Standing Committee on Government Operations and Estimates: March 12, 2026

2025 to 2026 Supplementary Estimates (C) for Public Services and Procurement Canada, the portfolio

Date: March 12, 2026, 11:00 to 1:00 p.m.
Location: In person
Present: Arianne Reza, Deputy Minister Public Services and Procurement Canada

General items
- 1. Opening statement
- 2. Public Services and Procurement Canada and the portfolio’s 2025 to 2026 Supplementary Estimates (C) overview
Key Issues
Government Transformation
Procurement
Defence
Real Property
- 19. Aligning the office portfolio with workplace presence requirements
- 20. Build Canada Homes
Other
- 21. Summary of Budget 2025 announcements specific to Public Services and Procurement Canada

General items

1. Opening statement

Arianne Reza
Deputy Minister
Public Services and Procurement Canada
Standing Committee on Government Operations and Estimates (OGGO)
Supplementary Estimates (C)
March 12, 2026
Check against delivery
609 words

Thank you, Mr. Chair for welcoming us today.

Before I begin, I would like to acknowledge that we are gathered today on the traditional, unceded territory of the Algonquin Anishinaabe People.

With me today are:

Nathalie Bertrand, Senior Assistant Deputy Minister, Receiver General and Pension
Michael Hammond, Chief Financial Officer and Assistant Deputy Minister, Finance; and
Lorenzo Ieraci, Assistant Deputy Minister, Policy, Planning and Communications

We are pleased to appear before you today to answer your questions regarding the $43 million being sought through the Supplementary Estimates (C) for Public Services and Procurement Canada, commonly known as PSPC.

Mr. Chair, as the country is confronted with rapidly developing economic and security challenges, the federal government remains committed to investing in Canada alongside reducing expenditure on daily operations.

The wide scope of PSPC’s mandate allows the department to directly support many of the Government’s goals.

Mr. Chair, before taking your questions, I would like to provide details regarding PSPC’s role in specific Government priorities targeted within the Supplementary Estimates and also outline a number of funding requests directly applicable to PSPC.

In the face of continued economic and security uncertainties, the department is requesting 17 million dollars to support advertising across other government departments and agencies.

These funds are for campaigns which were unforeseen and cannot be supported by existing departmental or agency funds.

Mr. Chair, the Supplementary Estimates also contain a request for 13.5 million dollars for accommodation costs for employees who provide pension services relating to the Public Service Superannuation Act, Canadian Forces Superannuation Act, Royal Canadian Mounted Police Superannuation Act, Canadian Forces Pension Fund and Reserve Force Pension Fund.

This funding is a yearly administrative adjustment requested through Supplementary Estimates exercises.

Mr. Chair, among other requests, contained within these Supplementary Estimates is 2 million dollars of funding to establish a joint transition office to support defence procurement reforms.

The Joint Transition Office efforts are a continuation of the Defence Procurement Review initiative that was outlined in the Government of Canada’s defence policy, Our North, Strong and Free: A Renewed Vision for Canada’s Defence.

The money is to be used to support the Government’s work to streamline defence procurement and modernize Canada’s military capabilities as well as increase co-operation with allies.

Specifically, this funding will be used to review existing legislation, regulations, and policy frameworks and implement any necessary amendments to these with the goal of achieving the desired policy objectives as part of defence procurement reforms.

These Supplementary Estimates also contain a request for 6.2 million dollars of funding for the Public Lands for Homes Plan. The Government is working to use surplus, underused, and vacant public lands, such as empty office towers or low-rise buildings to build affordable homes.

This money would provide funding for the Canada Public Land Bank and support the Federal Lands Centre on Disposals to unlock federal public lands across the country for housing.

Mr. Chair, we have a number of net transfers between government departments in the supplementary estimates before you today.

These include transfer of unused funds from Global Affairs Canada to PSPC for costs incurred during the hosting of last year’s G7 Summit in Alberta. The transfer of funds from Global Affairs Canada as well as from Shared Services Canada will allow PSPC to avoid incurring a deficit in relation to the summit.

Finally, Mr. Chair, I will also highlight that, as a result of the Government’s work to transform its information technology infrastructure, data centres are being consolidated leading to power and space savings.

PSPC will transfer $900,000 to Shared Services Canada to compensate for power and space savings reductions, among other transfers within these estimates.

Mr. Chair, PSPC is committed to further cost efficiencies and savings as we work to support the Government’s policy agenda.

We are happy to take your questions.

Thank you.

2. Public Services and Procurement Canada and the portfolio’s 2025 to 2026 Supplementary Estimates (C) overview

Public Services and Procurement Canada (PSPC) is seeking a net increase of $43.0 million through Supplementary Estimates (C), increasing its available funding from $7,350.6 million to $7,393.6 million net of revenues.

