Government Operations Committee on April 23rd, 2026

[The Chair, Conservative, Kelly McCauley]

Good morning, everyone. Welcome to meeting number 37 of the House of Commons Standing Committee on Government Operations and Estimates, known in the four corners of the world, of course, as “the mighty OGGO”.

We're continuing our CER review today. We have Finance, FINTRAC and DND with us.

Before we start, though, I'll give you a gentle reminder to keep your headsets away from your microphones. Don't touch the microphones, and don't crinkle or fold paper, etc., near the microphones.

We have an opening statement, I understand, from Mr. Blanchette. Then we'll go to Mr. Moor for five minutes.

Mr. Blanchette, the floor is yours for five minutes.

[Philippe Blanchette, Acting Deputy Director, Corporate Services, Financial Transactions and Reports Analysis Centre of Canada]

Thank you, Mr. Chair.

I would like to thank the committee for the invitation to appear before you today.

My name is Philippe Blanchette. I am here to represent the Financial Transactions and Reports Analysis Centre of Canada, better known as FINTRAC. I am the deputy director responsible for corporate services, as well as chief financial officer and chief human resources officer.

I would like to acknowledge that I am speaking to you from the traditional unceded territory of the Algonquin Anishinabe people.

I am pleased to appear alongside my colleagues from the Department of Finance to provide testimony for the committee's study on the comprehensive expenditure review and FINTRAC's response to this process.

As you know, the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, plays a key role in Canada’s anti-money laundering and anti-terrorist financing regime. In fact, we fulfill a dual mandate for Canada: that of an anti-money laundering supervisory authority and that of a financial intelligence unit.

In practice, FINTRAC serves as a link to a wide range of private sector entities, law enforcement agencies and international partners in the fight against money laundering, terrorist financing and threats to Canada’s security.

FINTRAC is not responsible for law enforcement or conducting investigations. We do not investigate money laundering or terrorist financing, nor do we lay charges for crimes of this nature. In fact, our legislation requires us to maintain independence from entities responsible for law enforcement and prosecution.

Regarding the comprehensive expenditure review, as with other organizations, FINTRAC has undertaken the process of identifying savings measures that were identified in budget 2025. Prior to the announcement, we prioritized resources towards delivering on our core mandate, optimizing our processes and strengthening our organizational culture.

Following the announcement of the expenditure review, our focus was on maximizing the value of the centre's corporate expenditures, including travel and administrative expenses, and on enabling functions to ensure that they are efficiently and effectively supporting our core programs.

The centre's savings measures are also critical in supporting FINTRAC's broader modernization initiative, providing the centre with the flexibility to redirect resources towards the tools, technologies and capabilities needed to remain at the forefront of combatting crime. During our implementation of the comprehensive expenditure review, we were deliberate in ensuring that savings measures do not affect operational programs and responsibilities, and that we will also be able to effectively carry out our core mandate.

It is important to note that this review did not affect the funding FINTRAC received through its cost-recovered funding model for supervisory activities, which represents 60% of FINTRAC's total budget. In fact, with a significant increase in our supervisory-related resources over the next two years, we aim to significantly strengthen our supervisory program.

These increases under FINTRAC's cost recovery model are being directed exclusively to strengthening and modernizing FINTRAC's supervisory function in response to a rapidly expanding and increasingly complex regulated population, heightened financial crime risks and new legislative requirements. We will invest in resources to support supervision in the highest-risk sectors, respond to emerging threats and provide foundational technology, enabling functions and tools to make FINTRAC a more nimble and responsive regulator.

Separate from the cost recovery model, over the past six years, the Government of Canada has invested $175 million in FINTRAC's operations in recognition of our critical role in combatting money laundering and terrorist activity financing. This funding is being used to modernize the centre's tools and implement new digital technologies to receive, analyze and assess information in order to generate actionable financial intelligence. In the last six years, it has further supported the addition of 65 employees on an ongoing basis.

We recognize that FINTRAC is increasingly called upon to address national priorities, including the fight against fentanyl, extortion, cartels, vehicle theft, terrorist organizations and other forms of emerging criminal threats.

I would like to reassure committee members and the public that FINTRAC has the capabilities, expertise and legislative tools necessary to effectively carry out its oversight and intelligence responsibilities. We are at the forefront of the fight against these crimes thanks to our unique expertise in tracing the money trail to ensure the integrity of Canada’s financial system and the safety of its people.

