OGGO Committee Meeting
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Standing Committee on Government Operations and Estimates
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EVIDENCE
Tuesday, September 23, 2025
[Recorded by Electronic Apparatus]
[English]
I call the meeting to order.
Good morning, everyone. Welcome to meeting three of the House of Commons Standing Committee on Government Operations and Estimates, also known, as the Auditor General calls it, “the mighty OGGO”.
Before we continue, just as a gentle reminder, everyone, keep your headphones away from your microphones at all times so we can protect the hearing of our very valued interpreters.
Pursuant to Standing Order 108(3)(c), the committee is holding a briefing session with the Auditor General and her team on three reports she tabled, in June 2025, on jet fighter capacity, the use of federal office space, and contracts with GC Strategies.
We now welcome back to OGGO AG Hogan.
Traditionally, we do five minutes, but because there are three reports, feel free to go past the five minutes if you need them.
The floor is yours.
Thank you. I'll try to be succinct.
Good morning, Mr. Chair. Thank you for the opportunity to appear before the committee today to discuss some of our recent reports that were tabled in Parliament on June 10.
I would like to begin by acknowledging that we are gathered on the traditional unceded territory of the Algonquin Anishinabe people.
With me today are Andrew Hayes, deputy auditor general, and Nicholas Swales, Markirit Armutlu and Sami Hannoush, the principals who are responsible for the three audits.
First, our audit of Canada's future fighter jet capability examined the large multi-year project aimed at maintaining a strong fighter jet capability to protect the safety and security of Canadians. We found several risks that could jeopardize the timely introduction of the new CF-35 jets. Estimated costs for the future fighter capability project reached $27.7 billion in 2024, which is almost 50% more than National Defence's original $19 billion estimate, a figure that was based on outdated information.
In addition, estimates did not include key elements, such as infrastructure upgrades and advanced weapons, which would add at least $5.5 billion to the total estimate.
[Translation]
Other significant risks include the possibility of a shortage of qualified CF‑35 pilots and a delay of more than three years in the construction of two new fighter squadron facilities. This will require additional costs to build temporary facilities. Active and ongoing risk and cost management is essential to ensure that the CF‑35 fleet is brought into service on schedule.
Let's now turn to our audit of federal office space. As part of this audit, we examined the government's efforts to reduce its office space portfolio to the ideal size in order to lower costs and leverage underutilized space that could be converted to affordable housing. In 2017, Public Services and Procurement Canada estimated that half of federal office space was underutilized.
We found that the department had made little progress in its multi-year effort to reduce office space by 50% by 2034. In particular, efforts between 2019 and 2024 resulted in a reduction of less than 2%, mainly due to a lack of funding. The department estimates that reducing federal office space will result in savings of approximately $3.9 billion over the next 10 years.
[English]
The Canada Mortgage and Housing Corporation, or CMHC, supported by Housing, Infrastructure and Communities Canada, is tasked with converting surplus federal office properties into affordable housing through the federal lands initiative. The audit found that CMHC is on track to meet the initiative's 2027-28 target of securing commitments to build 4,000 new housing units. However, the target is based only on commitments, and only 49% will be ready for occupancy by 2027-28. Public Services and Procurement Canada and federal tenants must accelerate efforts to help increase stock for housing that is sustainable, accessible and affordable.
Our last audit examined 106 contracts awarded to GC Strategies Incorporated by 31 federal organizations from April 2015 to March 2024. We found these organizations frequently disregarded government procurement rules meant to ensure fairness, transparency and value for Canadians.
[Translation]
In 21% of the contracts we reviewed, organizations did not have documentation showing that they had confirmed the security clearances of the individuals performing the work. We also found that organizations often did not monitor the work performed by individuals working under contract. Organizations did not have documentation showing what work had been performed, who had performed it, or whether those individuals had the required experience and qualifications.
These findings echo those of previous audits, which also identified deficiencies in how public servants applied federal procurement rules.
Our report does not contain any recommendations because I do not believe that the federal government needs even more procurement rules. The existing rules must be understood and followed.
Mr. Chair, this concludes my opening statement. We are happy to answer any questions from committee members.
[English]
Thank you very much, Ms. Hogan.
Welcome to you and your staff who have joined you in helping us understand the reports that you've tabled. We're talking about fighter jets, we're talking about service contracts and we're talking about federal office space, so there's a wide range of topics that we're covering today.
Getting right to it, your ”Report 3: Current and Future Use of Federal Office Space” says that the Treasury Board plays “a key role” in providing co-operation across government. What, if any, rationale was given for why the Centre of Expertise for Real Property, which was created in 2021, was dissolved only three years later?
The Treasury Board Secretariat actually plays many roles when it comes to federal office space. As the employer, they do set the tone for in-office presence. That is a key element to understand when you look at how federal office space is being used and how much is needed.
When it comes to the Centre of Expertise for Real Property, that was put in place to look at a horizontal review of all the fixed assets of the government. It issued 119 recommendations, and we did find that it was dissolved in March 2024. We were told that was because of a lack of funding and that now the responsibility rests with the organizations that had received the recommendations to ensure that the recommendations had been implemented. However, we found that only 21 of the 119 had been implemented by the time the centre was dissolved.
I am concerned that some of those recommendations may be forgotten, but it really now rests with all of the departments that received them to act on them.
Thank you.
According to your report, with this dissolution, the government-wide oversight for implementing recommendations on the government's conversion of the federal lands initiative disappeared, leaving 82% of recommendations not implemented, as you've just pointed out.
Based on your report, had the government kept in place its oversight, do you believe there would have been more progress in their efforts to create affordable housing?
I'm not sure that one element of oversight is the thing that would have kept this on track or increased the pace of it. We found in the report that the larger departments that occupy a lot of federal space had not yet signed on for space reduction agreements. They cited to us a lack of clarity around the return-to-office mandate: Would there be an increased presence needed or not, in terms of the space needed to deliver on their mandate?
There are many elements. While oversight is always a good mechanism to ensure that people stay focused on recommendations and the endgame, I don't think I would say it's the only reason that there's been a lack of progress.
Based on your audit, how much would it have cost to keep the oversight program running? I believe they were given $5 million in 2021. How much would it have cost to keep the oversight program running, compared with the cost of delays since its dissolution?
I'm not sure I could give you a number. The funding that was received was funding done over three years, and it was meant to do the heavy legwork of doing the whole fixed asset review and then coming up with the recommendation. It would stand to reason that you would need fewer people to continue with oversight. I think the question of what would have been needed to maintain a more consistent level of oversight would be better asked of the Treasury Board.
Did the government provide any rationale for why it did not implement the recommendations on its own?
No, I don't think there was one reason. There are 119 recommendations, and it stands to reason that some of them have long lead times.
When you're looking at disposing of underutilized buildings, it's not as though there was a building sitting vacant. They had to figure out which was the best building to be in and consolidate departments and agencies into a building, which meant they had to retrofit or renovate those buildings.
Some of these recommendations have very long tails, so I'm not sure that there would be just one reason that oversight was no longer there.
According to the CMHC, the federal lands initiative gives discounts on the government property purchase based on “the level of social outcomes”.
Did your audit reveal what kinds of discounts federal land is being sold at? If so, what were they?
We didn't look at what the property was sold for. That wasn't really the focus. Our focus was more on whether the properties were being freed up in locations with the greatest needs for housing. We found that this wasn't always the case. Buildings were being freed up in places where there wasn't the greatest need in a community. That really comes down to Public Services and Procurement Canada having the information to know which buildings it wants to target and then how it moves federal tenants out of them.
I think our biggest concern was around affordability, meaning the endgame, the outcome. What we found is that the homes being built were really not affordable enough for those most in need.
Thank you, Chair.
Thank you for the presentation. It's greatly appreciated. There's a very wide breadth of reports in front of us for sure.
I'm going to focus on the fighter jets, if you don't mind.
In one of the reports I read, you mentioned the need for training personnel. I think pilots were obviously one of them, but it's personnel more broadly.