Table 1: Items sought in 2025 to 2026 Supplementary Estimates (C)
Item	Amount (in millions)
Voted appropriations
Funding for government advertising programs (Budget 2025) (horizontal item)	$17.0
Funding for accommodation costs related to pension administration	$13.5
Funding for the Public Lands for Homes Plan (Budget 2024)	$6.2
Funding to establish a Joint Transition Office to support defence procurement reforms (Budget 2025)	$2.0
Funding for increases in non-discretionary expenses associated with Crown-owned buildings and leased space	$0.9
Statutory appropriations
Contributions to employee benefit plans	$1.5
Transfers
-From other organizations
From various organizations to the Department of Public Works and Government Services for the Presidency of the 2025 G7 Summit in Canada	$5.5
-To Other Organizations
To the Department of Crown-Indigenous Relations and Northern Affairs for Canada’s Devolution obligations in Nunavut	($0.2)
To Shared Services Canada for reimbursement related to reduced accommodation requirements as a result of data centre consolidations	($0.9)
To the Treasury Board Secretariat to support the Digital Comptrollership Program	($2.5)
Total	$43.0

Voted appropriations: $39.6 million increase^{Footnote i}

Funding for government advertising programs (Budget 2025) (horizontal item)

$17,000,000

Purpose of funding

Considering ongoing economic uncertainty, the Government of Canada anticipates a growing need for responsive advertising efforts. The Emerging Needs Fund allows PSPC to do advertising for priority, urgent and/or unforeseen files on behalf of and in collaboration with other Government of Canada departments.

Funding of $17 million will support government advertising programs (a horizontal item) and will be used for advertising to communicate with Canadians on emerging issues, as necessary
This funding reflects a commitment to flexibility and adaptability in addressing emerging challenges, and supplements the funding of $12 million sought and approved for 2025 to 2026 ($1 million via Main Estimates 2025 to 2026 and $11 million via Supplementary Estimates B 2025 to 2026)

Any project proposed for the Emerging Needs Fund will undergo the same review the Privy Council Office conducts on all advertising project proposals. In addition, verification will be done to confirm that the requesting department is unable to support the campaign with internal funds and that the campaign was not foreseen and therefore could not have been included in the department’s original advertising forecast. Any unused funds will be returned to the fiscal framework.

Funding for accommodation costs related to pension administration

$13,532,736

Purpose of funding

Funding for accommodation costs for employees who provide pension services relating to the Public Service Superannuation Act, Canadian Forces Superannuation Act, Royal Canadian Mounted Police Superannuation Act, Canadian Forces Pension Fund and Reserve Force Pension Fund. This funding is a yearly administrative adjustment requested through Supplementary Estimates exercises.

Funding of $13.5 million is broken down as follows:

accommodation costs for PSPC’s employees:
- $13.2 million: Public Service Superannuation Act, Canadian Forces Superannuation Act and Royal Canadian Mounted Police Superannuation Act
accommodation costs for the Department of National Defence’s employees:
- $0.3 million: Canadian Forces Pension Fund and Reserve Force Pension Fund

Funding for the Public Lands for Homes Plan (Budget 2024)

$6,202,514

Purpose of funding

Currently, governments across Canada possess surplus, underused, and vacant public lands, such as empty office towers or low-rise buildings that could be used to build affordable homes for Canadians. Budget 2024 announced funding for the Canada Public Land Bank and to support the Federal Lands Centre on Disposals to unlock federal public lands across the country for housing.

Funding of $3.4 million will be used in support of the Canada Public Land Bank (CPLB), which is an accessible, online, and public inventory of surplus and underutilized land
- the CPLB will enhance public transparency by providing a single, centralized source of information for Canadians and displays key details such as property status, characteristics, and potential for future uses such as housing
- funding will be used for the refinement of the CPLB and its supporting tools
Funding of $2.8 million will be used to scale up PSPC’s Federal Lands Centre on Disposals to accelerate and streamline the disposal process
- funding will be used for disposal planning and policy development, data analytics, issuance of best practices related to consultation with Indigenous, official language minority communities, and other stakeholders
- costs will also be for liaising with other departments to advance government priorities associated with public lands, such as Housing, Infrastructure and Communities Canada and Build Canada Homes

Funding to establish a Joint Transition Office to support defence procurement reforms (Budget 2025)

$1,994,962

Purpose of funding

The Joint Transition Office funding is to be used to support the Government’s work to streamline defence procurement and modernize Canada’s military capabilities as well as increase co-operation with allies
- specifically, it will be used to review existing legislation, regulations, and policy frameworks and implement any necessary amendments to these with the goal of achieving the desired policy objectives as part of defence procurement reforms

Statutory appropriations: $1.5 million increase

Contributions to employee benefit plans

$1,532,931

Purpose of funding

The contributions to employee benefit plans include the employer’s matching contributions and payments to the Public Service Superannuation Plan, the Canada and Quebec Pension plans, death benefits, and the employment insurance accounts.

This increase to employee benefit plans relates to salary costs for the establishment of a Joint Transition Office to support defence procurement reforms, support for the Canada Public Land Bank, and the scale up of PSPC’s Federal Lands Centre on Disposals

Net transfers between government departments: $1.9 million net increase^{Footnote ii}

From the Department of Foreign Affairs, Trade and Development and Shared Services Canada to the Department of Public Works and Government Services for the Presidency of the 2025 G7 Summit in Canada

Transfer of $5,450,842

Purpose of funding

In June 2025, Canada hosted the G7 Summit in the Bow Valley Region of Alberta. This event was the cornerstone of the G7 Presidency and the most important and high-profile event that took place in Canada in 2025. During this summit, a series of ministerial meetings was organized with world leaders in attendance. The summit was led by Global Affairs Canada (GAC) in collaboration with 12 departments and agencies. Since Canada hosts the presidency on a rotating basis every 7 years, GAC and its partners do not maintain a permanent team or ongoing operational resources for this work.