Thank you, and I look forward to answering your questions.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Blanchette.

Mr. Moor, you have the floor for five minutes, please.

[Jonathan Moor, Chief Financial Officer, Department of National Defence]

Good morning, everyone.

Good morning, Mr. Chair and members of the committee. Thank you for inviting us today to present our comprehensive expenditure review on behalf of the Department of National Defence. I am joined today by the assistant deputy minister of HR-civilian, Renée de Bellefeuille.

National Defence was given a target last year of $460 million in annual savings through the comprehensive expenditure review exercise. This is based on 2% of our vote 1 and vote 10 allocations. The reduction across the department has been developed through a comprehensive efficiency program covering a number of different initiatives to achieve these ongoing savings, in particular the following: retiring selected fleets that are nearing the end of their service lives; streamlining the real property portfolio through the divestment of underutilized and surplus properties; expanding the use of energy performance contracts across our infrastructure, both increasing energy efficiency and reducing greenhouse gases; and finally, modernizing our internal business processes and our governance to reduce the administrative burdens and address any efficiencies identified.

The department has experienced a period of significant growth over the last year. We have a 35% increase in our authorities of $12.3 billion. This follows the announcement last summer of a significant increase in order to meet the NATO 2% of GDP target. In order to deliver these priorities, no job losses are anticipated because of the comprehensive expenditure review savings. Any personnel who may be affected by proposed changes in our organization will be repositioned toward high-priority work.

As you are aware, the Canadian Coast Guard transitioned to DND on September 2, 2025. The Canadian Coast Guard completed an analysis of potential spending reduction measures. However, a decision on the Canadian Coast Guard's proposals has not yet been finalized. Together, National Defence and the Canadian Coast Guard will continue to explore cost savings, looking for opportunities for greater alignment of project delivery and acquisitions. It's also looking at the use of shared infrastructure, logistics warehousing and specialized technical services across our two organizations.

The department remains committed to continually identifying and realizing efficiencies across its programs and projects, ensuring that effort and resources are focused where they deliver greatest value for the taxpayer and enhance our military capabilities.

My colleagues and I would be pleased to address any questions or comments you may have.

Thank you very much.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

We'll start with Mrs. Jansen for six minutes, please.

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

Thank you.

Mr. Blanchette, British Columbia is facing a very serious organized crime problem. In Surrey alone, there have been 87 reported extortion cases this year, and it's only April. Behind those numbers are shootings, arsons and business owners being pressured out of the communities they built. These are coordinated transnational networks operating with increasing aggression.

Minister Champagne has been touring the country, promoting the Liberals' follow-the-money strategy as the answer, even though you are told by the Liberals to make cuts to your ability to produce financial intelligence. How will making these cuts help you deliver on that follow-the-money strategy and stay ahead of these networks?

[Philippe Blanchette]

I want to reiterate that through the CER, for us the maximum ongoing cost was about $6 million. We were able to achieve those savings just by reviewing our corporate expenditures and the way we were doing business in terms of supporting the programs. No cuts at all were done internally. We were able do this exercise without cutting any FTEs or employees or any operating expenditures in terms of our program. That means our financial intelligence unit had zero reduction in costs in this exercise, or in our supervisory function, as they are covered through another method of finance.

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

What does “They're covered by another method of finance” mean? Is this a bit of a shell game?

[Philippe Blanchette]

No, our supervisory programs are cost-recovered, which means that they're treated differently. The cost expenditure review did not require us to find savings and remit any money in terms of cost recovery, because this is money that is paid by our reporting entities. We have 60% of our budget cost-recovered through the regulated entities that we have in our legislation.

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

I understand, from your documents, that, basically, you're shrinking your operational footprint. The wording was about financial intelligence—that you're going to shrink financial intelligence.

Now, the Cullen commission documented how these networks work. FINTRAC reports confirm it: underground banking, real estate, casinos, money service businesses and crypto. We know the channels. We know the money moves, and we know we have to stay ahead with our enforcement and that knowledge is useful only if FINTRAC gives it to police. Your disclosures are what give police an ability to open those investigations. If FINTRAC is cutting funding for the production and dissemination of financial intelligence, doesn't that mean fewer files, less information for the police and, actually, less safety for Canadians?

