Public Accounts Committee on Sept. 25th, 2025

[The Chair, Conservative, John Williamson]

I call this meeting to order.

Welcome to meeting number six 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 here in person in the room, and I believe we have one member online using the Zoom application.

I'd like to remind members, as well as our witnesses, about the audio system. When you're not using your headset, place it down on the marker on your desk, keeping it away from the microphone at all times. Please do not touch the microphone. If you need to adjust it, it's best to turn off the microphone to avoid audio feedback.

Pursuant to Standing Order 108(3)(g), the committee is commencing consideration of report 3 of the Auditor General of Canada, entitled “Current and Future Use of Federal Office Space”, of the 2025 reports 1 to 4 of the Auditor General, referred to the committee on Tuesday, June 10, 2025.

I'd like to introduce our witnesses, some of whom have opening statements.

From the Canada Mortgage and Housing Corporation, we have Coleen Volk, president and chief executive officer. It's nice to see you today.

From the Department of Housing, Infrastructure and Communities, we have Paul Halucha, deputy minister; and Janet Goulding, senior assistant deputy minister, housing and homelessness branch. It's nice to have you in, as well.

From the Office of the Auditor General, we have Karen Hogan, the Auditor General of Canada. It's nice to see you again. Joining her are Nicolas Blouin, director; and Markirit Armutlu, principal. It's nice to see you as well.

We'll now turn to the opening statements.

Auditor General, you have five minutes to kick us off, please.

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

Mr. Chair, thank you for this opportunity to discuss our report on the current and future use of federal office space, which was tabled in the House of Commons on June 10.

I would like to acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinabe people.

Our audit looked at the federal government's efforts to rightsize its office space to minimize costs and free up underused properties for potential conversion into affordable housing. In 2017, Public Services and Procurement Canada, or PSPC, estimated that half of the government's office space was underused, and in 2019-20, the department started planning for a 50% reduction by 2034.

However, at the time of our audit, PSPC projected it would only be able to reduce the government's office space by 33% in that time frame. The department estimated that reducing the federal office portfolio would generate savings of about $3.9 billion over the next 10 years. We found, however, that PSPC had made little progress in reducing office space. Efforts to rightsize the portfolio achieved less than 2% reduction from 2019 to 2024, mainly because of a lack of funding and the reluctance of some departments to reduce their footprint.

We also found that PSPC lacked up-to-date, standardized and reliable information from federal tenants on the daily use of office space. Using information from all of its tenants would better enable the department to adjust its plans and maximize opportunities for future reductions.

We found that the Treasury Board of Canada Secretariat’s ability to lead and support departments and agencies in managing real property decreased significantly with the dissolution in 2024 of the Centre of Expertise for Real Property. The centre had been set up in 2021 to support the government in the management of its real property portfolio.

The Canada Mortgage and Housing Corporation, or CMHC, supported by Housing, Infrastructure and Communities Canada, is mandated to transform surplus federal office properties into affordable housing through the federal lands initiative. The audit found that while CMHC was on track to meet the initiative’s 2027-28 target to secure commitments to build 4,000 new housing units, the target was based only on commitments, and that only about 40% of units would be ready for occupancy by 2027–28.

Furthermore, we found that the criterion for affordability used by CMHC for the federal lands initiative was not based on household income. That meant that renters in the lowest-income ranges, whose affordable-housing needs were the greatest, did not fully benefit from the initiative.

Public Services and Procurement Canada and federal tenants need to accelerate their efforts to contribute to increasing stock for housing that is sustainable, accessible and affordable.

Mr. Chair, this concludes my opening statement. We would be pleased to answer any questions the committee may have.

[The Chair, Conservative, John Williamson]

Thank you very much, Ms. Hogan.

Ms. Volk, you have the floor for five minutes.

[Coleen Volk, President and Chief Executive Officer, Canada Mortgage and Housing Corporation]

Thank you.

Thank you for the invitation to discuss the Auditor General's report on the use of federal office space, particularly in relation to the federal lands initiative.

It's an honour to be here on the traditional unceded territory of the Algonquin Anishinabe people.