Now that the government has committed to increase defence spending to 5% of GDP by 2030, do you have any thoughts on how best to deploy that increase in capital to meet the objectives that you laid out around personnel? That's part one of the question.
Part two is this: Are there any best practices from some of our partners within the program in terms of what they're doing to deploy capital to meet the operational objectives while being as cost-effective as possible?
I'm sorry for the two-part question. I guess I could have broken it up.
That's okay. I wrote them down.
That's a big question, and I'm not sure that we tackled all of that in the fighter jets report. We did look at whether or not there were enough trained pilots, because a concern that my office found in 2018 when we did work on the CF-18s was that there was a shortage of trained pilots.
The finding here, while very similar, highlights that the training program anticipates that it won't have enough qualified pilots. It's a little different here, because you're going to need pilots who can fly both types of aircraft, and then you need to upskill. I know that National Defence is looking at how to adjust that plan, and it's going to need to.
When it comes to my thoughts on where to invest and not invest, and best practices on training, I'm not the one to tell the government where to spend its money. I'm the one who comes in and says, “You made that decision. How did you do in spending it?”
What I can tell you is that in October we will be releasing a report on training and recruitment of new members to the Canadian Armed Forces. That will speak to some of the concerns that we found there.
There is no shortage of places where National Defence can invest this funding. It's about finding the right place and making sure that you always have the personnel to support that sort of investment. Here you need not only trained pilots, but technicians to maintain the planes and individuals to work on the bases.
There's no shortage of places for DND to invest in.
That's for sure.
Where I was going with the best practices piece is that there are some examples of our defence partners on this project who have already deployed capital, have deployed resources and have bodies in place. There might be some best practices there.
What I would add to that is that Canada is part of the joint strike fighter program office, and in that office, we benefit from what other countries are doing. That office does set minimum standards for the facilities and the training expectations. Canada is benefiting from the best practices of its allies in that program already, but they need to stay focused on it.
One of our findings was really about costing. That program had issued updated costing, yet Canada hadn't been using it in its estimates. Not losing sight of the fact that there is some intel there that we could use would be a good step forward.
I don't know if you're going to have the full time. Maybe on the way back, Mr. Chair, you can follow up. I don't want to completely geek out, but to the eight people who are watching on TV, I hate to put you to sleep, so I apologize in advance.
I have questions on the methodologies and research you used when coming up with this specific report. What information and data do your office and team researchers rely on? I'm sure it can't be necessarily easy when you're not dealing with fully open-source information, so I'm just curious.
We have access to a broad range of information that is at times protected and that we can't talk about. I always love talking about audit, so if you really want to geek out on audit, I would encourage you to go to the back of our audit reports, where we have an “about the audit” section. It does list for you our audit criteria.
We follow Canadian auditing standards, which means we have to gather sufficient and appropriate audit evidence. What that might look like will depend on the topic we're auditing, but the expectations that we hold the department to are listed in the back. They're agreed to with the department, and then we look to their information, the databases they may have and the contracts they may have. We will go to other countries to look for examples and other sources. We always try to have criteria that are outside of the federal government to be able to identify gaps and talk about best practices when we can.
It's a little more complicated in the defence space, given that a lot of it is protected, but rest assured that we've seen the information we need to see. It's rigorous enough that you can follow up. You can rely on it.
I might just add that we do get access to Treasury Board and cabinet documents, so we see the internal analyses that are performed for decision-makers to have the best information possible to make decisions. It is much more than open source. We get pretty much broad access to almost everything. There are very, very small limitations to the information that we can see.
[Translation]
Thank you, Mr. Chair.
Ms. Hogan, thank you for your time today. Your contribution to this committee is invaluable. I'm brand new to this committee, but I'm looking forward to getting your next report on recruitment and training in October.
Something struck me when I read your report. I get the sense the government is flying by the seat of its pants. How can it be that departments such as Public Services and Procurement Canada and National Defence lack so much hard data? That's been my first unpleasant surprise since joining this committee. It's quite frustrating.
How can they not know how many federal public servants they need offices for? How are they going to get those numbers? I'd like you to comment on that.
You're right. We've found that there's not enough data to support informed decisions. There is some data, but it isn't being gathered in a consistent fashion across government. From what we could tell, each department is responsible for figuring out how to monitor its employees' in-office attendance.
We identified the methods used and recommended that the government implement a standardized method to ensure that the whole public service is gathering this data the same way. Once that's done, we'll know how public servants are using office space and decisions can be made about which properties to dispose of.
To sum up, we lack that basic data. There has been progress, but I think a single whole-of-government approach is needed.
Mr. Chair, I'd like to ask the Auditor General about the real estate portfolio. It shrank from 6 million square metres in 2019 to 5.9 million square metres in 2024.
Seriously, how is it possible that so little was done in five years?
We asked that same question. In 2017, the government realized that federal properties were underutilized. In 2019, it decided to cut the amount of office space in half by 2034, but no funding was allocated to that effort between 2019 and 2024.
The 2024 budget allocated money to Public Services and Procurement Canada and Treasury Board to do the work, so I was hoping to see much more progress. The government can make announcements and set targets, but without funding and staff to get it done, very little progress will be made. That's what we're seeing here.
According to your report, Public Services and Procurement Canada doesn't know how many public servants are using office space, so it must be hard to manage a portfolio when there's a housing crisis.
I can see the connection to the data. There may have to be a cultural shift to standardize the rules so you can do your work, but, at the same time, when the government makes announcements, it has to walk the talk.
I'd like to talk about F‑35s now. In 2011, when I was the political attaché for the office of the member for Laurentides—Labelle, those jets were a big election issue. That was 14 years ago, and there have been many ministers of defence under Harper, Trudeau and Carney. However, you've told us that the Bagotville and Cold Lake bases are three years behind schedule in building the infrastructure needed to house—just house—fighter jets that cost billions of dollars.
I think being that far behind schedule is hard to fathom.
At what point should we start worrying?
I think it's important to note that National Defence had the right idea. The department decided it would have to upgrade the Bagotville buildings before Canada chose which fighter jet to replace the CF‑18s with, but it didn't have all the details. Once the decision was made to acquire F‑35s, National Defence got a lot more information. Once it realized everything it would need in the buildings, it started falling behind schedule.
There have been efforts to mitigate that, though. There are temporary buildings, but that leads to higher costs. There was a lack of planning and inadequate risk management. We found that risk management was more reactive than proactive. I think this is an example of how the department tried to do the right thing, but, because of reactive risk management, it now finds itself having to use temporary buildings.
[English]
Thank you very much, Mr. Chair. Thank you very much, everyone, for being here today.
When it comes to the staffing and training, only 14 of the 47 positions have been filled as of 2024. Why is that?
I think the point we're making is that implementation has been slow. Part of the reason is that some of the plans had not been fully laid out, so implementation hasn't been advancing at the pace that the plan originally envisaged. That's the main issue in those particular spheres where there were supposed to be a number of positions already filled.
If the plan has not been fully implemented, why has it not?
In the report, I know that you talk about a lack of information back in 2022, but what did you find when you audited this that would have prevented them from getting there? The F-35 has been around for more than 20 years, so how did they not have complete information, and why is a lack of information part of what we're seeing as their reason for not being far enough advanced?
I'll see if Nick does want to add something, but I think your question is bringing in a whole bunch of our findings.
There was information that they didn't use. They used outdated information, which is part of the reason they're a little late. We found that there were a lot of plans that were incomplete, and there was slow progress.
I hope that our audit in October on recruitment might shed some light on progress and weaknesses in recruiting, but logistics and security positions are some of the areas they need to plan to recruit for. I think there's a lot to figure out here in why they've been making slow progress.
I don't know if you want to add at all, Nick.
I want to jump in right there.
In your report, you say there are 246 permanent positions required. In the report, there are 10 bases that are on the map. I know most of the report is based on Bagotville and Cold Lake. It seems to me that 246 permanent staff for those 10 bases would be a massive understaffing of what would be required for the F-35 program. I'm not an expert, but are the 246 positions just for the first two bases, or is that for all 10 bases? What is that for?
