Government Operations Committee on April 23rd, 2026

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

Thank you, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Mr. Patzer.

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

Thank you very much.

To the Department of National Defence, you mentioned that the Kingston-class maritime coastal defence vessels were part of the cost savings, because you're going to be retiring those ships.

What's the replacement for them?

[Jonathan Moor]

The commander of the navy is constantly working across what the best fleet requirements are that are needed for the modern navy. We are now investing billions of dollars in new warships, through the River-class destroyer. We've also just finished the AOPS, the Arctic and offshore patrol ships.

The maritime coastal defence vessel is on the radar for potentially seeking further funding in the future, but at the moment, the navy is focused on its existing warships, the Halifax class and also the AOPS.

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

I was reading in the Ottawa Citizen this morning about the continental defence corvette.

Do you know when the RFI is going to be released for that?

[Jonathan Moor]

As I said previously, that's another part of the overarching naval strategy. The corvette is one element in that. The maritime coastal defence vessel is another element.

No decisions have been taken on either of those assets at the moment. We are focused, at the moment, primarily on the River-class destroyer.

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

The quote from Vice-Admiral Topshee was that “My heart tells me I need it in five years.” We still don't know when the RFI is going to go out. Most likely, the contract probably won't even be awarded until 2030. In here it mentions that the first ship would most likely not be operational until 2039.

You're the Finance guy. You're going to need some of this information and these details. Do you have a clear directive and a plan to get that RFI out, so that way the navy can get on with it? Obviously, the vice-admiral is pretty clear about when they would like to see it.

[Jonathan Moor]

The Government of Canada provided an additional $9 billion last year for us. That was allocated across a large number of different projects. We have been very focused on delivering those.

We are now developing up for the 3.5% plan, which was the commitment the Prime Minister made last summer to NATO.

That work has not been completed. I would say that the commander of the navy is feeding into that work and conversations are going on at the moment with the Minister of National Defence. We have to wait to see what the conclusion is on those, in terms of prioritization across all of the CAF requirements.

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

I hope that you're taking the words of the vice-admiral and others quite seriously about the timelines that are needed to get these replacement vessels in line.

We saw that the government has claimed to have hit its 2% NATO commitment, which is laudable, for sure. Are you familiar with the departmental results for the Department of National Defence?

[Jonathan Moor]

The departmental results are now being developed for the 2025-26 financial year. The financial year end is now complete. It was on March 31. We are working through all of the PAYEs and other invoices at the end.

We have exceeded the 2% target, but we are still not yet in a position to finalize the annual accounts. Once the annual accounts are finalized, then the DRR is also finalized. The DRR will be published later—

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

I'm sorry, but my time is short here. I just find it interesting when you look at the percentage of major new equipment spend and compare that to the GDP increase. It doesn't quite seem to add up. I know there have been lots of fancy announcements and big commitments and promises of spend, but when you look at what's actually been spent on major new equipment, it doesn't quite line up to get us up to 2%.

How much of this 2% and greater is due to swallowing in the Coast Guard or just shuffling a few departments around or fudging the lines a bit to hit that 2%?

[Jonathan Moor]

When you look at the overarching accounts of the Department of National Defence, 33% of our money goes on people. About 19% goes on professional services, which includes creating the warships and the other requirements we have.

This is the first year that Canada has hit the NATO target of spending 20% of its entire money on capabilities. When we start looking down that, we have the CMMA and the P-8 Poseidon, which is being constructed at the moment; we have the CC-330 Husky, and all of its equipment is now coming into Canada. In fact, in terms of the CC-330 Husky, we're now at four in the organization.

[The Chair, Conservative, Kelly McCauley]

That's your time.

We're going to finish up with Ms. Fancy.

I just have a quick question. You said that the P-8 is coming out. I just read that the P-8 has been delayed further. Unless I misheard, it sounded as though you said it was coming into Canada or coming into service. Could you...?

[Jonathan Moor]

I have to go back and check the actual details of exactly when it's being delivered.

[The Chair, Conservative, Kelly McCauley]

I don't think that you should be informing committee if you don't know the actual details.

