Government Operations Committee on May 26th, 2026

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

Okay. If that happens, maybe we'll find out.

What enforcement mechanism does Treasury Board have for the buy Canadian policy? We've been hearing a lot about self-reporting. The requirements feel kind of loosey-goosey, so what enforcement metric do you have to make sure that this 25%, or whatever metric is agreed to, isn't abused?

[Martin Krumins]

We will be using the annual risk and compliance process. It requires departmental deputy heads to provide attestations on where they are on the compliance. We will be monitoring and checking through a formula-based approach. We're going to look at what they said in their assessment and compare it to actual results in the fall.

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

Is it all retroactive, then?

[Martin Krumins]

I apologize, but I don't understand.

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

I'm Canadian, and I get the contract. You find out later that I'm not Canadian. That's retroactive.

[Martin Krumins]

Yes. There is a component of recipient audit as well. Maybe, Michelle, you can speak a bit about the recipient audit process.

[Michelle Kealey]

The departments are responsible for doing risk-based recipient audits. The expectation is that they would include some buy Canadian-related projects to ensure they are meeting the expectations of the funding agreement.

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

Does every department have extra budget capacity to do these audits?

[Michelle Kealey]

Do they have extra budget capacity? They would be expected to work within their existing resource levels for departmental audits.

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

Do they have the specific resources to do it?

[Martin Krumins]

In that case, each department has an internal audit shop and a chief financial officer who is able to exercise those requirements.

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

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Is it the deputy minister or the CFO who is overseeing those audits, though? I thought it was the deputy minister.

[Martin Krumins]

Ultimately, the deputy minister is responsible for the management of the department, but the chief financial officer executes those recipient audits on his behalf.

[The Chair, Conservative, Kelly McCauley]

We'll finish with Mr. Osborne.

Welcome back, Mr. Osborne.

[Tom Osborne, Liberal, Cape Spear, NL]

It's always a pleasure to be at OGGO.

I know you've touched on it, but I wonder if you can elaborate on the role of Treasury Board versus the role of departments in putting in place these policies.

[Emilio Franco]

As we highlighted in our opening remarks and as PSPC mentioned earlier, the buy Canadian policy is a PSPC policy, a Public Service Procurement Canada policy, and Treasury Board Secretariat's role is complementary to that. We've been working with PSPC to support implementation across government in extending it to grants and contributions, providing strategic direction and aligning it with our own policy instruments. Treasury Board's directive on the management of procurement—our procurement policy—was amended December 16 to reflect the importance of incorporating economic interests into procurement.

We also had an important role in extending the buy Canadian policy to Crown corporations. The buy Canadian policy is unique, in that it is the first procurement policy of the government that actually extends all the way down to Crown corporations. That required some work, because our policy doesn't apply to Crown corporations, so we had to issue orders in council to the respective responsible departmental portfolio ministers to require the extension of the buy Canadian policy to Crown corporations. That was a role we played in coordinating that function.

As well, we receive Treasury Board submissions, whether in procurement or in grants and contributions. As part of the process, we consider the application of buy Canadian to those submissions when we provide our advice to Treasury Board.

[Tom Osborne, Liberal, Cape Spear, NL]

Thank you.

Under what you've just outlined, can you talk about how you will inform key design components when it comes to the advice and guidance that you provide to departments and Crown corporations?

[Emilio Franco]

When it comes to departments, typically the Treasury Board plays a role in only the highest and most complex procurements. I'll let my colleagues speak to grants and contributions in a moment.

On those procurements that come in, we will ask the questions of how buy Canadian is applied, what the benefits are to the Canadian economy and if there are any Canadian employments resulting from this procurement. We will ask those questions as part of our challenge function to make sure that departments have considered not just the application of buy Canadian but also, in the story, what benefits result from the application of buy Canadian policy in the context of this specific procurement.

In terms of our guidance in advance of anything coming to Treasury Board, we work with departments, and we'll be providing advice to them on how to consider and think about Canadian influence to define requirements in a manner that supports Canadian interests. I gave an example to the member earlier, but another example is this: When you're designing a building, procurement will procure whatever the architect says that you need to build. However, if you ask the architect, “Can you architect this building in a way that will use Canadian steel, in a way that will use Canadian lumber?”, all of a sudden, not only is the procurement run with buy Canadian as an outcome, but from the very beginning—from the design—we'll support a higher likelihood of Canadian inputs into it. If that thought weren't there at the beginning, it likely wouldn't result in the same kind of outcome.

Part of our role will be working with managers across government to help them understand how to think early on about how to incorporate “Canadian” into the design.

I don't know if my colleague wants to speak to the G and C side.

[Martin Krumins]

Go ahead, Michelle.

[Michelle Kealey]

In the context of new programming for grants and contributions, they would come to Treasury Board for approval. Owning the policy on transfer payments, we would review the submission and specifically the terms and conditions.

In a case in which they touched on part of the five strategic industries, a natural question that we would ask our departmental colleagues is, have you considered buy Canadian? This is an iterative process that they would include in most circumstances. I indicated before that it could be specific eligibility criteria identified in the terms and conditions, or they could decide that they would simply identify specific provisions that would play out through the funding agreements.

[Tom Osborne, Liberal, Cape Spear, NL]

You touched on my next question, but can you outline what the framework and supporting instruments will look like when it comes to departments in terms of grants and contributions and whether there is that difference from the framework and supporting instruments for Crown corporations?

[The Chair, Conservative, Kelly McCauley]

I'm afraid that's our time, but we're going to add one more three-minute round for each and then a two-minute round for the Bloc.

Perhaps you can get the answer in that time, Mr. Osborne.

[Tom Osborne, Liberal, Cape Spear, NL]

Yes.

[The Chair, Conservative, Kelly McCauley]

We'll go to you, Madame Gaudreau, for two minutes, and then to Mrs. Jansen and back to the Liberals.