Mr. Chair, perhaps I can help to explain that.
One of the observations we make is that the process of implementing the F-35 transition is in its early stages, and the plans haven't been fully drafted. This was one area where there was a plan that had laid out how many positions they actually needed in specific areas. We specify that it was for mission planning and some types of logistics and security. That is not the entire need for the F-35 program on all those bases. That was simply those areas where they had actually identified a number of positions by a certain time period, and only a small number of those had so far been filled.
For the rest, there wasn't that level of detail in the plans yet.
Why is that level of detail not in the plans yet? I guess that's kind of what I'm trying to get at here. This has been ongoing for years, yet we still have an incomplete plan. Why is that? Who's responsible for this? Do you have a name for who hasn't completed the planning for this? It is kind of crazy that we don't have a complete plan yet.
Mr. Chair, I think I would send the member to exhibit 2.2. We outlined the five phases of transitioning from the CF-18s to the CF-35s, and they're still in phase 1. The buildup phase is coming. This is National Defence's plan.
Ultimately, who is responsible? The chief of the defence staff and the deputy minister are, ultimately. Making sure that Canada's fighter jet capability is available and can transition is their ultimate responsibility. I think those are the questions that should go to National Defence—questions about progress, about the gaps in their plans and about how they plan on updating them.
We did give them a recommendation about making sure that their master plan was much more comprehensive.
[Translation]
Good morning, Ms. Hogan.
[English]
Mr. Chair, is it for five minutes or six?
The Chair: You have five minutes.
Pauline Rochefort: Thank you.
Thank you for highlighting the fact that Public Services and Procurement Canada was provided funding in 2024-25. Basically, if I understand correctly from your report, there's a first tranche of 37 tenants, representing 90% of the office space, who were asked to begin reducing their office space in June 2024, so that's just about a year. Of those, you said that 15 of them had not yet signed an office space reduction agreement and that negotiations were still ongoing at the time of the audit.
Is that normal? How would you characterize the fact that not all of the 37 tenants representing such a major component of the office space had not yet signed an agreement? Could you share the names of those tenants?
I don't know the names of all 15. We would have to look into our files and see if we could get back to the committee.
I do believe that you could ask Public Services and Procurement Canada. That is the best way to get the most accurate information. Ours was from the point in time when we did the audit, which was several months ago, and I would hope that there would be progress. My advice would be to get that information from them.
Why had 15 out of the 37 not yet signed agreements? We heard a few things. One, as I mentioned earlier, was about the uncertainty around the return-to-office mandate and whether they would need more space than what they anticipated they could occupy. Some said that the space was needed to properly deliver on their mandate.
Another would be perhaps the lack of a financial incentive. Many federal organizations do not pay rent. We occupy space that Public Services and Procurement Canada has; for example, my office doesn't pay rent. It then becomes the will of the deputy minister to put up their hand. I have, and I have offered to reduce the space in Ottawa by almost 50%, even though I don't have a financial incentive. That might also be part of the reason that certain departments are not putting this on their priority list.
It's uncertainty, and there are really so many things to focus efforts on. This isn't something that's costing you something, but it is costing the bigger, broader federal government. I think every department should look at how they can contribute to meeting this goal.
They were all factors of varying degrees. It depends on the department. For example, some might have had dedicated individual office spaces for each employee, so the resistance to change there would have been much greater than if they were already in an environment where they were hotelling and they would just reserve a spot and sit there. It's a big transition for many public servants as well. There are many factors that play into why progress is slow.
You also, as part of your audit, did a survey yourself. Is that correct? Not all tenants responded. Is that a surprise? Normally, with this form of survey, do they all—
I have to admit that I was impressed with the response rate. Getting an over 80% response rate on a survey is considered extraordinary and is actually a really good result.
Those were their thoughts and views, and that's why we felt confident enough to put them in our audit report. It wasn't like a handful had reported; the majority really had given us their views.
[Translation]
Mr. Chair, I'd like to use my two and a half minutes to ask the Auditor General a question.
I read in your report that Public Services and Procurement Canada did not release the information you said you needed. That worries me. I'm worried things will stagnate, the House will just rubber-stamp things and we'll sacrifice more and more transparency in all the legislative work we do in favour of doing things as quickly as possible and reacting to economic conditions.
Have you observed such a trend in your work with the government, or does this reflect what MPs are experiencing these days?
That's a big question.
In many cases, departments are reluctant to release information they haven't yet examined because they don't want surprises.
Our audit of current and future use of federal office space found that some data should have been made public. That would really have been more in line with best practices.
We talked about Australia's practices with respect to data about office occupancy and the fact that, in my opinion, if Canada followed such practices, that would help deputy ministers decide whether to dispose of certain premises. That's what we were getting at.
Overall, I believe some data should sometimes be made public. That's why we identified that data in our reports to ensure good conversations happen and the information needed to support good decision-making is made public.
Overall, I get very concerned when I hear about the government being reactive rather than proactive. I'm an entrepreneur, and if I operated that way, my businesses would fail. This is worrisome.
Risk management has to use both approaches, but I expect to see more proactive mitigation measures, with reactive measures as needed, not the other way around.
[English]
Thank you so much for coming. Thank you for the reports you've done.
I'm hoping to focus on the current and future use of office space. I'm trying to better understand how the affordable housing programs work, because when I talk to families in my constituency, I find that they don't really care about the big announcements in Ottawa; they care about whether they can actually pay the rent and get an affordable roof over their heads.
I noticed in the report that Ottawa uses the term “affordable housing” to mean 80% of today's sky-high market rent, and StatsCan says that it should be no more than 30% of a family's income. Those two radically different definitions seem to me to be a bit of a problem. Would you agree that this difference in definitions is a big part of the problem and exactly why the lowest-income families, the ones we need to help the most, are still being left out in the cold?
On the concern around the measure used for affordable housing, it's not the first time that I've raised this concern. I did an audit on chronic homelessness and identified.... As you say, Statistics Canada bases affordable housing on rent, but so does the national housing strategy.
Canada's national housing strategy says that this is the benchmark: You shouldn't spend more than 30% of pre-tax household income on your housing needs. However, the Canada Mortgage and Housing Corporation, which delivers many of these programs, uses a different one. They do base it, in this program and in a few others, on 80% of median market rent. At a time when rent is increasing because of the shortage of housing, we end up with rental properties that are not meeting the needs of those who need them the most.
In this case, there was that definition, but there's also the fact that the buildings that were being released to be used in the federal lands initiative were not in cities with the greatest need, so there were two things at play here that we think could increase access to affordable housing.
Does it make sense to you that the new $13-billion Build Canada Homes program is using the exact same flawed affordability definition as was used in the federal lands initiative? If the smaller program failed to deliver real affordability, why should Canadians expect that this much bigger program won't just fail on a much bigger scale?
I'm sorry. I can't really talk about that program. What I would expect a housing program to look at would be affordability and accessibility, and also sustainability. There's a trade-off among them. Not every home can meet all of those criteria.
I would also like to see homes built along the spectrum of houses, not just rental properties. There are other types of housing along the housing spectrum that I would expect a housing program to consider in terms of the costs and benefits in where you invest in a given year.
I thought that maybe we could just talk about Canadians who are currently struggling to make ends meet, such as the store manager at a grocery chain. Maybe they're earning about $50,000 a year. Under Ottawa's definition, their affordable rent in Vancouver could still be $2,500 a month. That's over half of their paycheque. How would a single mom working full time make that work?
While I love math, I'm not the one who can help someone manage their day-to-day budget. I think it's important to note that the national housing strategy does call for affordability to be based on household income, and that the Canada Mortgage and Housing Corporation is using a different definition. In both of the reports I mentioned—the chronic homelessness one and this one—we have given a recommendation to the Canada Mortgage and Housing Corporation to relook at that, and I would expect that they would align with what's in the national housing strategy at some point.
When government calls these units “affordable”, isn't it true that most of the vulnerable families in our communities—single parents, one-income families—still won't be able to afford them?
