Public Accounts Committee on April 13th, 2026

[The Chair, Conservative, John Williamson]

I'm afraid that is your time, Mr. Stevenson. We'll come back to you. There will be time later.

Ms. Sudds, welcome to public accounts. You have the floor for five minutes, please.

[Jenna Sudds, Liberal, Kanata, ON]

Thank you. It's a pleasure to be here.

As we've heard a bit about in the previous questions, there has been a commitment to grow the presence of the CAF in the Arctic and in the north, so two questions in my mind stem from this. First, can you outline what the plan looks like to ensure that there is the required housing in the Arctic and in the north to meet the growth? Second, I'm thinking about the impact of the increased presence in the north on local infrastructure and whether there is a plan to assist. Typically, it falls to municipalities, but is there a plan to ensure adequate local infrastructure investment?

[Christiane Fox]

Thank you for the question, Mr. Chair.

I would say there is going to be significant investment in our three territories as part of our emphasis on Arctic sovereignty and defence. The Prime Minister announced $32 billion, and this is very much about military capability. However, as for your point, we're spending a lot of time working with territorial governments, Inuit organizations, first nations and Métis to really outline the impacts, as you noted.

Some benefits of this increased investment, beyond the military capability, are that we're going to look at what the power and infrastructure needs are for defence, which can also benefit communities. What are the waste-water system upgrades that can support communities and the military? What can we do around broadband and connectivity?

It's going to be very important for us not only to have plans but also to sit down and talk it through, with leadership in the north, to help inform the decisions we're going to make. We've done a lot of engagement. We're going to continue to do more, especially as we get closer to some of the planning and some of the contracting, and then, within government, work together with the Major Projects Office, which will also be making some investments.

One challenge is that building infrastructure is complex. In the north, it's even harder—the skills and workforce availability—to achieve what we're trying to achieve. It is a real opportunity for the country, but in order for us to have success, we really need to be guided by those who live in the north.

[Jenna Sudds, Liberal, Kanata, ON]

Thank you very much for that. Indeed, it's such a massive opportunity for the north as we move forward.

They were mentioned briefly, but maybe we can expand upon some of the innovative new ways in which we are looking at rapidly building housing at scale. Is there a plan specifically for the north, perhaps entailing some modular...some other ways of ensuring that we meet these targets as quickly as we can?

[Christiane Fox]

Definitely, the answer is yes. Things are on the table in terms of.... We had a conversation with a team from the Nunavut government about some of the modular housing they're exploring for their communities and whether this would be an option for DND. We'll have to determine the specific housing allocations required. We'll have to look at what's happening with the other initiatives, such as Nunavut 3000, which is a commitment to building more homes in Nunavut. We'll have to sit down, but yes, we are open to different ways to build faster, and modular is one of those. Prefab is another.

[Jenna Sudds, Liberal, Kanata, ON]

I know its representatives are not here today, but is the Defence Construction Canada organization involved in these discussions?

[Peter Hammerschmidt, Assistant Deputy Minister, Infrastructure and Environment, Department of National Defence]

Yes, absolutely. Defence Construction Canada is a core partner for us. It's effectively our procurement arm. It issues construction contracts and manages those contracts to ensure that they're delivered on time and on schedule and that they meet standards. We are intimately integrated with DCC on all of our construction activity.

[Jenna Sudds, Liberal, Kanata, ON]

I don't recall who mentioned it—I apologize—but I'll switch gears slightly to the pilot program with Trenton. I believe I heard that mentioned. It makes incredible sense for the CAF to have the first right of refusal.

Can you speak to how this came to be and any progress to date leveraging it?

[Paola Zurro]

This was an idea the agency started to explore when we heard that the air force uses this for runways. It gets the first right of refusal to use runways. We thought it could be applicable to housing as well.

Given that our members sometimes have just one week to house-hunt, it is very hard. The houses are not necessarily available the week they come with their families to look for a house.

The concept evolved into having a first right of refusal, which means that we're working with landlords to make sure those houses are still available for Canadian Armed Forces members. In this sense, the agency is committing to keeping the houses for certain times of the year if the previous family has left and the next family is coming in a month or two from that time. We are committing to working with landlords. We will be responsible for vacant units to make sure those units stay available for Canadian Armed Forces members and their families.