As the lead for this initiative, GAC is responsible for consolidating and reviewing the overall G7 budget and must, if necessary, reallocate any surpluses from partner departments or its own funds to other organizations involved in the G7 presidency with deficits following the delivery of the Summit.

PSPC has determined that it cannot manage its financial pressures for costs incurred for the G7 Summit with its current funding. Therefore, GAC and SSC are transferring their unused funds ($2,450,842 and $3,000,000, respectively) to PSPC so it can avoid incurring a deficit.

From the Department of Public Works and Government Services to the Department of Crown-Indigenous Relations and Northern Affairs for Canada’s Devolution obligations in Nunavut

Transfer of $173,000

Purpose of funding

On January 18, 2024, the Government of Nunavut (GN), Nunavut Tunngavik Incorporated, and the Government of Canada (GC) signed the Nunavut Lands and Resources Devolution Agreement. This agreement provides for the transfer of responsibilities related to Nunavut’s public lands, natural resources, and water rights from the GC to the GN. As part of this transfer, ownership of the Qimugjuk Building, located at 969 Federal Road in Iqaluit, Nunavut, will be officially transferred to the GN by the devolution date of April 1, 2027.

Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC) and PSPC are collaborating to fulfill their respective obligations under the agreement, including those pertaining to the Qimugjuk Building.

A Building Condition Report was commissioned for the Qimugjuk Building, which identified a series of recommendations. Through CIRNAC, consultations were held with the GN to review these recommendations and confirm the obligations that must be addressed prior to the building being devolved.

Funding will be used to issue a Grant and Contribution to the GN to finance consulting work related to urgent exterior repairs to the Qimugjuk building in Iqaluit. The building, scheduled for transfer in April 2027, requires fixes to a leaking skylight and deteriorating siding. The GN will manage design and delivery, ensuring completion before devolution and alignment with agreement requirements

Funding for increases in non-discretionary expenses associated with Crown-owned buildings and leased space, and Transfer from the Department of Public Works and Government Services to Shared Services Canada for reimbursement related to reduced accommodation requirements as a result of data centre consolidations

Funding of $904,487 and Transfer of $904,487

Purpose of funding

Shared Services Canada (SSC) was created in 2011 to transform how the Government manages its information technology infrastructure. In line with its mandate, one of SSC’s core objectives is to generate savings through IT consolidation. Through the data centre consolidation project, SSC will close and PSPC will decommission, if needed, legacy data centres and consolidate them.

The $0.9 million funding and transfer represents power and space savings in fiscal year 2024 to 2025 as a result of closing data centres. These savings are passed on to SSC. PSPC is the only department that can access the funding related to accommodation, and therefore, the only one able to compensate SSC for its power and space savings reduction.

Funding is for reduced accommodation requirements as a result of data centre consolidations (SSC’s savings incurred in 2024 to 2025):
- $487,830 related to power
- $416,657 related to space

From various organizations to the Treasury Board Secretariat to support the Digital Comptrollership Program

Transfer of $2,500,000

Purpose of funding

The Government of Canada (GC) operates multiple departmental ﬁnancial managementsystems (DFMS) most of which are at, or coming to, end-of-life. Signiﬁcant investment is required over the next 5 years to transition off these aging systems. DFMS consolidation can reduce the technical debt, mitigate impacts, while modernizing the GC’s financial management landscape.

The SAP ﬁnancial management system currently in use in several departments and agencies is anticipated to reach the end of its extended SAP maintenance support on December 31, 2030. The Digital Comptrollership Program (DCP) is mandated to mitigate the risks of this critical transition towards a new financial system by developing a standard GC financial management solution, common financial management business processes and common data structures, which is to be delivered through a Digital Comptrollership Enterprise Service for adoption by departments and agencies. DCP will coordinate this GC-wide transition.

Funding will be to accelerate the modernization of DFMS before fiscal year 2030 to 2031
- this would support the overall Financial Management Transformation strategy that aims to consolidate and reduce the number of systems across the GC

Canada Post and National Capital Commission 2025 to 2026 Supplementary Estimates (C) overview

Canada Post

Cash injection under section 31 of the Canada Post Corporation Act

Purpose of funding

The Government will provide Canada Post with $1.008 billion as an interim measure in order to continue operations and maintain financial solvency. This funding, which would be provided on an as-needed basis to cover non-discretionary obligations and fully repaid by Canada Post, serves as a short-term financial bridge to protect service continuity. This funding is in addition to the repayable funding of up to $1.034 billion announced in January 2025.

National Capital Commission

Funding to Protect Heritage Assets

Purpose of funding

Funding from the 2022 Fall Economic Statement (FES) and the 2023 FES, $332.6 million in additional appropriations, was earmarked for the National Capital Commission (NCC) to protect heritage assets, as well as address the deferred maintenance of NCC assets in the National Capital Region. The NCC developed at a multi-year rehabilitation plan (2023-2024 to 2032-2033) which identified this funding for the maintenance and upkeep of historical and culturally significant infrastructure, including assets within the official residences’ portfolio.

In January 2025, the Minister of Finance approved a request to reprofile $18.9 million from the 2022 FES from year 2023 to 2024 to year 2025 to 2026 to rehabilitate heritage assets.