I would state that they are more affordable in that they're less than market rent, but they aren't meeting those with the greatest needs. Something a government should be concerned about is helping those who are furthest behind and moving them forward first. That's why I would expect that when you determine affordability, some of the houses would be based on income threshold.
I actually had one more example, because I want Canadians to understand what this really means.
Let's say there's a single-income family, with a dad working as a long-term care worker, which is also 50,000 bucks a year, and he's paying $2,500 in rent. That basically leaves him $1,700 to cover gas, groceries, heat and clothes for the kids. The rent that they're paying is not actually affordable.
Would you agree?
Again, I would point to Statistics Canada and the national housing strategy's definition that affordability, when it comes to housing, should be based on pre-tax income and should consider all the other things that a household has to spend on.
Thank you, Chair, and thank you to the AG for appearing before committee.
Ma'am, you talked about challenges regarding the CF-35 program, including a lack of integrated planning and coordination, insufficient infrastructure readiness, and gaps in workforce and recruiting. We know that having a modern, agile and effective fighter jet fleet is key to Canada's defence of its airspace and of North American airspace.
As we make the strategic investment away from the existing CF-18 fighter jets to a new fleet, what factors must be taken into account to reduce operational capability gaps and reliance on our partners?
I'm going to see if Nick will want to jump in on that. That's a bigger, broader question about having the military ready. This audit was really focused in on the transition between the CF-18s and the CF-35s.
I think we identified the need to make sure that estimates and costing use the most up-to-date information and that it's recognized that those need to be evergreen. Things keep going....
For many of the cost increases here, some are within control of the Department of National Defence and some are outside the control of the Department of National Defence, such as inflation, the global demand for munitions and foreign exchange. When a decision is made, those all have to be factored in up front.
However, it's not just about having equipment and infrastructure. It's making sure that you have the personnel to man them. We can have all 88 CF-35s, but we need trained pilots and we need trained technicians to maintain them so that in the long term we can have a strong fighter jet capability for the country.
National Defence has a lot of balls to manage. I think your question is best asked of them on how they plan to do that going forward.
Could you talk about the costing controls that are within the department's control? You said some are outside its control and some are within its control. What's within its control?
When it originally announced that Canada was moving to CF-35s, the estimate was that the project would cost $19 billion. In my view, what is in the control of the department is that this information was based on outdated information. There were already up-to-date cost estimates for what a fighter jet would cost. They hadn't been factored in.
They also didn't include in that project all of the elements needed to make sure that the planes could reach their full operational capability, meaning that they could be used as intended. Some of the things that were missing were power grid upgrades in some of the infrastructure that was essential, and also some of the advanced weaponry. You needed to have missiles on those fighter jets if you wanted to use them as intended, and they weren't there.
This is why we say the cost estimates now are at $27.7. billion. There are at least another $5.5 billion that should be added to that in order to look at the cost of fully transitioning from CF-18s to CF-35s.
I haven't looked at the contracts, obviously. When these contracts are negotiated, I'm assuming from what you're saying that it's not a fixed price—like, if you want to buy one jet, this is the cost that it's going to be.
Is that usual practice for how these contracts are negotiated?
In this case, it isn't a contract. There's a memorandum of understanding with the United States. This is a nation-to-nation agreement. Canada is part of a group of allies that are purchasing CF-35s.
Canada's memorandum of understanding calls for 88 planes to be delivered to Canada. That's why Canada is part of the joint strike fighter program office. It's so they can keep on top of the cost and the latest upgrades that are needed in buildings and so on.
This is unique. It's not like entering into a contract to buy 88 cars; this is about having fighter planes that are compatible with those of our allies.
I think it's obviously very dynamic in that sense, but how should the Royal Canadian Air Force then balance the operational needs and requirements they have with the budget and options that are available?
This is where we called for better transparency around the full costs of the project and more regular updates, and those were some of the recommendations we put in our report.
We know it's also very important that Canada has fully operational main operating bases where the fighter jets can be stationed and where they can conduct day-to-day operations and training. Can you tell us anything about the upgrades or changes that will need to be made to existing operating bases as Canada procures the new fighter jets? You've talked about it very briefly.
Yes, I can offer a really brief answer.
What we've put in here about power upgrades and making sure the facilities are available is the extent to which we can talk about that. The rest of that is information we can't put in the public domain.
Thank you, Mr. Chair. Thanks for joining us, folks.
I'm going to talk about GC Strategies a bit. You said that in 21% of the contracts you examined, you found the federal organizations lacked documentation on file that showed valid security clearances for contract resources. The question I have is this: Did you find any evidence of citizens' personal or health information being compromised, or the possibility of that occurring?
Our finding really is flagging the risk that it could occur. When you don't have the right security clearances on file and you haven't checked that, there is a risk that personal information, government information or government assets could be exposed when they shouldn't be.
We did, however, look at some of the contracts. We didn't look at all of them in detail and we didn't find any breaches. Not having the information on file doesn't mean the person didn't have a security clearance; it means it wasn't there.
We also looked at this in ArriveCAN and didn't find breaches, but this is a risk. If you determined that a contractor should have security clearance, they should not be doing the work until they have that security clearance.
That's true.
The next question I have, ma'am, is this: Canadians expect the federal organizations to have controls, processes and policies in place to support fair, open and transparent procurements and to promote value for money. As regular Canadians are asking, are we getting value for our money?
I'm always asked that question. At times that's a very easy answer to give, and at other times it's a more complex answer to give.
When we were looking at the contracts with GC Strategies, we saw that at times they were to provide advice or a report, and we saw those reports, but at other times there was no evidence as to what work was done. When we spoke with public servants, they told us that there had been a lot of work and they assured us that they had received value for money, but what was missing was the ability to demonstrate that to us.
That's why we've called for going back to basics here. It's not about creating more rules; it's about understanding the rules that are there, knowing why they should be implemented and then implementing them. Making sure the government received what they contracted for before authorizing payment is basic, and often we saw that this wasn't happening.
Based on that, if the work was not completed and the payment was still made, has any department or agency tried to recover the money that was paid to GC Strategies for work that was not completed but for which payment was made?
I'm often asked this question as well.
The difficulty there is that one of the final steps a public servant should do is to certify, before saying to go ahead and make the payment, that the goods or services were received. We saw consistently that public servants were certifying that; what we were looking for was proof.
For example, 94% of the contracts we looked at required time sheets in order to demonstrate that a contractor had done work. We found that those were very rarely there. In almost 60% of the cases, there was little to no evidence of that. In fact, in one contract, there was only one contractor out of 25 who had a time sheet. That doesn't mean the work wasn't done; it means there's no ability to demonstrate to Canadians that you received value for money.
That's a big gap and a big hole that shouldn't be there. It's not as easy as saying that because you didn't have a time sheet, nothing was done, and you should go recover the money; it's about knowing whether or not the work was done.
You note that you're not making any recommendations with this report, as you had already made them before, and you reconfirm that the policy should be well understood by now by these various agencies. I'm sensing a degree of exasperation on your part, because you go on to say that the procurement policies in place as of 2024 “promote fairness, transparency and value for Canadians—when they are followed.”
In that regard, what is the percentage of compliance to federal policies across the various departments and agencies? Second, who is the most compliant, and perhaps who is the least compliant?
I'm not sure I could give you that answer. I would have to point you to a few reports that we did. We did a report on professional services contracts that looked at work awarded to McKinsey. There was this work on contracts awarded to GC Strategies. This report had 31 federal entities in it. The other one had 20. In almost every case, there was something that was missing. This included federal Crown corporations, departments and agencies. That's why I think there is a need to take a step back and ask why this is happening. Are there too many procurement rules, so individuals just don't know them all and it's impossible to apply them all, or is it that they're working around them?
I think that that's what the government has to find out, which is why I didn't want to contribute to more rules. I think you have to go back to the basics.
Thank you very much.
Mr. Sousa, welcome back to OGGO. You went a whole week without appearing here.
Go ahead, sir.
It's a pleasure, Chair.