As you may know, in 2023, the responsibility for housing policy moved from CMHC to the department of Housing, Infrastructure and Communities Canada, or HICC. As a result, policy development for the federal lands initiative resides with HICC. The initiative continues to be administered by CMHC.

So, I’ll start by saying that CMHC and Housing, Infrastructure and Communities Canada appreciate the Office of the Auditor General’s attention and recommendations. With the Auditor General’s input in mind, CMHC and HICC are working together to improve the initiative—to maximize its benefits for Canadians with the greatest housing need.

The federal lands initiative, or FLI, is a $317-million fund that supports the transfer or leasing of federal lands and buildings to eligible proponents to be used for affordable housing. So far, it has supported the development of approximately 5,100 homes. That means, as mentioned in the Auditor General’s report, that the program is on track to meet its unit targets.

I could point to multiple examples of homes that have been built through this program. There’s one right up the road from here—the Mikinàk community, built on the former CFB Rockcliffe site. It was completed last year, and it offers 271 homes at different affordability levels. Mikinàk was built through the federal lands initiative and another national housing strategy program, the affordable housing fund, in partnership with the province and the City of Ottawa.

We continue to work with HICC to report FLI's results in the national housing strategy’s quarterly public progress report. Following the Auditor General’s recommendation, we will provide more clarity in the FLI results when reporting units committed, under development, built and repaired. We will collaborate to explore measures that ensure that projects support affordable housing in communities that need it. We’re not the only partners involved in the FLI program, so we will continue working closely with others—federal, provincial, territorial, indigenous and other partners—to attract proponents who will provide housing that serves the needs of all Canadians.

The federal lands initiative program is just one tool in the tool box—one part of the Government of Canada’s effort to increase the supply of homes and restore housing affordability.

As you know, the Government of Canada is launching a new entity, Build Canada Homes, to increase the supply of affordable housing. Meanwhile, CMHC will continue to deliver on its mandate to contribute to the well-being of the housing system. We will continue providing mortgage loan insurance, securitization, market-oriented supply programs such as the apartment construction loan program, and industry-leading research. We will complement the work of Build Canada Homes and the other federal agencies involved in housing. Together, we will work with partners in other governments and other sectors to make a better, stronger, more affordable housing system. We consider the Office of the Auditor General to be one of those partners.

Again, I thank you for the invitation today to talk about this report and the federal lands initiative program. I’m happy to answer any questions you have.

[The Chair, Conservative, John Williamson]

Thank you very much.

We begin with our first round of questions, which will consist of three members, with six minutes each.

Mr. Deltell, we'll begin with you this morning. You have the floor for six minutes.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

Thank you very much, Mr. Chair.

Good afternoon, colleagues.

Ladies and gentlemen, witnesses, welcome to your House of Commons, to your Canadian Parliament.

Ms. Volk, the Canada Mortgage and Housing Corporation, which you head, has a responsibility to insure as many housing units as possible for as many Canadians as possible and to govern responsibly. Can you tell us if your employees and executives received performance bonuses this year?

[Coleen Volk]

Thank you for the question. I will answer in English. I hope that's all right.

You asked a question about bonuses. I just want to make sure I'm answering the right question.

We have a system of pay that is known as pay at risk. We establish a compensation level for our employees, and we don't give it to them all at once. We give them a base salary, and we reserve part of it, which they get only upon completion of their objectives.

While the media likes to call that a bonus, to us it's actually part of our compensation philosophy. It's pay at risk.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

Is it true that 99% of Canada Mortgage and Housing Corporation executives received performance bonuses last year?

[Coleen Volk]

That may be the case, but I don't have those figures at the moment.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

Ms. Volk, 99% is not exactly a minority—nearly everyone received a performance bonus. A performance bonus is not a salary. A performance bonus is when you manage to achieve objectives that were quite difficult to attain. However, if 99% of executives achieved their objectives, it may be because the objectives are not properly established.

How can 99% of your executives receive a performance bonus?