Funding of $18.9 million is broken down as follows:

$2,465 million in operating
$16,450 million in capital

Key Issues

3. Procurement process for official language interpretation services and new request for standing offer

Issue

In 2025, in collaboration with the Procurement Branch, the Translation Bureau modified its procurement tool. The new standing offers came into effect in January 2026.

Key facts

The Translation Bureau uses suppliers for approximately 40% of official languages interpretation requests in Parliament (exceptionally, only 24% in the current year due to prorogation and federal elections). The rates charged by suppliers have experienced significant cost increase of nearly 70%, going from about $800 for a 6-hour day of interpretation in 2019 to about $1,353 for a 4-hour day in 2025, plus a 25% bonus when the meeting is broadcast
From the request for standing offers, 39 offers were awarded, for a total of 41 interpretation service resources available under a standing offer starting in January 2026 to serve Parliament, compared to 75 resources available under an open contract in 2025
The median rate charged by suppliers increased by 3.5% under the new procurement tool that came into effect in January 2026, compared to the median price in 2025
Beyond its primary procurement tool, the Translation Bureau has always used other means to meet interpretation needs
- from April 2023 to the end of 2025, in addition to the approximately $19 million paid to its suppliers under the former primary tool, the Bureau spent more than $3 million on one-time contracts with other suppliers

Key messages

In fall 2025 and early January 2026, Public Services and Procurement Canada launched a request for a standing offer for official languages interpretation services, following well-established procurement processes
The purpose of the request for a standing offer was to provide greater flexibility, particularly when extending events, to reduce the administrative burden and reduce costs, while better aligning with industry standards
The request for standing offers now allows suppliers to add accredited resources to their offer at any time, which allows capacity to be increased on an ad hoc basis

If pressed on reports from the Office of the Procurement Ombud:

Public Services and Procurement Canada takes its responsibilities related to the management of interpretation services contracts very seriously and takes note of the findings made by the Procurement Ombud
after the issue was identified in April 2025, Public Services and Procurement Canada promptly conducted an internal review and acknowledged in June 2025 a discrepancy in the Attribution of Work
- Public Services and Procurement Canada is continuing its investigation into the circumstances and contributing factors of this matter
- measures have already been put in place to ensure compliance with contractual clauses, including centralizing the assignment of work under a single authority capable of providing better oversight
the Translation Bureau is also implementing other measures, including better employee training, clearer internal directives and better recordkeeping practices
Public Services and Procurement Canada is currently looking at the next steps to follow up on the recommendations of the Procurement Ombud

If pressed on the impact of choosing the lowest bidder on the quality of interpretation:

the quality of interpretation is assured not by the price charged, but rather by a process of mandatory accreditation of suppliers, as well as other requirements, and by a process of ongoing management of the quality performance of suppliers

If pressed on the impact of new standing offers on supplier health and safety:

occupational health and safety are top priorities for the Translation Bureau
the Translation Bureau continuously applies protective measures based on technological advances and research in audiology and acoustics for all interpreters, whether they are employees or suppliers
from 2020 to 2024, the number of acoustic incidents decreased by approximately 75% thanks to measures implemented by the Translation Bureau
standing offers include health and safety provisions similar to those in previous contracts

Background

To replace contracts that expired on December 31, 2025, Public Services and Procurement Canada (PSPC) launched a request for information process at the end of June 2025, which closed on August 8, 2025. Nearly 50 suppliers submitted comments that were taken into account in the preparation of the new procurement tool: a request for standing offers.

The request for a standing offer was posted on October 24, 2025, with an initial closing date of November 24, 2025, for interpreters who already hold accreditation with the Translation Bureau. Thirty-four bidders were selected for a total of 36 available interpretation service resources. A second phase took place from December 24, 2025, to January 16, 2026, to allow candidates who had passed the last accreditation exam to submit their offers. Five new bidders were selected, bringing the total to 41 available interpretation service resources.

Between June and August 2025, the Office of the Procurement Ombud (OPO) received written complaints from 4 Canadian suppliers regarding the administration of their separate contracts awarded by PSPC for the “provision of parliamentary and conference interpretation services.” OPO addressed each complaint in a separate report. The 4 OPO reports focus primarily on the allocation of work, and one of them also addresses concerns related to travel time. Other issues were also raised, such as the use of the CanadaBuys (Ariba) platform and the department's integrity in administering the contract. Summaries of the 4 complaint review reports were published on the OPO website between January 12 and February 23, 2026. PSPC has committed to sharing the results of its review of the reports' findings with the OPO.