Thank you, Auditor General, for your report.
Believe us, we value the contributions you make in regard to all these reviews and recommendations and in highlighting some of the issues that we always need to be apprised of.
Let's start with GC Strategies. I know that PSPC had already implemented a host of changes. There's much that you have done and much that the ombudsman has done over the course of the last two years: improving the guidance of other government departments, putting caps on task-based contracts, mandatory value-for-money assessments for all RFPs with a time-based basis for payment, mandatory reporting by client departments for the usage of mandatory methods of supply, and ADM-level approval for non-competitive contract extensions and single-bid procurements.
Auditor General, does that demonstrate to you that other federal contractors should be mindful of the rules? You've made it clear that we don't need any more rules; we just need to abide by them. This happened during the pandemic period. What's happening now, relative to some of these issues?
I'm going to talk about two reports, the one on GC strategies and then the one on professional services with McKinsey.
Both of those reports went back in time. In this case, we looked at contracts from 2015 to 2024: prior to the pandemic, during the pandemic and postpandemic, if we're in a postpandemic time.
This is pervasive, and that's why to me it isn't just about what happened since you've changed the rules. All of the rules that were changed were changed following some of my work, so this is forward-looking. All I can tell you is that in the past, there was a rather pervasive lack of respect for rules, which is why going back to training and reinforcing what they are is the first step. It's not creating more rules.
To be clear, your recommendations, the ombud's recommendations and some of the other reports and investigations that were provided have been adopted by government. We have taken, if I understand correctly, all of these things into action, recognizing some of the things that may have been amiss previously.
Was there any interference or engagement by elected officials in any of these contracts?
There was engagement in one contract, I do recall, with an elected official, but that was required by procurement rules because of the dollar value of the contract. Other than that, this is work done by the public service that we are looking at.
I would like to think that returning to the basics and re-educating people will help procurement going forward, but I do think that there are a lot of rules, and there is a need to decide whether streamlining them will bring better efficiency and better value for money.
During the time of the pandemic, there was an acceleration in trying to get things done very quickly under the urgency of the time.
On another matter, the F-35s, are you called before PACP as a witness on this very issue? You're here today. Are you doing more committees?
This afternoon I'm going to the public accounts committee, but that's for an in camera discussion about my office and how we can support committee members. Any time I'm invited, I'm more than happy to go to a committee.
Typically, the national defence committee and the Senate committee would study this. I would trust that the public accounts committee will have outlined what they're expecting to study, perhaps after they chat with me this afternoon.
Would it be appropriate, given the recommendations and the work and the reports you've made...? It's now been given to government for their review. Are they reviewing it? I believe there is a review under way right now by government to respond to some of the work you've done. Is that correct?
I believe that the Prime Minister asked for a review of the decision to purchase the F-35s. That has not yet been made public. Other than that, the departments have responded to our recommendations, and they've agreed with them. It is now really up to the public accounts committee and other committees to hold them to account for delivering on the action plans they intend to use.
Thank you.
Would it be appropriate to have those action plans before us in response? You're going to go before these committees and you're going to talk about the issues that you've already reported, but the main question from all of us is, what's going to happen next? That's the report we're waiting for.
The public accounts committee does require that every department that is in a report submit a detailed action plan to them. I would imagine that, committee to committee, you could get hold of that, or you could ask National Defence for their action plan to use as part of your study on these reports.
[Translation]
I have a question about National Defence as well.
Over the past few weeks, we've been hearing a lot about how the government is planning massive spending. We'll find out on November 4.
On June 25, the Prime Minister, Mr. Carney, told NATO that Canada would allocate up to 5% of its GDP to military spending.
That's all well and good, but we heard earlier that there's a shortage of pilots and technicians. National Defence is unable to spend its money at this point.
Are we on the right track? Is that pledge to increase Canada's military spending to 5% of its GDP realistic?
That's a hard question for me to answer because I don't know exactly how the government plans to spend the money it has allocated.
I know some of the money will go to a pay increase for National Defence personnel, and I think that will help with recruitment and retention. I can't say any more than that about whether Canada is on the right track or not. I would have to see what decisions the public service makes.
My last question is about accountability and transparency. As I said, I worked in a certain field.
How can it be that the government is unable to demonstrate what it has to do in terms of accountability when many small organizations, including many not-for-profits, have to undergo reviews and audits before they can get a contract or funding? Those organizations don't even have the internal expertise to do that.
How can it be that the government awarded 106 contracts through GC Strategies without even checking security clearances, without following the rules and without appropriate accountability, just because it said the situation was urgent?
I expect the rules to be very clear, and I expect all departments to follow them. I also expect to see direct communication between you and the departments, and I expect you to have all the information you need to do your job properly.
You've mentioned the precise reason why I did not make any recommendations in the report on GC Strategies. There are already many rules governing procurement. It's time to take a step back to ensure that there are not too many, that we keep the ones that are necessary, and that we then ensure that they are properly implemented.
[English]
Thank you, Chair.
I want to circle back to some of the questions that my colleague was asking in regard to CMHC.
According to your report, you found that under the federal lands initiative, CMHC was reporting numbers that were already committed under another agreement as their own. Is it possible that, outside the scope of your audit, there are other instances of numbers being reported like this?
You're right about this report. We highlighted what I would say is a lack of clarity in their reporting. CMHC is still leading other projects, but those homes were counted in another project and then counted again here because land was added to the projects through the lands initiative. While that might be how you want to get to your 4,000 commitments, I think you just need to be clear. That's why we made some recommendations around a project being delayed and so on. That kind of information is useful.
My biggest concern in this area is around how they're measuring success. They're measuring success based on commitments, which is a great benchmark to get to, but those buildings are not ready for occupancy, and people who need affordable housing are going to be waiting longer than 2027 or 2028 to be able to move in.
Thank you. I agree with you. I know the government has made very ambitious commitments to tackle housing affordability, including with the federal lands initiative. After making those commitments, how you get there matters, so I appreciate what you pointed out in this report.
I think you mentioned this already. CMHC was also found to be reporting units committed and units that have been built in the same category, as we just discussed. You noted that after examining all 23 agreements, you found that they provided for only half of that—49%, I think. You spoke to it not being 4,000.
Could this be misleading to Canadians looking to evaluate the government's progress on the commitments that we just spoke about?
I think your question aligns exactly with the statements I was making about providing better clarity.
We did conclude that they're well on track. I'm just trying to find the exhibit number that I can give you.
Exhibit 3.3 in the report outlines our lay of the land. The 49% is really those that will be available for occupancy by 2027-28, even though they're well on track to meeting the benchmark of having commitments for 4,000.
As everyone knows, when you do a renovation or a build, there are things that cause delays. Even that kind of clarity could be provided so that there is more accurate information for Canadians to make decisions on where they could access affordable housing.
I have one final question.
In your report, there were groups having difficulties navigating “the CMHC's legal framework”.
For indigenous businesses and for smaller and medium-sized businesses, what options do they have to participate in programs like these without having to hire lawyers, consultants or lobbyists? How do they compete?
I will see if Markirit wants to add anything here, but I will offer this. We spoke with indigenous groups, and they actually appreciated their experience through the federal lands initiative and are eager to participate again. However, they did raise concerns with us about the burden that it puts on an indigenous community to deal with all of the paperwork, the process and so on.
That's where I would expect the federal government, in the spirit of true reconciliation, to support indigenous communities who want to participate, supporting them differently from the way they would support another builder in the country. It's about figuring out what they need, meeting them halfway and supporting them better.
I don't know if there's anything you want to add, Markirit. It's not necessary. It's up to you.
Okay.
Could you comment as well on the experience of the small and medium-sized businesses that would want to compete in that space?
I don't know if we zeroed in on smaller businesses versus larger businesses, but there are only 23 agreements, so there are not many participating. I think you need rigour no matter what, but you can't make it too much. That would be the advice I'd offer.
Thank you, Mr. Chair.