[Philippe Blanchette]

I just want to reconfirm that we have not cut any program operations in terms of our financial intelligence unit, so I'm not sure in which document you—

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

Your document actually says you're cutting funding for the production and dissemination of financial intelligence. That's what the document says.

[Philippe Blanchette]

I don't know which document you're looking at, but I can confirm we've cut, and I can reconfirm where we've cut. We've cut in four different buckets. Just to give you an example, we separated our stuff into four buckets: operating expenditure—

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

I'm just going to say it's the CER documents that went to the PBO. That's where it says you're cutting, exactly, the intelligence funding that's needed.

[Philippe Blanchette]

As I said, we've cut in four places. There were four buckets: streamlining operation costs across key functions, which was specifically focused on travel and expenditures, so the cost of operations; workforce optimization, which was specifically focused on enabling functions such as HR, finance, communications, etc.; and the third bucket, which was to refocus on the IM/IT resource, reorganizing that unit in order to find—

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

I'm sorry. My time's really short. I have to say that, if your documents that went to the PBO were incorrect, I think that's something that needs to be figured out.

Secondly, Minister Champagne's going around the country, promoting this Liberal follow-the-money strategy. I saw that you're actually going to be requiring and requesting more money elsewhere. To me, that's a shell game. The Liberals are saying we're going to save here, but we're going to ask for more money there.

I think Canadians should understand that we were told, during the election, that we were going to save money. Now, in actual fact, we're just doing a little shell game. We're going to show a little bit of change over here while we're asking for more money. We should be making sure that we have sufficient funds, because this transnational stuff is incredibly dangerous, and it's going to become a problem for Canada. You have to explain that shell game thing to me. Why are we doing that?

[Philippe Blanchette]

That's one perspective, but we need to understand that our organization is financed by two different.... There's a voted appropriation, and then we have a cost-recovery mechanism on a supervisory function, which has significantly increased, and we are investing in our supervisory function. Our voted appropriation is where we found—

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

I have just one more question, then.

You guys were very much a part of 200 cases that happened last year, 200 major investigations. Are you telling me that you're going to be saving money on travel, and you're going to be able to do a lot more of those investigations by saving money on travel?

[Philippe Blanchette]

We saved money on travel in other parts of the organization not impacting intelligence. Factually, in terms of...we're trying to be agile to emerging trends.

The extortion is a good example. We've increased our presence regionally in order to be able to help—

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

Do you do that with less money? Is that how that works?

[The Chair, Conservative, Kelly McCauley]

That is your time, I'm afraid.

I pass the time to Mr. Gasparro, please.

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

Thank you, Chair, and thank you to all for your service.

In our globalized world, international conflicts are no longer just fought in the battlefield. They're fought on economic terms. This illicit financing through digital assets—and I'm being quite specific here concerning Iranian-backed crypto—threatens the safety of Canadians and the integrity of our financial system. Canada has strong rules for crypto platforms and money-service businesses, including registration and reporting requirements overseen by FINTRAC.

The government is strengthening those tools by investing in the resources and authorities FINTRAC needs to act quickly on suspicious transactions and unregistered platforms.

As you all know, in budget 2025 we announced the creation of a financial crimes agency to help detect these threats. How do you foresee FINTRAC and the financial crimes agency working together?

[Philippe Blanchette]

We're actually excited about the financial crimes agency, because we have kept increasing the number of our disclosures year after year. Last year we produced about 2,200 disclosures of financial intelligence for our partners. Having financial crime agencies that are present and have the mandate to investigate and be there on the ground means that more disclosures will be used and be looked at, so that our intelligence will be used, moving forward.

I see the coming collaboration between the two agencies as very positive, as it will allow us to really focus on trends and high risks. We've been talking about being able to look at the intelligence in real time, with the proper tools, and being able to push that information as quickly as possible to our disclosure recipients. The financial crimes agency will allow us to do that quickly, because that will be its main mandate, and we'll be able to work together towards that.

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

Thank you for that.

I apologize, as I probably should have started with this next question. Can you explain to the committee and to the six people watching at home—

[The Chair, Conservative, Kelly McCauley]

They include my wife.