4. Old Age Security payment issues

Issue

Media is reporting on delays and errors in payments to seniors in the delivery of Canada’s Old Age Security pension benefits

Key facts

Curam software was procured following a competitive procurement process in 2021
Implementation of Old Age Security on Curam was contracted to Deloitte Inc. in April 2022 following a competitive procurement process
- the total value of that work was $315 million excluding taxes
Old Age Security was the first benefit delivered on the new Curam-based Benefits Delivery Modernization platform, with 7.4 million seniors receiving benefits since April 2025

Key messages

Public Services and Procurement Canada remains committed to achieving value for money under the broader Benefits Delivery Modernization program through active contract management, including rigorous cost control and oversight mechanisms
Public Services and Procurement Canada’s role is limited to procurement and contract management. System operation and benefit payments are the responsibility of Employment and Social Development Canada

If pressed on comparisons to SAAQclic:

initial cost estimates for complex information technology programs are based in preliminary and an often incomplete view of the work needed to deliver solutions that operate correctly and fully protect Canadians’ personal information
Benefits Delivery Modernization work is being procured in phases to reduce risk and regularly test the market for best value as requirements are increasingly better defined
work to implement the Old Age Security system was competitively procured in accordance with Canada’s contract cost principles

Background

Benefits Delivery Modernization (BDM) is a long-term federal initiative to replace obsolescent systems used to deliver payments to Canadians for Old Age Security (OAS), Employment Insurance (EI) and the Canada Pension Plan (CPP). Public Services and Procurement Canada (PSPC) supports the program by conducting competitive procurements and managing contracts on behalf of Economic and Social Development Canada (ESDC). Individual benefits are onboarded in stages to manage risk and ensure service continuity. PSPC continues to work with ESDC to apply lessons learned as additional benefits are modernized.

Through a competitive procurement process, PSPC awarded 4 Master Systems Integrator Contracts (MSIC) to 4 qualified Systems Integrators in Spring 2021. OAS implementation work was competed between these suppliers.

In 2021, PSPC awarded a competitive contract to procure Curam software to IBM Canada, currently valued at $107 million, excluding taxes.

5. Annual Report on Government of Canada Advertising Activities

Issue

On January 30, 2026, Public Services and Procurement Canada released the annual report on Government of Canada advertising activities for fiscal year 2024 to 2025.

Key facts

In fiscal year 2024 to 2025, Government of Canada advertising expenditures totalled $78.2 million. This includes media purchased through the government’s Agency of Record ($64.2 million), planning and production services, and the cost of advertising placed directly with media by government institutions

Key messages

Government of Canada advertising is an important way for Canadians to get timely information about government policies, programs and services
Advertising expenditures fluctuate from year to year depending on government priorities
The Annual Report on Government of Canada Advertising Activities demonstrates the government’s commitment to openness and transparency regarding its advertising expenditures

If pressed on advertising allocation in fiscal year 2024 to 2025:

decisions regarding specific advertising campaigns are the responsibility of individual government institutions that manage the programs and services

If pressed on advertising allocation in fiscal year 2025 to 2026 and ongoing:

in Budget 2025, it was announced that the Central Advertising Fund would be increased by $25 million in fiscal year 2025 to 2026, for a total of $60 million and starting in 2026 to 2027 the Central Advertising Fund would be increased by $80 million for a total of $115 million annually for the next 4 years

Background

Public Services and Procurement Canada’s (PSPC) common services role in government advertising is to contract advertising agencies, review creative materials and media plans for compliance with acts and policies, and manage the government's Agency of Record and the Emerging Needs Fund. The annual report has been published on the PSPC website each year since 2002 to 2003 and is not tabled in Parliament. In 2016, the Minister approved a fixed annual publishing date on the last business day of January. Since 2004, the annual limit of the Central Advertising Fund was set to $35 million.

The report includes information reported by government institutions and the government’s Agency of Record.

In fiscal year 2024 to 2025, PSPC, as a department, spent $210,925 on advertising. The top 3 advertising institutions were the following:

Employment and Social Development Canada: $8,555,463
Canada Revenue Agency: $8,339,066
Health Canada: $7,961,746

Stakeholder Roles in Advertising

Privy Council Office

develops the Government of Canada’s advertisement plan and coordinates the Treasury Board Submission

Treasury Board of Canada Secretariat

set policies, directives and mandatory procedures for communications and federal identity, including advertising
manages the processes for the oversight mechanism for non-partisan advertising

Public Services and Procurement Canada

advises on compliance, the advertising process including the non-partisan review and produces the annual report on advertising expenditures
manages procurement tools for creative agencies and the Agency of Record
manages the Emerging Needs Fund (part of the Central Advertising Fund)

Institutions

accountable for the management of campaigns
evaluate and report on results

Government Transformation

6. Red Tape Reduction Measures

Issue

In response to the red tape review process led by the President of the Treasury Board, Public Services and Procurement Canada and the National Capital Commission reviewed their regulations to reduce administrative burden, modernize processes and eliminate outdated regulations.

Key facts

Public Services and Procurement Canada operates under 20 acts and 27 regulations
In total, through consolidation, comprehensive reviews, and targeted amendments, the department is reducing red tape related to 14 of its regulations

Key messages

To enhance agility, improve clarity, and reflect evolving technologies and practices, Public Services and Procurement Canada is consolidating and revising its regulatory framework by developing new Harmonized Procurement Regulations and updating other operational regulations, such as the Translation Bureau and Controlled Goods Regulations
Moving forward, all the organizations in the portfolio will continue to seek ways to eliminate red tape in their programs, policies, processes and service delivery

Background

On July 9, 2025, the President of the Treasury Board called on all Ministers with regulatory responsibilities to undertake a 60-day review of their regulatory portfolios to reduce red tape and support a stronger, more inclusive Canadian economy.

Ministers were asked to publish progress reports outlining immediate actions taken, as well as short, medium, and long-term plans to streamline regulations.