I'm glad you just mentioned that housing and infrastructure more broadly do take time to build and to develop. On that point, you noted in the report, on page 15, that the federal lands initiative is on track to meet its goals. Are there any positive lessons the government should be taking as they go about setting up the Build Canada Homes program?
I think it would be in setting up the right measurement. You succeed because you stay focused on what you're going to measure, and measuring commitments is not the outcome needed. They're well on track for the commitments. Wouldn't it have been so much more exciting to say, “well on track for having occupancy” by those years?
I would say that the lesson is this: They did a great job at setting a metric, one that focuses on outcomes as well as the midpoint should be there. A commitment is a great midpoint, but then the outcome is one I would hope they would focus on.
Here, Public Services and Procurement Canada is trying to pilot accelerated ways of disposing of buildings, and I think it's a good lesson learned to see how that pilot is going. There were 10 buildings that were put into that to shorten the period of time. Usually it takes about eight years to free up a building and move it into the lands initiative, and they're trying to do it in three. Building on some of their lessons learned throughout the pandemic—doing things not sequentially but together—could speed up the process.
It was too early for us to tell whether or not that will materialize, so I'd like to see them focus in on that, on better ways to free up buildings and get them into the federal lands initiative.
For sure, I think occupancy and infrastructure projects going into certificate of occupancy are incredibly important, but you have to be going through the process at a timely clip in order to get to that final occupancy and that ultimate result that we all want.
In addition, do you have any overall thoughts on how the government should be going about streamlining the federal lands initiative, which you touched on a little, and public lands programs under the Build Canada Homes program?
The overall thought I would give is that when you make a commitment, it sets out expectations, and then with expectation comes the need to be transparent in progress and in how you plan on getting there. As the government moves through more home initiatives, I would encourage being clear and transparent about where projects are.
The cost overruns on the F-35s right now are at $27.7 billion in total, so it's definitely over budget with a 50% increase. The $7-billion defence of Canada fighter infrastructure project is above and beyond that $27.7 billion. Is that correct?
Yes, that's correct, and I think it's important to note that the $27.7-billion estimate is National Defence's estimate. We believe another $5.5 billion should be added to that for some essential weapons and for facility upgrades.
If DND's estimate, which by extension means your audit, was based on incomplete information, how much more do you think the cost overrun actually is?
Well, it is at least $5.5 billion more than the $27.7 billion.
We did try to sit back and ask, “What does make a CF-35 fully operational and capable?”, and that's why we picked up certain other elements. Other things that we couldn't cost yet, because the government hadn't costed those, would have been the interim facilities that are needed because of the three-year delay in the two main bases. They do need to have interim facilities, and that hadn't been costed out yet, so that would need to be added as well.
That's why we recommended a much more active and, at minimum, annual process in monitoring costs and updating estimates so that DND knows what it needs to commit going forward.
Did you get a sense of the actual final number of full-time employees that would be required? I know the report says 246, but you said that this number was based on a certain level of completeness of the program. I'm assuming that's Cold Lake and Bagotville. It wasn't based on the full completeness of the program. There are also the other eight bases that are listed in your report, particularly Inuvik and Iqaluit.
When this program is fully rolled out and fully implemented, how many full-time employees are we going to need above and beyond that 246? Do you know?
As we mentioned in the report, the 246 are about planning, logistics and security. There's so much more that goes into running a base. You would have to add in pilots, technicians and maintenance crew.
I don't have that number, and neither does National Defence right now. They haven't finished all of their plans, which is why we could only talk to you about the level of detail that we have here.
We do know that they're planning for pilot training. Their current plans don't envision having enough pilots, so they need to do something different to ensure that they are ready when those aircraft arrive in Canada.
That's correct.
The first few aircraft are going to the United States. They're expected to be there in 2026 to train Canada's pilots. Then the first plane is expected to arrive in Canada in 2028.
When the U.S. Government Accountability Office stated that the F-35 block 4 upgrade is delayed five years and is at least $6 billion over budget, was that factored into your report, or is that above and beyond as well?
I believe that the Government Accountability Office issued that notice very recently. My report dates back to the end of 2024 and we released it in June of this year, so no, it would not have factored in information that was not yet available.
Okay.
Even based on incomplete information, is there anything else you flagged as potential cost overruns?
Our report outlined that we had identified the need for temporary facilities and the need for more training. Those are the minimum right now. Again, many of the plans were not complete, so it's difficult to determine if they will come with additional costs. That's why we issued our recommendations.
This is still very much in the early stages. I would expect that there will be a little more clarity provided over the coming years. More regular monitoring of costs in a proactive way is absolutely needed.
I will finish my line of questioning with respect to reduction of office space.
You indicated that of the 37 tenants in the first tranche, 15 had not yet signed agreements. I just want to verify who is responsible for signing agreements.
Is there any political involvement in those agreements?
It's my understanding that an office reduction agreement is between the deputy minister of a department and Public Services and Procurement Canada. I can tell you that's the agreement I've signed for my office, so I would imagine that everyone would have to follow a similar process.
I have a second question with respect to occupational density targets.
Are there any targets involved in these agreements? If so, from an OECD perspective and from a best practice perspective, are there occupational density targets that are typically set in such agreements?
I think this is where every department has to make its own decision about how much occupancy and space it needs. That's why the need to have accurate information about how existing space is being used is so essential to being able to move forward.
Given that we expect auditors to occasionally be out on site auditing entities, I would imagine that my office would have less of a need than a department that would have everyone in every single day because they're policy-driven, and so on.
I think it will really depend, department by department. The public service does so many different activities that I don't think it would be one size fits all.
[Translation]
Mr. Chair, since I don't have much time, I will summarize.
We were to study three reports: the report on the acquisition of F‑35 fighter jets, the report on vacant federal office space that needs to be used urgently, and the report on GC Strategies contracts. I will summarize what I have understood, and you can add recommendations in a few seconds.
First, with regard to the subcontracting of GC Strategies contracts, it is not only a matter of accountability and not paying for a service before it is delivered, but security clearances must also be considered. I have heard that it is important to verify the security clearance of subcontractors. When it comes to accountability, it's about providing clarity and evidence so that you can do your job well.
You also mentioned that there are rules. You asked whether, if we forget what has happened in recent years and focus on the present, we could explore, streamline and formulate the rules in the simplest way possible so that all public servants can comply with them.
You also talked about risk assessment. That leads me to say that when we advertise, we need to show what we are looking for through an implementation plan and not be reactive by saying that we did not anticipate certain things. That's basically what I understood, because we could be here for hours.
Are there other aspects we should be vigilant about and pay attention to?
This is a very broad question. I could give you a list of items, but I'm going to focus on the three reports before us. They show that better cost planning is needed; this issue is often raised in our reports, as is the fact that certain things are missing. So, at the start of a project, it's important to take the time and make the effort to get a good estimate of the costs.
With regard to your comment on good risk management, costs must be closely monitored. When contracts are in a foreign currency, significant currency fluctuations will certainly affect the budget. More rigorous cost monitoring is essential in any project that the government undertakes.
We must also carry out a dynamic analysis of situations. Situations change. When a decision is made, the world continues to turn and change. I think it is also essential to have the flexibility to adjust. This will become apparent during annual monitoring. Vigilance is essential when monitoring a project.
[English]
[Translation]
[English]
I wanted to go back to affordable housing, if that's all right.
To me, it's clear that it's vulnerable families who are being left out of the affordable housing projects, but according to your report, if I understand it correctly, the only things we're counting are the Liberal promises, as opposed to actual houses being built.
Is that correct?
How I would summarize it is that Canada Mortgage and Housing Corporation is going in the right direction. They've got commitments. They're falling short where it matters most, which would be affordability and move-in readiness, but they're going in the right direction. Securing commitments is the right step forward.
I understood from the report that the federal lands initiative doesn't actually report how many homes are built and ready. It's only reporting things that have been promised or committed to, so Canadians have no clear way of knowing what they're really getting for their tax dollars.
Would you agree?
That's why we noted that their reporting lacked clarity. We felt it needed to include other elements. We gave some examples that could be used.
