Public Accounts Committee on March 23rd, 2026

[The Chair, Conservative, John Williamson]

I call this meeting to order.

Good morning, everyone.

This meeting is now in public.

Welcome to meeting number 28 of the House of Commons Standing Committee on Public Accounts.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room, and possibly remotely, using the Zoom application.

Pursuant to Standing Order 108(3)(g), the committee commenced consideration of the 2026 spring reports of the Auditor General of Canada, referred to the committee on Monday, March 23, 2026.

I would like to welcome our witnesses from the Office of the Auditor General for our first hour.

Karen Hogan, Auditor General of Canada, thank you for coming in today and being ready to answer questions on the report, with Andrew Hayes, deputy auditor general; Nathalie Chartrand, principal; Sami Hannoush, principal; Jean Goulet, principal; Normand Lanthier, principal; and Gabriel Lombardi, principal.

Bonjour. It's nice to see all of you.

Ms. Hogan, you have the floor for up to five minutes, but if you decide that your introduction needs to be longer, you have the time. Or if it's short, that works as well. We have a lot of questions for you.

The floor is yours.

[Karen Hogan, Auditor General of Canada, Office of the Auditor General]

Thank you.

It will be a bit more than five, but I will try to speak fast.

[The Chair, Conservative, John Williamson]

Take your time.

[Karen Hogan]

Thank you, Mr. Chair.

Good morning.

Thank you for the opportunity to speak to the committee today.

I would like to acknowledge that we are on the traditional unceded territory of the Algonquin Anishinabe people.

I am here today to discuss the findings of three audits that were tabled this morning in Parliament. These audits examine how well government organizations are managing important federal initiatives: the replacement of the government's pay system, reforms to the international student program and the RCMP's efforts to recruit police officers.

In addition, as is our usual practice, we have also provided Parliament with copies of our special examinations of the Atlantic Pilotage Authority and Via Rail, which were made public since our last tabling.

I will begin with our audit of the federal government's project to modernize its pay system.

We found that the Treasury Board Secretariat and Public Services and Procurement Canada managed the pay system modernization project in such a way as to ensure that federal public servants received accurate and timely pay.

The audit identified certain risks. Since the project is in its early stages, the secretariat and the department have the opportunity to take action to avoid them. However, I'm concerned about three components.

First, the progress made to simplify the pay rules was limited. As a result, the Dayforce system is being customized. This leads to an estimated additional cost of almost $4 million a year.

Second, more than 233,000 pay transactions remained outstanding. This creates a risk of transferring errors into the new system.

Lastly, the shortened three‑year timetable reduces the time available to clear the backlog and properly prepare departments for the transition. The government will need to keep a watchful eye and make quick decisions as this project moves forward.

Our second audit concluded that Immigration, Refugees and Citizenship Canada reduced the number of new study permits issued but fell short in other key areas.

In 2024 the department issued just under 150,000 permits, well below the forecast of 350,000. Some provinces, particularly those with smaller populations, were disproportionately affected. For example, Newfoundland and Labrador and Saskatchewan were both expected to see an increase of 10% in approved study permits compared to 2023, but instead experienced a decrease of at least 59%.

While the department introduced a tool to verify acceptance letters from learning institutions, it did not effectively investigate or follow up on high-risk cases. Over 153,000 potential cases of non-compliance with study permits were identified, but the department investigated only a small number.

It also did not pursue 800 cases involving fraud discovered after permits were approved. In most of these cases, individuals went on to apply for other immigration permits while in Canada, and more than half of them have since been approved.

Overall, the department needs to act on the information it has to address integrity concerns in the program.

In terms of Royal Canadian Mounted Police recruitment, the audit concluded that the RCMP failed to recruit enough police officers to meet its needs. The recruitment targets set by the RCMP fell short of the actual needs, and they weren't met. Significant delays in processing applications hampered recruitment. The RCMP missed its target processing time for 97% of the applications. As of September 2025, the RCMP needed at least 3,400 additional officers.

The shortages of front line officers were widespread across Canada, especially in contract and indigenous policing. Vacancy rates were critical in nine of the 11 provinces and territories served by the RCMP. A flexible posting plan attracted thousands of applicants, but exacerbated shortages in some regions. The RCMP must better determine its workforce needs and set targets to meet them.

Taken together, these three audits highlight the importance of careful planning and timely action to address risks. Without these elements, there can be delays and unintended impacts that stand in the way of positive outcomes for Canada.

We're pleased to answer any questions the committee may have.

[The Chair, Conservative, John Williamson]

Thank you very much.

We have time for two full rounds today. The first one will consist of three members with six minutes each and then another round of five members. That will take us to about noon or just a few minutes after.

I know you have a busy day, Auditor General, so we will endeavour to move this along quickly.

Ms. Kusie, you have the floor for six minutes, please.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Chair.

Again, thank you very much, Auditor General, for your excellent work.

The system you are referring to in the report today costs Canadians a minimum of $4.2 billion, yet your key finding indicates the need to simplify and standardize pay rules before introducing a new system. It was a core lesson learned from the transition to the Phoenix pay system, yet it's concerning to you, a decade later, that there was little progress made to simplify these rules, and that customizing the new pay system is costing taxpayers an additional $4 million a year. How could this have been avoided?

[Karen Hogan]

I think that's a great question to ask the Treasury Board Secretariat and Public Services and Procurement Canada.

When we came in here, we were just trying to see whether they had acted on lessons learned, and key areas are simplifying pay rules and standardizing pay processes. We did see one simplification agreed to with unions, but there is a lot of work left to be done. As a result, however, the mitigation measure is to customize Dayforce so that they can avoid pay errors in the future.