For Public Services and Procurement Canada, the list of actions outlined in the progress report include:

develop Harmonized Procurement regulations
update of the Controlled Goods Regulations
review of Translation Bureau Regulations
amend the Government Property Traffic Regulations
amend the Public Works Nuisances Regulations
amend the Seized Property Disposition Regulations
amend the Canada Gazette Publication Order, 2014
repeal the Selkirk Marine Railway Dry Dock and the Canadian Vickers Dry Dock Regulations and explore alternatives to other regulations that govern the operations of similar assets

For the National Capital Commission, the list of actions outlined in the progress report include:

Develop leaner processes for the Federal Land Use, Design and Transaction Approval and Environmental Impact Assessment
Modernizing the National Capital Act

7. Canada Post Transformation

Issue

The Government has instructed Canada Post to take steps to transform its operations and work toward becoming financially self-sustaining.

Key facts

Canada Post’s legislated mandate requires it to be financially self-sustaining but it has reported over $5 billion in operating losses since 2018
In November 2025, Canada Post reported a $541 million dollar loss before tax in the third quarter, marking its largest quarterly loss in history

Key messages

Canadians deserve serious action to begin transforming Canada Post in response to the scale and urgency of its financial challenges. Inaction is not an option
As such, the Minister of Government Transformation, Public Works and Procurement and Québec Lieutenant has instructed Canada Post to operationalize changes to letter delivery standards, proceed with community mailbox conversions, and to right‑size and transform the retail post office network, while protecting access in rural, remote and underserved areas
This marks the first step in a multi-year transformation that will set Canada Post on a better and more sustainable financial path
In November, Canada Post submitted its transformation plan to the Minister, and we are carefully reviewing the Plan

If pressed on the updates to letter delivery standards:

to reflect worldwide decline in mail volumes and improve efficiency, Canada Post will update letter mail delivery standards and transition toward a more flexible, volume-based delivery approach

If pressed on community mailbox conversion:

increasing centralized delivery, which already serves 72% of Canadians, will save over $350 million annually, once fully implemented
Canada Post will consult with affected communities and enhance its delivery accommodation program, which includes door-to-door delivery for Canadians with accessibility challenges

If pressed on ending the rural moratorium:

the Government knows that the post office is often a lifeline for rural and remote communities, but it is time to modernize the 1994 moratorium
the Minister has instructed Canada Post to return to him with a plan that will protect access in rural and remote communities and underserved areas before any post office closure occurs

If pressed on the regulated stamp rate-setting process:

as part of Budget 2025, the Government proposed amendments to the Canada Post Corporation Act to modernize and streamline the regulated stamp rate-setting process by enabling Canada Post to adjust postage without Governor in Council approval

Background

In May 2025, William Kaplan was appointed to lead an Industrial Inquiry Commission (IIC) to examine Canada Post’s financial challenges in the context of the collective-bargaining dispute, with special attention to the underlying causes of the dispute.

The IIC’s report, submitted on May 15, 2025, outlined structural and financial challenges faced by Canada Post and made recommendations for both the Government and for collective bargaining, to return Canada Post to some degree of financial sustainability so it can continue, but in a manner that reflects 2025 realities.

On September 25, 2025, the Government announced it was accepting the recommendations of the IIC and instructed Canada Post to develop a comprehensive transformation plan, given that additional measures would be necessary to return the Corporation to financial solvency.

On November 7, 2025, Canada Post submitted its comprehensive transformation plan (‘The Next Mile’) to the Minister of Government Transformation, Public Works and Procurement and Québec Lieutenant. The plan lays out an implementation strategy for conversions to community mailboxes, modernizing its network of post offices (following the lifting of the rural moratorium, while ensuring the maintenance of service to rural, remote, and Indigenous communities), amending service standards for letter mail and reducing its management and overhead costs.

On January 28, 2026, Canada Post and the Canadian Union of Postal Workers, announced they had finalized tentative agreements covering both bargaining units, to be ratified by members by the end of May 2026. No strike or lockout actions will take place during this process. If agreements are ratified, this will put an end to a 2-year period of labour uncertainty that has deeply damaged Canada Post’s bottom-line, meaning Canadians should be able to look toward to an extended period of service reliability – until January 31, 2029 – that will enable Canada Post to begin its transformation.

8. Canada Post financial stability

Issue

Canada Post is facing existential financial challenges driven by lower revenues resulting from the decline in letter mail volumes and the increasingly competitive parcel market. To address these challenges, Canada Post has submitted its comprehensive transformation plan to return the corporation to financial self-sustainability to the Minister.

Key facts

On September 25, 2025, the Minister of Government Transformation, Public Works and Procurement and Quebec Lieutenant instructed Canada Post to provide a comprehensive transformation plan to not only implement the recommendations of the Industrial Inquiry Commission but also to propose additional measures to restore the corporation to financial solvency, including reducing its management overhead costs
In November 2025, Canada Post reported a $541 million loss before tax in the third quarter, its worst recorded quarterly result, indicating that the $1.034 billion in repayable funding provided in 2025 would run out earlier than expected and that it would require additional funds in 2026 and beyond to continue operations
On January 28, 2026, Canada Post and the Canadian Union of Postal workers announced they had finalized tentative collective agreements
- ratification voting will take place from April 20 to May 30, 2026
On February 12, 2026, the 2025-2026 Supplementary Estimates (C) were tabled in Parliament, including an additional up to $1.01 billion in repayable funding for Canada Post to ensure the continuity of postal services