We started small because it's a pilot. We initially had access to 10 units. In the contract, we have up to 75 that we can access. As units become vacant, landlords contact the agency and we confirm whether we would like more, depending on our wait-list.

[The Chair, Conservative, John Williamson]

Thank you. That is time.

We now go to Mr. Lemire, who is on Zoom, for two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Hammerschmidt, I'm going to re-ask my earlier question about the situation at the Valcartier base and the municipality of Shannon. I went over the interpretation from earlier, and I think a few things were off. The interpreter referred to a “real estate assessment”, but I was talking about property tax.

Sarah Perrault, the mayor, said last month that the base's property value assessment was 7% below what the city was expecting. Obviously, I'm talking about property tax.

How do you explain the difference, and how are you going to fix the problem? Municipalities rely heavily on that money to expand services around the municipality. How are you going to bridge the gap between their assessment and yours?

[Peter Hammerschmidt]

Thank you. That's an excellent question.

Of course, it's very important to determine the tax rate accurately. We work with Public Services and Procurement Canada on that process. Right now, we're planning how many housing units we're going to build. Once the process is under way, once we know exactly how many we're going to build and where they're going to go, we will work with Public Services and Procurement Canada and the city to determine the exact rate for the payment in lieu of taxes.

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

Does this situation affect other municipalities? Do you know whether other municipalities, in Quebec or elsewhere, are experiencing a disparity between the amount provided and the actual amount? Are these frictions common? Is this a way to save a few pennies on the backs of municipalities, which are already suffocating with all the new demands, particularly when it comes to housing construction?

We know that Build Canada Homes is supposed to be fantastic, but it doesn't bring sewers and infrastructure to municipalities. So it's a failure to begin with. Do you agree?

[Peter Hammerschmidt]

Yes, it's rare, but there are such cases in our municipality. However, our policy is to be a good neighbour. So we're not trying to reduce the payment in lieu of taxes, because we want to support municipalities and all the infrastructure that's needed to support us.

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

Perfect, thank you very much.

[The Chair, Conservative, John Williamson]

Thank you very much.

We'll go to the next member.

Mr. Bezan, you have the floor for five minutes.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Thank you.

Auditor General Hogan, in paragraph 62 of your report, you recommend that National Defence evaluate its policies on living accommodations and how they impact retention, especially for longer-serving members. In the response from National Defence on this recommendation, it said it is taking until December 2027 to come up with policies that will inform the development of housing stock.

Is this fast enough, considering the shortage and the urgency of retention that we have?

[Karen Hogan]

If I were a member waiting, I would tell you it is not fast enough.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

I appreciate that.

In the department's own report on the evaluation of Canadian Armed Forces retention, which talks about everything from doctors to day care and housing, it said that 9.4% of junior ranks are prepared to leave the forces. If the department is going to take two years to evaluate the policy, are we risking losing up to 20% of our members in the Canadian Armed Forces?

I'll ask the Auditor General if she wants to reflect on that, and then I'll ask the department and CAF to respond.

[Karen Hogan]

It's a difficult question for me to reflect on. I know that if updating a policy will take two years, then action won't happen until after then. I would hope it would happen simultaneously or much faster.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Would you like to respond, Lieutenant-General?

[LGen Erick Simoneau]

If I may, thank you.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

You are the chief of military personnel.

[LGen Erick Simoneau]

I would say that policy development is seldom done in isolation. It's always in parallel with concrete action, and that's why we do pilots. We refine policies and try them on the go, so this is what we're undertaking as we speak about the living accommodation policy—

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

If I may interject, I've had a lot of conversations across this country with base commanders and those serving in the armed forces, and the common theme is that they've it's fallen on deaf ears. We've known for a decade about this housing crisis, but the Liberal government hasn't been listening.

When we did the study on National Defence that we reported on in 2024, there had been fewer than 40 residential housing units built over the prior two years. We knew we had a crisis then; at that time, it was estimated that they were around 6,200 or 6,300 housing units short.

If it's not happening in isolation and we're doing it in parallel.... Forty houses won't cut the mustard.