I think there need to be efforts by all parties involved to make sure that everyone is being paid accurately and on time. How they go about doing that, I'll leave to the central agencies and the unions. However, it's clear that, if you don't simplify, you need to, at least, customize to make sure pay is accurate.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Despite all of these customizations for $4 million a year, manual workarounds are still required. Why, despite $4 million a year for customizations, would manual workarounds still be necessary?

[Karen Hogan]

I think the Dayforce system is not just about replacing the Phoenix pay system, so it's not just the box that handles pay: It's also replacing HR management systems. There are about 30 different ones across the departments that are serviced by the Miramichi pay centre. This is more end to end, from onboarding to paying, so it isn't just about pay. There will always be processes before you get to the pay system, and it's about making sure that all of them have been standardized as well. While we saw some progress on standardization, no department is adopting that until they get on Dayforce, so it is too soon to know the impact it will have on treating pay.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

In fiscal year 2024-25, 29% of normal and acting payments had errors within them. Do you think 29% is an acceptable rate for a pay system and for this government?

[Karen Hogan]

I think every employee expects to be paid accurately and on time. The number that you raise is the figure that we identified during our financial audit work for the Government of Canada. We've seen over years, because we've been tracking that every year, that it ebbs and flows.

That's why it's important in my mind to make sure that you have simplified the payrolls, standardized processes and cleared up all of these pay errors before you move a department onto the new Dayforce system. If you bring a pay over with errors, it doesn't matter what system is processing it; there will be errors again.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Your report indicates that in 2023, Public Services and Procurement Canada set a target to eliminate all pay transactions that were one year or older by March 2026. Since then, the department's internal reports through September 2025 indicated it would not meet the target.

How can Canadians have confidence in a government that once again can't even meet its own targets?

[Karen Hogan]

As I just mentioned, this is one of the concerns and risks that we flagged with this project. It is clear that progress is being made on the backlog. We're seeing it decline, but what's concerning is the age of it. More than 50% of what's in there is more than two years old, and at least 16,000 pay action requests are more than six years old. It's those older ones that in my mind will be more complex to solve, the longer you go out. That will take more time. That's why we flagged a very big risk of shortening the timelines.

I would expect that Treasury Board Secretariat and Public Services and Procurement Canada are going to adjust their way forward, because you need time to make sure pay is accurate before you move it into the new system.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Was there any evidence at all that the government is considering the future implications of CER and the additional pressure it will put on this system?

[Karen Hogan]

That's one of the elements that I would call an emerging risk. There are risks right now that are known, and then there's obviously an emerging risk that the comprehensive expenditure review and early retirement incentives will all put pressure on pay and clearing out the backlog. This is one of those key elements I think needs to be factored in right now that will require a lot of diligence. It's not just identified risks but also emerging risks that need to be monitored and mitigated throughout a big project like this.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

In the report, you mentioned the corporation Goss Gilroy that was retained for work on the Phoenix project. Do you have any information as to how that company was retained?

[Karen Hogan]

I unfortunately do not know how Goss Gilroy was retained, but I did look at their report. Many of their findings, concerns and recommendations echo some that came from my office back in 2018 and some that we're flagging right now.

Whenever you have a big project like this, there's a risk that you'll prioritize timelines over functionality and costs. It's important to make sure that people are paid accurately, and that's why a key step is to clear out all of this backlog before transition happens. That's a risk I hope the government will monitor closely and adjust as needed so it can meet the accelerated time frame.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you.

[The Chair, Conservative, John Williamson]

Ms. Yip, you have the floor for six minutes, please.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Thank you, Ms. Hogan and your entire team, for the good and productive work of these spring reports. Your work is always very important to help us improve.

I'm going to be asking you some questions on the RCMP report.

Why did the RCMP fail to recruit enough police officers to meet operational needs?

[Karen Hogan]

The biggest reason would be the slowness with which they processed applications that they received. It isn't a shortage of interest in the RCMP; only 6% of the applications received over the 30 months of our audit led to an offer to go to basic training. In the case of about 40% of applications, individuals either withdrew their applications or stopped communicating with the RCMP, likely because of the length of time.

The RCMP has a service standard that says an application should be processed in 224 days, and we found that on average it was taking 330 days. Speeding that up will need to be an important step to increasing the number of recruits who can make it through.

The last point I would raise about this is that starting with knowing your needs is essential. Right now, the targets they have set for recruitment are based on how many people they could train, and that falls well short of their actual needs. We believe they need at least 3,400 police officers. They have to think about where their vacancies are and attrition; they have to factor all that in. They're setting a target, but it's just too low for what they need right now.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Was there anything that you felt they could do to speed up the application process?

[Karen Hogan]

It's a great question. Actually, I had a good conversation with the commissioner around how you adjust this. We identified a couple of areas that we thought might have been contributing to this, one being that a recruiting analyst picks up a file and moves it through the seven steps. Most of or half of those positions are sitting vacant right now, and that would be a contributing factor.

We also talked about how many of the steps are done one after the other, for the most part. There's an opportunity to do them concurrently, but also to do them in a different order, right? Identify where most are being eliminated from the process and see if you can move that up. For example, if the medical or physical exams and security clearances can be moved up, that could probably speed up the process. I think there are a lot of opportunities.

The commissioner has already spoken publicly, I think, about how he has hired a third party to help them work on this. Their goal is to reduce that timeline to six months. If you do that, as we mentioned in our report, make sure that you change the service standard by steps, so you can measure whether your efforts are being successful or not.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Six months is still a long time.

[Karen Hogan]

Well, I think that if you're looking for a job, waiting any amount of time is a long time, but 330 days is very long, so six months would be an improvement, for sure.