It's just been announced that the P-8 has been delayed by a fair amount of time. I think it's unfortunate that you're coming to this committee and stating something as fact when you just stated yourself that you don't know the details. I just ask that we stick to items that we are sure of.

Madam Fancy, we'll finish with you, please.

[Jessica Fancy-Landry, Liberal, South Shore—St. Margarets, NS]

Yes, let's talk about some hard facts. I have four questions today under two different themes.

The first fact I'd like to talk about is that sometimes we look at financial crimes like extortion or cryptocurrency as a more of an urban issue, but a fact that's happened in my riding recently was that 80-year-old Gladys lost $30,000 in one of these schemes. In rural and coastal communities like mine in South Shore—St. Margarets in Nova Scotia, access to financial literacy and fraud prevention resources can be very limited.

I want to know how FINTRAC is ensuring its anti-fraud efforts will reach people like seniors, seasonal workers and small business owners, who are outside of those more urban centres.

[Greg Reade]

I can start off, not necessarily.... I mean maybe it's been said about what FINTRAC does.

The Financial Consumer Agency of Canada also runs a number of financial literacy programs and initiatives that are available for all Canadians, including on fraud prevention. Just to note again, one of the key tenets of the anti-fraud strategy that's under development is awareness-raising for all Canadians.

If there's anything specific....

[Philippe Blanchette]

At FINTRAC, we work with reporting entities to provide them with typology and with tips and tricks on how to determine what could be fraud, so that they can report to us and then we can use that financial intelligence and disclose to our recipients. That's mostly who we are working with directly—our reporting entities.

[Jessica Fancy-Landry, Liberal, South Shore—St. Margarets, NS]

I just wanted to give a reminder that sometimes it's not a financial issue; these are also social issues.

The second theme that I'd like to get into is the U.S. administration, which has continued to claim that a major trade irritant is illicit financial funds directly related to drug trafficking. We know that last week, Minister Champagne met with his American counterpart, Secretary Bessent, and discussed a shared goal to crack down on these criminals.

In terms of partnership and collaboration, are you seeing increased cross-border co-operation to help track down these illicit funds?

[Philippe Blanchette]

I can speak from a FINTRAC perspective. We've always had a relationship with our partners internationally. FinCEN, for example, in the U.S., is a partner that we share intelligence back and forth with. We share typology. We exchange on trends and what they see on the ground, etc., and we do the same. There's an active partnership there that has never really ceased. It has continued despite everything that's been going on.

I would also say that FINTRAC is positioning itself to be agile. When things are popping up, we can move our teams and so forth. One of the examples is all the efforts that we've made in terms of the fight against the illegal fentanyl. Since last year, we've redeployed existing resources. We've brought them directly to our disclosure recipient, so they could be there, hear, and then come back. This way, we keep at arm's length but work on what our disclosure recipient needs as far as information in order to combat illicit drugs.

[Jessica Fancy-Landry, Liberal, South Shore—St. Margarets, NS]

Nice. We ended up with a czar because of all that.

Also, revocations of money service businesses and cryptocurrency exchanges are at an all-time high. Showing that government is seriously tackling fraud and illegal financial flows, I want to know how this enforcement work follows that revocation.

[Philippe Blanchette]

In terms of the MSB, we've done a lot of work. We've revoked registrations for more than 120 money service businesses since the start of the year.

We've also issued about $200 million in penalties over the past two years to money service businesses in violation. Also, legislative change, like having a universal enrolment and so forth, which we will implement, will help us better understand all the money service businesses that are within our country, so that we can identify risk right from the get-go and then go in and ensure that they are following the supervisory requirements.

[Jessica Fancy-Landry, Liberal, South Shore—St. Margarets, NS]

Thank you, Mr. Chair.

Thank you, witnesses.

[The Chair, Conservative, Kelly McCauley]

Thank you for being with us today.

I have a couple of quick questions.

Mr. Kendall, you mentioned that “the government still supports the other measures in Bill C‑2 that weren't brought forward in Bill C–12.” Are those items purely what is in Bill C-22, or are there other items in Bill C‑2 that you are referring to that also didn't make it into Bill C‑22?

[William Kendall]

There are a few measures. I was referring to Bill C-22, but there are other measures.