Public Accounts Committee on Feb. 9th, 2026

[Kelly McCauley, Conservative, Edmonton West, AB]

I'll find the exact reference.

[Annie Boudreau]

Okay.

[Kelly McCauley, Conservative, Edmonton West, AB]

It talks about possible contingencies, based on the potential risk of the payout. I'll find it exactly for you.

I actually have only 13 seconds left, so I'll have the page number when we come back.

[The Chair, Conservative, John Williamson]

Thank you, Mr. McCauley.

We'll go now to Mr. Osborne.

You have the floor for six minutes, please.

[Tom Osborne, Liberal, Cape Spear, NL]

Thank you, Mr. Chair.

To the Office of the Auditor General, thank you for your work. I know that you mentioned overseeing your 250 employees in your talking points. Most of those would have been involved at some point in overseeing the public accounts. It's a monumental task.

You indicated that the public accounts were presented fairly and that there was clean accounting that followed accepted accounting principles and standards. I guess it's a compliment not only to you but also to the staff at the Department of Finance, because it's a monumental task to undertake on such a huge budget. I think it's 27 or 28 consecutive years that your office has overseen it with a clean record.

The question that I was looking to ask was on separating the capital investment in future budgets to focus on operational spending versus capital spending. What are your thoughts on that?

[Karen Hogan]

We have 250 financial auditors who work on Crowns and in departments and agencies. At some point in time, they touch the public accounts work, but we have so many others across our office.

However, the compliment for the public accounts goes to public servants. We do not prepare the financial statements. We just come in and see whether they've been fairly presented and whether the accounting is right, so I think it rests with Department of Finance, the comptroller general and the countless public servants who, on a day-to-day basis, try to maintain accurate financial records.

When it comes to capital budgeting, I have nothing to do with the budget, so my office doesn't opine on the budget. We're not involved in it. We're not consulted on the budget. The presentation is one that the government has chosen.

For me, what will be important is that the financial statements continue to follow public sector accounting principles. We will opine against that, and in order to maintain a clean opinion, the statements will need to be presented in accordance with those standards.

The definition of a “capital expenditure” for the budget deviates a little from those standards. As long as the statements then present it fairly, I think it'll be fine.

In my view, it could create confusion for a reader who is trying to crosswalk from the budget promises and commitments to the actuals that show up in the financial statements. I have had many conversations with the Department of Finance and the comptroller general's office about making it clear, going forward, that you can use the financial statement discussion and analysis to do that, but to not create additional confusion with a reader and a user of the statements.

[Tom Osborne, Liberal, Cape Spear, NL]

Perfect. I appreciate that. The separating of operational from capital, provided it is clear, would not negatively impact how your office would oversee the public accounts.

[Karen Hogan]

As I said, it will depend on how those capital expenditures are presented.

In the financial statements, only expenditures that result in assets for the Government of Canada, federal assets, should be shown as capital expenditures. In this case, transfer payments to a province, where the province might be using them for a capital investment or an infrastructure build, would, in the budget, be seen as a capital expenditure but would be shown as an operating expenditure in the financial statements because transfer payments of a federal government are operating expenditures.

That's why I said it could create some confusion, and it'll be important to be clear. The statements need to be prepared in accordance with public sector accounting standards in order to try to maintain that clean opinion.

[Tom Osborne, Liberal, Cape Spear, NL]

With Canada having one of the lowest net debt-to-GDP ratios in the G7 and one of the smallest deficit-to-GDP ratios in the G7, how does Canada compare to other G7 countries and OECD peers in terms of our fiscal capacity?

I will ask the Department of Finance this: In your opinion, how do we compare with other G7 countries in terms of our fiscal capacity, our ability to borrow? I would think, based on what I've read and from my experience, that Canada is seen as one of the more trusted countries, with the oversight of the Office of the Auditor General and the comptroller general and with the fact that for decades the finances of the country have been presented fairly and accurately.

[Nick Leswick]

Yes, indeed.

We enjoy a strong AAA credit rating at the federal level. We have a very sound fiscal framework. We have a low net debt-to-GDP ratio, and we compare very favourably to other advanced economies with AAA credit. We're mindful of that as we move forward in terms of how we advise the government in deploying new spending measures. It's fundamental to how we advise the government.

[Tom Osborne, Liberal, Cape Spear, NL]

I noticed that with the current PBO and former PBO, there was some discrepancy between some of their opinions. I asked in the OGGO committee last week about the difference in investment shown by officials in the Department of Finance and what the current Parliamentary Budget Officer had looked at. He admitted that he did not take into account the fact that interprovincial trade barriers were coming down or that there were other international trade deals and so on that would create a more competitive environment and allow for greater investment, in my opinion, by those who are tendering on projects in Canada.

