Public Accounts Committee on Oct. 29th, 2026

[Karen Hogan]

We found that it was promoted well early on, before the program was actually launched, but there's always room for improvement. We have therefore encouraged the department to begin targeting segments of the population where enrolment rates are too low.

There are also gaps in access to the program. We found that about 60,000 children who are currently in the care of the provinces and territories should be accessing the program, but they aren't using it, because one of the criteria is to file a tax return. However, children don't file tax returns with the government.

Although there are about seven million people enrolled in the program, opportunities do still exist to improve access.

[Daniel Gobeil, Liberal, Chicoutimi—Le Fjord, QC]

Okay. I'll continue quickly.

The government actually announced measures just recently to simplify the eligibility criteria for applicants. New initiatives have been announced to improve access.

Do you think these measures are a step in the right direction to promote the program in communities where the needs are sometimes greater?

[Karen Hogan]

I haven't looked at the new announcements, but I can tell you that one thing we found is that dentists participating in the program would like to have better information. For example, when claims are denied, the reasons for the denied claims aren't communicated very clearly. This would help dentists explain more clearly to plan members why certain services are covered and others are not.

[The Chair, Conservative, John Williamson]

Thank you very much.

We'll now go to Mr. Blanchette‑Joncas, for six minutes.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Mitis—Matapédia—Les Basques, QC]

Thank you, Mr. Chair.

My first question is for you, Ms. Hogan. Thank you for presenting the various audits today. Greetings to all the members of your team here with you today.

I would like to discuss the issues surrounding the national emergency strategic stockpile, and specifically the pharmaceuticals that were lost. In January 2025, the value of the pharmaceuticals that had to be thrown out totalled $20.4 million. However, that is not a new problem. Problems had been reported in 2022 and 2023.

I'm wondering if you can explain how it's possible that Canada has the luxury of throwing away $20 million worth of pharmaceuticals.

[Karen Hogan]

Your question really highlights one of the concerns I've raised in several of the audits presented today. Some of the gaps are known, but the departments aren't addressing them.

In this instance, inspections were carried out at the warehouses where pharmaceuticals are stored. Shortcomings were identified, but they weren't addressed. What happened was that some pharmaceuticals had to be discarded in 2024 because the freezers had too many pharmaceuticals in them, and the temperature monitoring system had failed, while no alarms went off. The pharmaceuticals were no longer usable. They were discarded because they could no longer be used. However, this situation could have been avoided if the shortcomings had been addressed beforehand.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Mitis—Matapédia—Les Basques, QC]

As you mentioned in your audit, these problems already existed, particularly in the years I mentioned, 2022 and 2023. Corrective measures needed to be put in place to make sure that pharmaceuticals wouldn't be lost and all that money wouldn't be wasted.

Who was responsible for ensuring that corrective measures were put in place?

[Karen Hogan]

Ultimately, it's the Public Health Agency of Canada that manages the national emergency strategic stockpile, so that's its responsibility. We found that it had conducted inspections of warehouses, but it had not followed up to ensure that the deficiencies had actually been corrected.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Mitis—Matapédia—Les Basques, QC]

Okay.

I want to come back to the mismanagement of the Public Health Agency of Canada and Health Canada, for that matter. Your report mentions that nearly 25% of the value of this stockpile for 2025-26 has been lost. That's $331 million worth of supplies that have been thrown away because of an inability to manage the drug stockpile. It's a mess.

How is it possible to lose a quarter of our stockpile owing to problems that have already been known for over three years?

[Karen Hogan]

You're really bringing up one of our most important findings: There is no strategy for managing excess or expired inventory.

In this case, it was mostly supplies, such as masks, that were in excess. During the pandemic, contracts were signed and the government made commitments, and it continued to purchase masks. However, masks have a limited shelf life, and there is no strategy for donating them to hospitals or sharing them with other levels of government.

To me, this is really a fundamental aspect of inventory management; a strategy is needed to manage excess inventory and track the shelf life of supplies to avoid having to write off costs.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Mitis—Matapédia—Les Basques, QC]

Do you know if masks continue to be purchased, even though they're no longer needed?

[Karen Hogan]

Masks will always be needed in the national emergency strategic stockpile. That's why it's necessary to carefully analyze the needs and assess the gap between those needs and what the Public Health Agency of Canada has in its inventory. The necessary supplies need to be secured to ensure that the stockpile has the required supplies in the event of a future health crisis.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Mitis—Matapédia—Les Basques, QC]

I'd like to discuss another case of mismanagement that you highlight in your report—the call centre contracts.

There was $16 million allocated to implement a new system in call centres. I'll give you a concrete example. In 2020, implementing the system in just eight call centres cost $52 million. The government had budgeted $16 million, but it cost $52 million. That's three times the initial budget.

How can the government explain that? According to your analysis, $16 million was budgeted, but three times as much was spent.

Moreover, what you're telling me—and what makes me even more cynical about this situation—is that it had already been mentioned that there would be cost overruns, but no one in the department listened to that.

[Karen Hogan]

There are a number of problems here regarding procurement and contract management. As for cost overruns, I think the people at the department didn't really understand the complexity of implementing the system. That's why fewer call centres are using the system.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Mitis—Matapédia—Les Basques, QC]

Who do you think is responsible for that? How does the government manage to spend three times the planned budget when it's clear that warnings and corrective measures aren't being taken into account?

[Karen Hogan]

Shared Services Canada was actually responsible for managing the call centre contracts. However, a number of departments and agencies use these services, including the Canada Revenue Agency and Employment and Social Development Canada.

That's one of the complexities of IT projects. When many departments are involved, roles and responsibilities must be very clear so that everyone can understand the best way to manage contracts and reduce cost overruns.

[The Chair, Conservative, John Williamson]

Thank you very much.

We're beginning our second round.

Mr. Lawrence, you have the floor for five minutes, please.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

Thank you, Mr. Chair.

My questions will be regarding the thermal coal report, specifically around the accelerating coal transition investment program.

How much has the Liberal government spent on or contributed to the accelerating coal transition investment program?

[Andrew Hayes, Deputy Auditor General, Office of the Auditor General]

Thank you.

The contribution that Canada has made to that program is a little over $1 billion.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

I believe that there are three other countries contributing, but what is the percentage Canada has contributed of the total?

[Andrew Hayes]

It's approximately 42% that Canada has contributed overall in terms of that program.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

What's the total amount contributed globally to the program?

[Andrew Hayes]

I believe it's $1.67 billion.

I'm just looking to my colleague for that. Yes, that's correct.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

Of that $1.67 billion, how much of that has been deployed?

[Andrew Hayes]

It's about $18.4 million that has been operationalized for projects that have been under way. Obviously, other amounts have been earmarked for projects, but those projects haven't proceeded. The ones that have proceeded represent about 1% of Canada's contribution.