Key messages

The Minister received Canada Post’s comprehensive transformation plan in November 2025, and is currently reviewing it carefully
During his appearance at Standing Committee on Government Operations and Estimates on February 10, 2026, the Minister emphasized the need to balance urgent action to restore Canada Post’s financial sustainability with taking the time to ensure appropriate guardrails are embedded in the transformation plan, particularly protecting services in rural, remote and Indigenous communities
The Minister also communicated that he expects Canada Post to initiate consultation with impacted communities
Through Supplementary Estimates C, the government is providing up to $1.01 billion in additional funding to Canada Post
This temporary support ensures Canadians continue to receive reliable postal services today, while the necessary reforms to secure Canada Post’s long-term viability begin

If pressed on the ability to repay the cash injections:

the Canada Post Corporation Act requires that all amounts be repaid, until such time as a deficit appropriation is included in the Estimates
a memorandum of understanding has been established between Finance Canada, PSPC, and Canada Post outlining the terms of the cash injection

If pressed on the labour situation:

the Government is pleased that a tentative agreement has been reached between Canada Post and the Canadian Union of Postal Workers and looks forward to its ratification by postal workers

Background

Over the last 20 years, the amount of mail Canadians receive has declined by 70%, while the number of addresses has increased by more than 3 million. This has resulted in lower revenues and higher costs for Canada Post. Canada Post’s legislated mandate requires it to be financially self-sustaining but it has reported over $5.5 billion in operating losses since 2018, including more than $1 billion in the first 3 quarters of 2025 alone. These pressures have been compounded by the uncertainty caused by the 2-year long labour negotiations and various strike actions by the Canadian Union of Postal Workers in 2024 and 2025.

In December 2024, William Kaplan was appointed to lead an Industrial Inquiry Commission to examine Canada Post’s financial challenges in the context of the collective bargaining dispute. The Industrial Inquiry Commission report, submitted on May 15, 2025, outlined structural and financial challenges faced by Canada Post and made recommendations.

On September 25, 2025, the Government announced it was accepting the recommendations of the Industrial Inquiry Commission and instructed Canada Post to develop a comprehensive transformation plan, given that additional measures would be necessary to return the Corporation to financial solvency.

On November 7, 2025, Canada Post submitted its comprehensive transformation plan to the Minister of Government Transformation, Public Works and Procurement and Quebec Lieutenant. The plan lays out an implementation strategy for conversions to community mailboxes, modernizing its network of post offices (following the lifting of the rural moratorium, while ensuring the maintenance of service to rural, remote, and Indigenous communities), amending service standards for letter mail and reducing its management and overhead costs.

On January 28, 2026, after more than 2 years of negotiations, Canada Post and the Canadian Union of Postal workers announced they had finalized tentative agreements that would expire on January 31, 2029. Language is set to be finalized soon, and ratification is expected shortly thereafter. This will put an end to a 2-year period of labour uncertainty that has deeply damaged Canada Post’s bottom-line. While the agreements are subject to ratification by union membership, no strike or lockout actions will take place during this process, meaning Canadians can look toward to an extended period of labour peace - until January 31, 2029 - that will enable Canada Post to begin its transformation.

On February 5, 2026, the Government of Canada announced its intention to make up to $1.01 billion in repayable funding available to Canada Post in the 2025 to 26 fiscal year. This funding, which would be provided on an as-needed basis to cover non-discretionary obligations and fully repaid by Canada Post, serves as a short-term financial bridge to protect service continuity, while building on the repayable funding of up to $1.034 billion announced in January 2025. Questions about the ability to repay the cash injections have been raised by Opposition members of parliament at Committee and in the House.

As part of Budget 2025, the Government is also proposing amendments to the Canada Post Corporation Act to deregulate the stamp rate-setting process and enable Canada Post to set stamp rates, without the approval of the Governor in Council, in line with recommendation #7 of the Industrial Inquiry Commission.

9. Update on the move to Dayforce

Issue

Progress continues to be made on the transition from the Phoenix system to the Dayforce human resources and pay solution.

Notes:

all questions related to the mental health of public servants, collective agreements, overpayment write-offs due to the 6-year statutory restriction and compensation for Phoenix damages should be directed to the President of the Treasury Board
issues related to income tax are under the purview of the Minister of Finance and National Revenue

Key facts

As of January 28, 2026, the overall inventory of transactions waiting to be processed at the Pay Centre has decreased by 63% since the peak of January 2018, representing a reduction of 233,000 transactions

Key messages

The Government of Canada remains committed to supporting employees and continues to take action and implement measures on all fronts to resolve public service pay issues
In July 2025, the Government of Canada shifted its focus to finalizing the design and build of the Dayforce solution, which reinforces its commitment to digital transformation focused on transparency, efficiency, and paying employees accurately and on time
The Dayforce solution is progressing well, with pre-implementation activities underway, including design and build
Enterprise testing is set to begin in summer 2026. The Canadian Nuclear Safety Commission will deploy first, followed by Public Services and Procurement Canada and Shared Services Canada, with all 3 having a planned go-live date in 2027 to 2028

