Government Operations Committee on April 23rd, 2026

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

Yes, that's right, and mine as well. It depends on whether she's trying to sleep or not.

[Some hon. members]

Oh, oh!

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

Could you explain the difference between FINTRAC and the financial crimes agency?

[Philippe Blanchette]

Yes, FINTRAC is a separate agency. We act at arm's length because we are receiving a massive amount of data from financial reporting entities.

When we collect that data, it remains with FINTRAC. We do the analysis. We analyze if there are trends, if there are commonalities, if we have any suspicions from the reports. We amalgamate it together through analysis, and if it gives us an indication that there might be a crime, or something that could happen, then we share it with our disclosure recipients.

Our disclosure recipients then become responsible to investigate and follow the reports we've sent to them. The financial crimes agency will be an investigative body, as far as I understand.

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

Excellent. Thank you.

How much time do I have, Chair?

[The Chair, Conservative, Kelly McCauley]

You have two minutes.

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

Great.

I'd like to move to Bill C-2. Our new government placed some significant provisions in it to try to give FINTRAC and other departments greater intelligence powers. Unfortunately, it was obstructed and delayed by the opposition at the time, and we now have Bill C-22.

I had to put that in there, Mr. Chair. I apologize, though it's sort of a sorry, not sorry, I guess.

Can you speak to some of the provisions that were maybe in Bill C-2 that you would like to see in future legislation to help FINTRAC?

[William Kendall, Senior Advisor, Financial Crimes and Security Division, Department of Finance]

I'm William Kendall, from the Department of Finance. I'm working on financial crime policy, so I think I'm well placed to answer your question, and I'm pleased to do so.

As you correctly indicated, Bill C-2 had a number of measures to help fight financial crime. I think it's important to note, first of all, that many of those measures were brought into Bill C-12 and were actually passed recently. There are many measures, in fact, but to summarize, they strengthen the supervision, compliance and enforcement of the businesses and professionals regulated for anti-money laundering and anti-terrorist financing purposes. Those are the reporting entities that my colleague mentioned.

If we're talking about financial intelligence, that comes from those reporting entities that are on the front lines of the transactions that are trying to enter the financial system. It's very important that they take their responsibility seriously and that non-compliance is not treated as a cost of doing business. Those measures in Bill C-12 will address this part of the problem.

Of course, there are other measures in Bill C-2. One, which was passed, is also on the supervisory side in Bill C-12. It makes FINTRAC a member of the financial institutions supervisory committee, which will allow it to share information with other federally regulated supervisory bodies, most notably OSFI, the Office of the Superintendent of Financial Institutions, to better ensure strong—

[The Chair, Conservative, Kelly McCauley]

I'm sorry, Mr. Kendall. I need you to wrap it up.

[William Kendall]

To wrap up, the government still supports the other measures in Bill C-2 that weren't brought forward in Bill C-12. That's why some of them were mentioned specifically in budget 2025. It's to provide flexibility and reintroduce them in a future legislative vehicle. Of course, that is the government's prerogative.

Thank you very much.

[The Chair, Conservative, Kelly McCauley]

Next is Madame Gaudreau for six minutes, please.

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

Thank you, Mr. Chair.

My questions will be directed primarily at the representatives from National Defence.

I am the Bloc Québécois critic for veterans. Obviously, I meet with veterans on a weekly basis. There are also those who approach me directly, as a member of Parliament. People have been telling me for quite some time now that serving in the forces is truly a tradition passed down from generation to generation.

Right now—and you’ll see where I’m going with this—veterans are telling me that, given what they experience and endure after serving in the armed forces, they wouldn’t want their children to enlist.

How can we explain this decline in trust in the military, even as we try to better equip our defence forces?

[Jonathan Moor]

Thank you for the question.

For clarity, I will respond in English.

I'm the chief financial officer at the Department of National Defence. I'm clearly not the chief of the defence staff or the vice. That question would probably be better directed to them.

What I can assure you is that a lot of work is going on at the moment around improving recruitment and retention. Just last year, there was a very significant pay rise for all of our members. There was a 20% pay rise for the most junior members of the armed forces through to 8% for the most senior. That is a part of addressing some of the issues. There's also been an awful lot of work around sexual misconduct, racism and all the other things that are challenges for us as a society overall but that the military takes very seriously.

It's disappointing to hear your feedback, but I'm quite confident that over the last 18 months, very significant changes and very significant improvements have been made.