[Coleen Volk]

As I mentioned, it is not a bonus; it is part of their compensation that is put at risk at the beginning of the year. If they don't achieve their specific objectives, they're not entitled to the full payment of that amount. I think the fact that most of our employees do attain their objectives is something that I would be proud of.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

Can you give us a specific example of one of your executives who truly achieved the goals that the public wants? The public expects those executives to accomplish things to make home ownership a reality for them. That's precisely your goal.

We're talking about 99% of your executives who received a performance bonus. Can you provide a specific example of one of your leaders whose goal was achieved in terms of housing accessibility today in Canada? You'd think the situation was fantastic, but it's just the opposite.

[Coleen Volk]

The payment of pay at risk is relative to.... Their objectives are established on the basis of what they can individually contribute to the corporation. Every individual will have a different set of objectives. It will relate to their role in the organization and how they can help the organization achieve its success.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

We're talking about $30.6 million in performance bonuses that were paid to your executives and employees. Do you think it's normal to bestow so much money in performance bonuses when we're currently experiencing the worst housing crisis since World War II?

[Coleen Volk]

It's the amount of money that we have set aside as pay at risk, to pay only if they achieve their objectives.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

The Royal Bank of Canada says that we are currently undergoing the hardest times when it comes to home ownership. Your organization's goal is to ensure that Canadians have access to home ownership. The banks are saying that we're in the worst situation since World War II. How can you give your employees performance bonuses when we're currently experiencing the worst crisis and the situation isn't changing despite the actions you've taken?

[Coleen Volk]

There is a housing crisis in Canada, and many partners are required to help resolve that housing crisis. Unfortunately, CMHC does not have the tools to solve that on our own. We have many partners. We have the federal government. We have the provincial governments and the municipalities. Many non-profits are involved.

It is not a situation that CMHC has the resources or the mandate to solve on its own.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

Isn't your mandate to make housing accessible for everyone? Is that not your mandate?

[Coleen Volk]

Our mandate is much broader than that. Our mandate is to help the system function appropriately and efficiently—

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

We have to admit that the system is not working. We're experiencing a terrible housing crisis in Canada right now, the worst one since World War II. Almost 70% of people who don't have access to home ownership have given up on that dream. It is your responsibility to help them.

How can you give 99% of your executives a performance bonus when 70% of the people who don't have a home—who don't have access to home ownership—have decided to give up on that dream? What do you have to say to those people who have given up on their dreams, when you're paying 99% of your executives $30 million in performance bonuses?

[Coleen Volk]

I agree with you completely that there's a housing crisis, that what is happening in the country is very sad, and that people can't afford the homes they need. I don't agree that it is CMHC's responsibility to solve that on our own, because we don't have the resources or the mandate to solve that on our own. We have a mandate to deliver programs on behalf of the government, which we do. We meet our service standards, and we fulfill our objectives and our mandate as defined by the Government of Canada.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

People are following our proceedings. When people pay taxes, they expect Crown corporations to serve them. In this instance, we see that senior executives served themselves to taxpayers' money.

[The Chair, Conservative, John Williamson]

Your time is up, Mr. Deltell.

Up next is Ms. Yip for six minutes, please.

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

Thank you, Chair.

It's good to see everybody back for the fall session and to look at a new report.

Ms. Hogan, you mentioned in your report that the Treasury Board “made good progress in implementing improvements in how real property is managed within the government.” Could you expand on that?

[Karen Hogan]

Treasury Board has a sort of dual role in this aspect. They set the return-to-office policies for the federal public service, so they have an ability to influence how many public servants are in federal office buildings. When it comes to housing and how they can afford.... They're the ones who free up, with PSPC, the buildings that can then move to the Canada lands initiative.

Back in 2019, I think, they did a comprehensive asset expenditure review. They were looking to rationalize what assets could be disposed of and be better utilized by the public service. That initiative resulted in 119 recommendations that are meant to be addressed in order to help improve how assets are used in the public service. However, when funding sunsetted for that initiative, the centre of expertise was dissolved. While they made a lot of progress and came up with some really good recommendations, it is now left to the departments and agencies that received those recommendations to put them in place.