A commitment is just that. Being move-in ready and understanding when construction has had delays is important. That's why we think that more needs to be added to the public reporting.
Is there any transparent way for the public to see how many of these units in these projects are actually being rented out at that so-called affordable rate? Is there a system in place to track that?
I believe the Canada Mortgage and Housing Corporation does some reporting. It was, if I'm not mistaken, a little behind.
We did put some information in our report to give you a point-in-time estimate and then made recommendations for CMHC to continue with that accurate reporting. Really, it's up to them to ask what their plans are and when they plan on making that information public.
So there's no real way for a Canadian to see whether there's something available in an affordable housing unit. There's no way for them to find out where, how many and what's available.
I'm not sure I know where to send someone, but I would tell you that what you're looking for will also depend on the definition of affordability. One individual might think something is affordable, while another might not.
I imagine there are municipal resources and provincial resources. I don't think the federal lands initiative will provide all of the information that an individual will need to help find affordable housing in their community.
Taxpayers are footing the bill. They deserve to know if these dollars are actually creating those affordable homes or if they are just glossy announcements.
Right now, is there a way for them to go somewhere to see, in their own town or in their own city, which of these units are there and available at the affordable rate?
If you're talking about the federal lands initiative, it has public reporting. As I said, that would not be the only place I would look if I were in search of affordable housing.
I'm concerned about even the broader risk. Without good transparency in place, isn't there a real risk that the same failures we're seeing in the federal lands initiative are just going to be repeated, only at a much bigger and more expensive scale, in the Build Canada Homes plan?
I can't really comment on a project I haven't audited.
Clearly, if the measure of affordability does not have some link to household income, I will raise the same concern that I have raised twice already. I do believe that affordability should be linked to household income, as the national housing strategy calls for and as Statistics Canada uses as a benchmark for affordability in our country.
I have one more question.
You mentioned that you didn't want to put any more rules in place. What about the idea of a rule saying that you must be able to easily access information as to what affordable housing is available in your own town?
You're asking me to comment on a policy decision. I'll leave it up to all of you to decide what the best rules are for the federal public service to follow.
Thank you again. I guess we'll wrap up.
There's a line of questioning that reinforces the need for the government to show its response to you in regard to the F-35s and in regard to what we're going to take next. A lot of the questions I'm hearing are for government. I think it's appropriate for us to get that review done so that we can reaffirm your recommendations. I appreciate your putting those forward.
My next item is the professional services contract. You made note that recommendations were made and rules exist and that the government has taken the necessary precautions to ensure that those rules are noted. They just need to be followed. They need to ensure that our public service follows those rules to align with some of the recommendations made by you and others. I'm just recapping that part.
Here's my question now.
In regard to the modernization of the housing—your third report—you notes that there was resistance from federal tenants in the reallocation of funding. I have a few questions with respect to this.
Could anything have been done to prevent this? What can be done to mitigate this in the future, in regard to the relationship with the tenants?
I'll comment on your comment and then I'll actually get to your question.
I think it isn't just about following the rules. I do believe that public servants need to understand why the rules are in place. That might help with the application of them. I think that's essential. Adding more rules is what's been happening right now. I would encourage the government to take a step back and streamline in order to speed things up.
Now I have to remember the other question.
Yes, I think this is why we highlighted in the report that not every government department has a financial incentive.
If you had a financial incentive to reduce your rent, you would most likely try to reduce your footprint if it's underutilized. It is up to the government to figure out the best way to get tenants to agree, whether that's consolidating into buildings or whether that's renovating some of the buildings so that they're more attractive for people to work in. It's whatever incentive they want.
I would personally encourage my deputy minister colleagues to think about how each of us can support the government's goal of reducing federal office space to help contribute to affordable housing.
Agreed, and the government has agreed with some of those recommendations.
I don't know. We can't predict the future. We can't predict future problems. How would you handle those situations that aren't being addressed, such as when they are resisting providing the information?
I think that Public Services and Procurement Canada needs to enforce compliance. Reducing office space by 50% by 2034 is a stated government objective, and it's up to PSPC to entice and enforce that compliance.
This brings us to the last question, to recap this. Let's focus on some of the methodology that exists in some of the other OECD countries.
My colleague mentioned how Australia calculates the percentage of tenancies meeting the occupational density—the square metres, the long-term employee targets. What is the right target? What do you feel should be established by the Government of Canada?
I think that's a difficult question. As I answered before, I don't think it's one size fits all. The space you need in a laboratory will be different from the space you need in an office building.
I think it is about leveraging the expertise the public service has and understanding how their space is used now, and then looking to best practices in other countries, which is why we highlighted Australia in our report as well. We highlighted the kind of information that they put out there about office space. I believe it would incentivize departments to want to reduce their office space if the federal government had that kind of information in the public domain.
Of course, the incentive is there to provide greater operational efficiencies. As you say, if it's not one size fits all, the respective average, I think, is what they're using. How are they determining the differences in those spaces?
I'm not exactly sure how they're going about it, but I would tell you that the motivation should be that a building, whether it is fully occupied or partially occupied, comes with costs. You need to maintain buildings and you need to operate buildings, and in many of the municipalities, the federal government has to make payments in lieu of taxes, because the government doesn't pay municipal taxes. All of that comes with a cost, and that's why we highlighted the need of.... There are some cost savings. The government estimated the cost at $3.9 billion over 10 years. That could be repurposed.
That's a great point, and that's part of what we need to do as we go forward.
Thank you so much, all of you, for being here today and for your reports.
That's it, Chair.
You took my line, Charles.
Voices: Oh, oh!
The Chair: That's why we brought you back today.
Before all of you pack up and go, I have a couple of quick questions, colleagues, if you don't mind.
Did you look at the NCC office space at all as part of this study? Have you looked at whether the government is still purchasing office space at the same time that they're trying to reduce their footprint?
I can't tell you for sure whether the NCC was in here. We wouldn't have targeted them. We are doing, I believe, a special examination on the National Capital Commission right now, but it won't look specifically at office space.
Are they acquiring more office space? Over the term of our audit, I don't think that happened.
I actually do not have an answer for that. We didn't look at that. We were focusing in on the plan to reduce it.
The short answer to that question is that it might be more complex.
If certain buildings might not be sustainable, for whatever reasons—maybe the repairs are going to cost more—it might make sense to acquire a different building. Not every building is going to be fit for purpose for a particular organization. I would say that—
I would assume, though, that if the government is trying to get rid of 50% of their buildings, they would move over to a government building rather than buy a new building.
On the F-35, the review date, the published date, has come and gone. There has been some talk about a dual air force and two different planes. Have you looked at or considered what the added cost would be?
If the government moves away from the F-35, as has been bandied about, and considering how much has been invested there and that the investments in Bagotville and Cold Lake are still going ahead to accommodate the F-35, have you considered it? I'm curious to know if you can give a quick idea about some of the costs that might be involved if that happened.
It's difficult to determine the costs should a change in direction happen when we don't even know if a change in direction has happened. I guess what I would offer up is that no—
Again, the review date has come and gone, but we're still going ahead with investing in some of these buildings.
I would say that no matter what aircraft the Canadian Armed Forces chooses, they will need trained pilots and they will need upgraded facilities to house them. The technology of the new aircraft is different from the CF-18 technology. No matter what, that training will be needed and that investment will be needed.
The Chair: Yes—
This is the last question. It relates to the GC Strategies questions.
We had an Order Paper question come back, and there has been an expanded number of files referred to the RCMP. I think it's up to 11 now.
In a previous public accounts meeting I was at, PSPC said they weren't actually forcing repayment of some of these accounts. They were just negotiating with some of the companies that had been found to be improperly charging or defrauding the government.
It may be not the role for you to opine on this, but do you think it tells people that the government is not serious about enforcing their own rules if we're not even forcing repayment—
I really can't comment on files that have been referred to the RCMP, but in the case of the elements you're talking about, where PSPC is trying to recover amounts, I believe it's not linked to GC Strategies. It was linked to a bigger, broader—
—investigation around a a vendor charging multiple departments for what appeared to be the same seven hours in a day or the same piece of work.
