submit it. It was not the Department of Finance that did it on behalf of proponents; it was the proponents themselves.

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

That's interesting. There were other folks here earlier in this study who said that lens was actually not applied in many cases, so I find that to be interesting.

Do you think that departments should consider the return on investment for spending items before deciding to cut them?

[Nick Leswick]

I'm sorry. Are you asking whether for every dollar saved there would be a return on that dollar saved in terms of what—

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

No, it's not necessarily that. Obviously, the government spends a lot of money. When it spends money, is it getting a return on that investment?

I'm curious to know if that's a consideration for the government and your department. When you were going through cuts, were people looking to see if there was a good return on the investment in the item they were cutting before they cut it?

[Nick Leswick]

My expectation was that departments submitting their proposals and central agencies reviewing those proposals, whether it was the Treasury Board Secretariat or the Department of Finance, would have assessed the lowest-performing, lowest-efficiency programs for reduction. The higher-efficiency and higher-performing programs that had a higher return on investment, whatever that return unit would have been—social returns or economic returns—would have been held harmless.

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

Would you consider, say, a 32:1 ROI a good return?

[Nick Leswick]

If I were in the private sector and I was getting a 32:1 ROI, I'd be pretty excited. In terms of whatever that return metric is in the departmental program setting, I'm sorry, sir, but it's hard for me to assess.

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

I'm curious about the Department of Agriculture and Agri-Food's cuts to research and research stations. The department has a 32:1 return on its investment in research, and we're seeing drastic cuts. One of the departments hardest hit by cuts is the research side of the agriculture department.

The University of Saskatchewan has also confirmed that there's a return of 32:1, and in some cases greater than that, on investment in research for agriculture. I would strongly encourage, going forward, that the return on investment be seriously looked at and considered.

I wanted to ask you a question. Despite the CER, it's been reported that finance has had the biggest year-over-year increase in budgetary spending, which has something to do with higher interest payments on our national debt.

Can you tell us today how much you'll be spending on interest charges this year?

[Nick Leswick]

In the budget, we would project interest charges, for the 2025-26 year we just closed, of $55.6 billion. For this coming year, the 2026-27 year, it's $60 billion as projected in budget 2025.

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

Does it worry you that the number keeps going up and up?

[Nick Leswick]

Does it worry me?

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

Yes.

[Nick Leswick]

I mean, yes, that's what I'm paid to do—to be very worried about our fiscal framework. Lower public debt charges are better than higher public debt charges, I would admit that.

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

Okay, so how on earth are we going to get to a path where we can actually lower that? I know that there are some fancy words about a stable level, but stable doesn't mean it's going down. If it's ever increasing, that's not good. How are we going to get it lower?

[Nick Leswick]

Listen, I'm not going to wave my hands here. There are different ways to define “lower”—lower as a percentage, as a proportion of your economy, as a percentage of GDP. In that context, public debt charges are trending lower, but just on a nominal value basis, I admit they're going higher.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Mr. Gasparro, go ahead, please.

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

Thank you, Mr. Chair.

Thank you all for joining us. Thank you for your service.

As you all know, the IMF released a World Economic Outlook today. It presents a challenging global economic outlook driven by the conflict in the Middle East and the subsequent elevated oil prices. The IMF reports that despite these pressures, Canada is forecasted to have the second-highest real GDP growth rate in the G7 at 1.5%.

Can you comment on how recent global shocks have affected the Canadian economy and how we are weathering the storm more broadly?

[Nick Leswick]

Sure. Thank you for the question.

The 2025 year we just closed was pretty bumpy. It was bumpy in terms of our GDP growth path. There was a lot of turbulence in and around “liberation day” and the anticipation leading up to the announcement of the Trump tariffs, as I'll call them, and a pull forward on economic activity ahead of that. Then there was a bit of a lull on economic activity coming out of the April liberation day announcements. Likewise, towards the end of the year there was turbulence in and around obscure things in economic accounts, such as inventories and export and import mismatches. The 2025 year was bumpy, but all signs were that there was a pretty strong hand-off into the 2026 year, so momentum has been pretty good. Business investment seems a little bit stronger. Sentiment indicators seem to be that activity is going to pick up, so that's helpful.

With respect to the conflict in the Middle East, I think we can all acknowledge that as an oil- or energy-exporting country, this is going to affect us less than it's going to affect other energy-importing countries in the G7. We're projecting economic growth in and around 1.5%, which is aligned with what was published this morning. That's considerably stronger than economies in Europe and Asia that are more exposed to what's going on in the Middle East.

That's encouraging, but in the same breath, Canadians are going to feel inflationary pressures associated with higher energy prices. Those inflationary pressures are going to feed into potentially a drag on financial conditions, which might make interest rates higher and tighten other financial condition indicators, like equity markets or other borrowing rates. That's concerning more broadly for the economy. We have to kind of balance the good and the bad and think about the distribution of growth across Canada and how government policy best fits into that.

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

Thank you for that very detailed answer. It obviously coincides quite well with the IMF's economic outlook as well, globally, that there's going to be a global rise in inflation, with emerging markets being more affected simply because they import most of their energy. I'm glad you touched on that. I appreciate it.

In light of the global economic shocks you referred to, can you speak to some of the steps we are taking to make Canada's economy more resilient?