The very last thing I would say is that we're also investing very heavily in our capabilities and our infrastructure, including significant additional housing units, as well as the tools for the job and the capabilities our military requires in order to deal with this very challenging world.

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

I'll explain what's happening.

Although the Minister of Veterans Affairs truly wants to help veterans and make a difference, the fact remains that, to date, we are seeing budget cuts when it comes to veterans. In this context, how can we ensure better services?

Right now, as part of one of our studies, we are examining the partners in Canadian veteran rehabilitation services program, or PCVRS, which is managed in partnership with Lifemark Health Group, among others. It’s important for you to know this.

It makes no sense. The government is devoting a great deal of energy and resources to strengthening national defence, while veterans are broken. They are suffering and feel abandoned. I’m talking about a large number of veterans from Afghanistan.

Are you aware of this?

[Jonathan Moor]

Veterans Affairs is a separate government department, and I think you're well aware of that. What I would say is that all of the expenditures of Veterans Affairs are included in the 2%. I think they were subject to the comprehensive expenditure review, but maybe their CFO would be better in answering those questions.

Clearly, the armed forces care very deeply about their veterans, and that is why a lot of the investment is going in there. Just last year, there was $7.86 billion paid for by Veterans Affairs for veterans' interest. That was included in the 2%.

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

Mr. Chair, what we have here is proof—and I won’t point the finger at anyone in particular—that work is being done in isolation within the organization itself. The departments don't communicate with each another.

I feel as if it's the first time you've heard this, and that’s concerning. There were questions in the House the day before yesterday on this subject, and the minister said that an independent investigation would be conducted to ensure our veterans aren't being neglected. Yet that's exactly what we're seeing. We often find veterans on the streets. I'm shocked to hear that.

Do you commit to holding exploratory meetings to develop a concrete action plan with veterans?

Right now, people keep saying it’s inadequate, but there needs to be proof, and the first step is communicating with each other.

Do you commit to doing this?

[Jonathan Moor]

I absolutely commit that we are talking to Veterans Affairs, and the Minister of National Defence is regularly in communication with their opposite number. I personally speak to the chief financial officer of Veterans Affairs every few weeks, and certainly I've been working very closely with them, but I think you're asking me a question that is outside of my scope. This is a scope for the Minister of National Defence or for the chief of the defence staff.

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

Thank you very much, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

We'll go to Mrs. Block for five minutes, please.

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

Thank you, Chair, and thank you to all of you for joining us today.

I'm going to direct most of my questions to the Department of National Defence witnesses. I'll start with Mr. Moor.

As outlined in your departmental plan, your department plans to save approximately $460 million each year during the expenditure review by reducing some of your operating expenditures.

Will you be reducing the use of external consultants, and if the answer to that is yes, can you tell us by how much?

[Jonathan Moor]

Absolutely. We were also subject to the refocus in government spending, the cuts that happened a few years ago, and there was a focus there around reducing the level of consultants. What I can tell you is that over the last two years, we have reduced management consulting by $18 million, or 22%. We have reduced informatic services costs by $60 million, or 16%, and we've reduced temporary help services by $27 million, or 42%.

Those are examples of costs that should be focused on in terms of efficiency. However, our engineering and architectural services have grown over the last two years, because we are spending a lot more money on the construction of warships and on the construction of other requirements for infrastructure and our capabilities.

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

Thank you.

Just to make sure I understand what you've just said, the reduction in your operating expenditures that has been identified in your departmental plan captures what's happened in the past, not necessarily what's happening going forward.

[Jonathan Moor]

As I said at the start, over the last 12 months we've actually spent an additional $12.3 billion, so we are in an environment where National Defence is spending considerably more money. However, we are very focused on ensuring that this money is being spent wisely and providing value for money for the taxpayer.

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

I'm going to stop you, because my time is limited as well, and I'm going to assume that the answer to my question is yes.

I want to ask you a question about your plan to retire selected fleets. Was this already under way prior to the expenditure review as well?

[Jonathan Moor]

We always are focused on the age of our fleets, and the older our fleets are, the more expensive they are to maintain and sustain.

Just last year, the commander of the navy announced that he was going to be retiring eight of the Kingston-class maritime coastal defence vessels. That decision was made after the comprehensive expenditure review was put in place.

At the moment, we are still reviewing other of our capabilities, in particular when we are starting to see new capabilities coming on stream. You may be aware that submarines are now being considered by the Defence Investment Agency, and we would expect an announcement on that later this year. That would be an opportunity then for us to look at the four existing Victoria-class submarines, which are over 40 years old and are very expensive to maintain.