It's widespread, but the question is, do you think the government should be forcing immediate payment and not doing a negotiation for clearly identified...?
Once an investigation is done and it's clear that payment was made and services were not rendered, I would expect that overpayments will always be recovered. How the government goes about that is a decision they make, but I would expect that you shouldn't pay for things you didn't receive.
Thank you.
Now we'll get to Mr. Sousa's comment on thanking all of you. It's wonderful to see all of you. We're going to suspend very briefly so that everyone can say goodbye.
Mr. Gaheer, please stay on the same Zoom call, because we'll be back in about two minutes.
We are suspended.
Thank you for your patience, everyone. We are back.
We have a couple of housekeeping items before we finish for the day.
On the first one, you've seen—
An hon. member: Chair—
The Chair: Oh, yes. I'm sorry. I'll get to you. Can I cover this stuff first? Thanks.
You've seen the budgets for the two meetings. Can I have agreement?
Again, these are not the amounts that we're spending. They are “up to” amounts.
Can I have agreement for the two budgets?
Some hon. members: Agreed.
The Chair: That's wonderful. Thank you very much.
Next, you've all received a copy of the recommendations that came out of the subcommittee from last week. This is our path going forward. We are going to keep it flexible, because we're going to work around the schedules for the two ministers, which are always, as we mentioned before, a bit more difficult to work around. Are we all in agreement on the subcommittee report?
Some hon. members: Agreed.
The Chair: That's wonderful.
—Ms. Sudds is not here, and she was part of it.
The Canada Lands Company is really not part of PSPC, so I'm not sure if you want housing as a result, because housing is the one it's overseeing. It's item 4. It's not a major issue.
Canada Lands Company does come to OGGO. We haven't had them in about eight years. It's not definite. It's just one of the ones to consider, but probably not. The priority is the Public Service Integrity Commissioner and the procurement ombudsman. It's not a necessary type of thing, if that makes sense.
Can I just clarify? I wasn't there. Item 1 was with regard to the consul general's new official residence. Was that discussed? Was that something that was...?
It was the subcommittee, I know, and I think Marie was in the subcommittee. I would say that I wasn't there, but was that..? I wasn't sure what.... I've been getting a reference from Ms. Jansen that possibly it wasn't something that she had understood.
[Translation]
What I understand, Mr. Chair, is that we have to get started. We began this morning and are in the process of setting the agenda. Obviously, this will depend as usual on availability. We have given ourselves some leeway to ensure we have a good agenda. At the same time, there are some dates that we can already confirm. I am thinking in particular of the two meetings. We are talking about a report. We decided that we should at least finish all the reports related to the previous Parliament without reopening them.
It is absolutely certain that we need to establish what we will do over the next few weeks. We are recommending this for good reason.
[English]
Yes, that is correct. Thanks very much.
We'll move forward.
Let's see, what else do we have? It's to adopt a budget.
From time to time, colleagues—
I'm sorry, Madame. Please go ahead.
[Translation]
Time is flying by, but I would like to move a notice of motion. I don't want it debated today. I have it in both official languages. I will read it to you, and then I will send it to you right after I read it.
[English]
May I interrupt?
I'm going to go through my stuff first. Then Ms. Block had her hand up for a motion, and then we'll get to yours.
From time to time, we get ATIP requests for committee business. We had a request from DND. I'm going to bore everybody and read out something. This is the first time this has come up in about a year.
On August 25, 2025, the Department of National Defence identified our committee as a third party with regard to records that are now subject to a request made under the Act.
This was sent October 15.
Committees receive such requests from time to time, and OGGO is no exception. Usually, they are straightforward, and we have a well-established process for them. Since this is the first time most of you are encountering such a procedure, please let me give you more detailed explanations for context.
I'm just going to read it verbatim from our clerk.
The Access to Information Act gives the public the right to access records held by various government institutions, subject to certain exceptions. Even if the House of Commons, including its standing committees, is constitutionally and legally independent from the federal government and is not subject to the Act, it may receive third party notices from government institutions when the requested materials contain information relating to the business of the House or a committee.
On December 2, 2013, the House of Commons adopted the Forty-Second Report of the Standing Committee on Procedure and House Affairs (PROC) regarding parliamentary privilege and access to information. The report established the process to be followed by committees when they receive third party notices under the Act.
The records at issue here consist of email exchanges between the clerk of OGGO to the Department inviting the Minister and other officials to appear during the ArriveCAN application....
It wasn't on any other information. It was solely the clerk sending out an email inviting someone.
It is up to us whether we wish to release it. I'm going to suggest we do so, because there is nothing there except the clerk inviting the minister to attend, but we do need the committee's approval to release that information.
[Translation]
Mr. Chair, I have a lot of respect for our interpreters. I think the committee has been sitting for two hours. Even my brain is starting to get tired.
I just want to make sure of one thing. When we talk about access to information…. I need to hear it again, because I want to be sure I understand correctly. I was on the Standing Committee on Procedure and House Affairs. We received an email asking for a witness to come…. Please explain that to me again.
[English]
It was an ATIP request that came to National Defence. Part of what it covers is with regard to ArriveCAN. They are requesting information under the Access to Information Act. We are just asking if it's okay to release the information that pertains to OGGO.
In this case, it's solely the email inviting people to the committee. If it was something more sensitive, chances are that we would say no, but in this case, it's solely the email invitation. Rather than saying no and raising flags, I suggest that we just release the email. Are we agreed?
Some hon. members: Agreed.
The Chair: That's perfect. I will remember to speak more slowly for the interpretation.
This is the last item, I believe.
Mr. Gill is what we consider an associate member. I'm just seeking the committee's approval to include him on the email distribution list, give him access to our digital binder going forward and allow him to attend in camera sessions.
Some hon. members: Agreed.
The Chair: I had Mrs. Block, and then I'll go to you, Madame Gaudreau—
Mr. Chair, I just want to make sure that any of our associate members will also be extended a similar courtesy, if that's okay.
If you're bringing someone on, it's kind of unusual. If they're a regular permanent associate member.... For the sake of argument, if Mr. Sousa is going to be with us each and every time but is not an official member and needs to be subbed in, then yes, but it's not for every parliamentarian, if that makes sense.
It's not that we wouldn't dearly love to have Mr. Sousa back. It's wonderful to have you back, Mr. Sousa. I tease you.
We'll go to Mrs. Block and then Ms. Gaudreau.
[Translation]
Essentially, our interpreters' contract is expiring. Therefore, I think it would be important to make this a notice of motion. As you will see, it is not prescriptive.
I will read the motion slowly and send it to you in both official languages.
The motion is as follows:
That pursuant to Standing Order 108(3)(c), the committee hold a two-hour meeting in the very near future to review the renewal of the contract for parliamentary interpreters and ensure that the quality and professional standard of interpretation services are maintained, in full compliance with the right of parliamentarians to express themselves and work in either official language; that the committee invite, as soon as possible, the Minister of Government Transformation, Public Works and Procurement, as well as Canadian representatives of the International Association of Conference Interpreters.
I'll send you the text of the motion, Mr. Chair.
[English]
Are you intending to table this motion right now, or is it for the future?
It's for the future. Okay.
[Translation]
I want to move the notice of motion, but since we will have a busy schedule over the next few weeks, we simply need to set a date. In my opinion, this will be by the end of 2025.
[English]
I'm sorry. Do you wish to move it right now, or are you just reading it into the record?
Are you just giving notice?
[Translation]
This is a notice of motion; I do not want to debate it now.
Please remind me of the procedure, Mr. Chair. If I move this motion, we will get to debate it later, correct?
[English]
[Translation]
[English]
Okay. That's wonderful.
I understand it's two hours. If we can finalize it when we have the PSPC minister, we'll see, rather than have them appear twice in a short period. Perhaps they can extend it a tiny bit and we can wrap it up at the same time, but we'll follow up when we confirm the minister's attendance.
If there's nothing else, I will thank Charles for being with us again.
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