Having been a finance minister in a province for three years, I know that politicians don't do the analysis; that's done by finance staff. I have come to have great respect for the analysis done by finance staff.

Can you talk about the chart and the difference between what the Parliamentary Budget Officer put forward in terms of the $1 trillion in investment and what your officials had put forward?

[Nick Leswick]

Perhaps we can follow up. You say the chart that the PBO put forward and the $1 trillion. I don't know that I'm following exactly.

[Tom Osborne, Liberal, Cape Spear, NL]

He estimated, I think, just under $800 billion, versus the $1 trillion put forward by your officials.

[Nick Leswick]

Perhaps we can follow up with the committee in writing on the decomposition of the $1 trillion so it's clear, and you can do a comparison—

[The Chair, Conservative, John Williamson]

Thank you very much. That's your time, Mr. Osborne.

Mr. Lemire, you have the floor for six minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

Thank you all for being with us today for this important exercise.

I am going to start with the Treasury Board Secretariat.

According to data from the Treasury Board Secretariat, there are 8,140 executives in the Canadian public service. Among them, 7,987 executives received performance bonuses, totalling $146 million. If we apply the rule of three, we realize that 98% of them received a bonus. So that is about $18,000 for each of those people.

Honestly, I hope that those who were managing the benefits delivery modernization program are part of the remaining 2%, but I suppose that is another debate.

Is that not obscene, in a context where jobs are being cut precisely because executives have not been able to properly manage the allocated budgets?

At the same time, if 98% of them get a bonus, at that point, it is no longer a bonus; it becomes an obligation on the part of the employer.

[Annie Boudreau]

Thank you for the question.

In fact, executive compensation, the performance bonus you just referred to, depends on a number of criteria. The measurement criteria are not just the delivery of programs for Canadians. We also assess how certain elements are managed internally by managers, such as their own work unit and diversity and inclusion in the public service.

I am not responsible for the program within the Treasury Board Secretariat, but that is what I can offer as an answer.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

In budget 2024, an additional $2.9 billion was allocated to the benefits delivery modernization program.

Up to now, how much has been spent on this program and what kind of expenditure monitoring do you do for a project like that?

How do you react to the fact that a project initially valued at $1.75 billion now costs $6.6 billion, according to the latest figures?

[Annie Boudreau]

Thank you very much for the question.

As I understand it, the amount of $6.6 billion is the amount that will be spent between now and 2030–2031. It is not just the old age security project that will be included at the end; there will also be the Canada pension plan and employment insurance. Benefit programs for the most vulnerable will obviously be part of this project. So there are still a lot of factors to consider, and it is one of the systems that will be modernized the most among all governmental programs.

I also want to say that the total of OAS payments exceeds $80 billion a year. A huge number of cheques are sent to claimants, and we have to make sure that the systems are fully reliable since payments are made every month.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

In the response that the Standing Committee on Public Accounts just received to a study report, the government states that the Canada pension plan component is not included in the estimates on the benefits delivery modernization because spending authority is not yet available.

Along with what you just said, we understand that there is a third component that has not yet been budgeted for. Can you confirm that you have received a request to do so?

Have you estimated the amount that will have to be added to the $6.6 billion between now and 2030?

[Annie Boudreau]

To my knowledge, I have not yet received a request regarding the shortfall you just explained to us.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Would you be able to provide the committee with any submissions that were made by Employment and Social Development Canada to Treasury Board in order to increase the budget of the benefits delivery modernization program, as well as with any rationale explaining why the cost overruns were accepted by your department?

That could be provided in writing, but if you want to give us an answer now, we would also appreciate it.

[Annie Boudreau]

I will check the available information that was shared with us, and we will provide a written response to the committee.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

You can decide who will answer my next question. I will leave it up to you.

You mentioned the Canada emergency business account. Through the Canada emergency business account, you have close to $7.8 billion in arrears, at least $5.4 billion of which is for potential losses.

In addition, Export Development Canada does not wish to identify ineligible recipients. In other words, the losses may have been much greater. We are talking about taxpayer dollars.

Why does the Department of Finance not compel Export Development Canada to do this work?

Why are you asking Employment and Social Development Canada and the Canada Revenue Agency to recover money from ineligible recipients, but you are not asking the same from Export Development Canada?

[Evelyn Dancey, Assistant Deputy Minister, Economic, Fiscal and Intergovernmental Policy Branch, Department of Finance]

I think we will probably have to get back to you on that, because I am not responsible for those programs, nor is my deputy.

However, as I understand it, all the officials working on the programs are in the process of doing their follow-up, as is required under the program parameters and the applicable legislation. So we can provide you with the answer later.