If pressed on the effects of Workforce Adjustment and the backlog:

as part of workforce adjustment, affected employee accounts will be resolved, including any backlog cases
collaboration with client departments, ongoing monitoring of intake patterns, and capacity allocation according to case complexity are critical to mitigating risk
- adjustments to prioritization strategies will be required to protect service standards and maintain overall backlog stabilization

If pressed on the 10-year Phoenix report by the Professional Institute of the Public Service of Canada:

while meaningful progress has been achieved, Public Services and Procurement Canada acknowledges that some employees continue to experience pay issues
the department continues to invest in the stabilization of the current system while providing targeted, compassionate support to affected employees
this includes:
- the increased use of technological tools now makes it possible to process a large volume of compensation cases, speeding up the resolution of complex transactions and significantly reducing processing times
- continued modernization of human resources and pay management processes, and standardization of pay processes across departments

Background

In 2025 to 2026 and 2026 to 2027, Public Services and Procurement Canada (PSPC), in collaboration with its partners, will focus on finalizing the building and testing of the Dayforce solution. In parallel, essential change management activities will be undertaken to support departmental, operational, and enterprise readiness for a potential deployment.

On August 21, 2025, the acquisition of Dayforce by Thoma Bravo, a private equity firm specializing in software investments, based in the United States, was announced. The contract between the Government of Canada and Dayforce, which was amended on March 31, 2025, remains valid. The solution is hosted in Canada and all the resources who work on the contract directly require Canadian clearances or equivalent. The contract also requires that all data be stored in Canada. Dayforce reaffirmed its commitments to the Government of Canada and emphasized that the acquisition would not affect the existing partnership, service delivery, or contractual obligations.

Since the launch of Phoenix, PSPC has implemented a series of measures focused on stabilizing the administration of pay. We have also focused on other operational priorities in pay administration including parental leave, disability management, terminations, and overpayment recovery. We have improved service standard compliance while managing sustained increases of transactions submitted to the Pay Centre by departments and agencies. PSPC is looking at Artificial Intelligence (AI) to further automate case processing. AI will play a key role in managing transactions at the Pay Centre, and it will help to process transactions faster, with greater efficiency and accuracy. We are also taking a proactive approach to transparency by publicly sharing updates on our AI activities and achievements.

In addition, the Automated Benefit Enrollment initiative is a multi-phase project designed to streamline and automate benefits enrollment. By reducing manual processes, this initiative allows compensation advisors to focus on complex transactions across the Government of Canada.

Dayforce

Following extensive research, rigorous testing and a comprehensive feasibility assessment, the Government of Canada confirmed that Dayforce will replace Phoenix and more than 30 existing HR systems. This new approach is grounded in lessons learned, including strengthened governance, robust engagement with departments and bargaining agents, phased implementation, and full transparency.

As part of the change management approach, training will be a key factor for success and efforts to begin supporting organizations in their readiness to onboard have already begun. These efforts aim to ensure a smooth transition and reflect the government’s commitment to transparency, efficiency, and paying public servants on time and accurately.

Overpayments

Since October 2021, we have increased our efforts to seek repayment from employees and former employees who were overpaid. In the 2025 calendar year, pay accuracy now sits around 98.4%, and most remaining errors are caused by human resources (HR) actions that are delayed or entered incorrectly. The most common cause of an overpayment is a late entry or processing of a transaction that affects an employee's pay, which accounts for about 70% of all overpayments. Strong HR management and accountability are essential. Departments and managers must enter information on time and accurately. When they do not, it can lead to incorrect pay, including overpayments. The Pay Centre provides regular updates where the importance of timely and accurate data entry by HR within our client departments is reiterated.

Additionally, as part of the Unified Actions for Pay (UAP) initiative, Treasury Board of Canada Secretariat and PSPC introduced new measures to strengthen HR and pay practices and improve the reliability and consistency of HR data. These measures support better pay outcomes for employees, increase system automation and enhance data quality within existing procedures and standards.

Status of the backlog

As of January 28, 2026, the overall inventory of transactions waiting to be processed at the Pay Centre has decreased by 63% since the peak of January 2018, representing a reduction of 233,000 transactions. Additionally, there are 105,000 outstanding transactions over 1 year old, a decrease of 6,000 from the previous month.

Between April 2025 and June 2026, PSPC estimates that it will process a total of 122,500 backlog and priority cases as part of its commitment to the backlog and in preparation for the initial onboarding to Dayforce.

Procurement

10. Spending on professional and special services

Issue

Public Services and Procurement Canada is exploring ways to reduce its use of certain professional and special services.

Key facts

In Budget 2025, the Government of Canada commits to reducing spending on certain professional and special services as part of its objective to meet up to 15% in operating savings over 3 years
- these reductions will be implemented progressively between fiscal years 2026 to 2027 and 2028 to 2029 as part of the Comprehensive Expenditure Review
In fiscal year 2024 to 2025, Public Services and Procurement Canada spent $3.04 billion on professional and special services (primarily on construction, engineering and architectural, in addition to management consulting and other services)
The fiscal year 2025 to 2026 Main Estimates project Public Services and Procurement Canada spending of $3.63 billion, representing a planned increase of 19%
- this reflects the anticipated spending levels based on historical trends and adjusted to align with the overall funding outlined in the Main Estimates

Key messages

The government of Canada is committed to spending less on certain professional services. Public Services and Procurement Canada is monitoring its professional and special services spending and is looking to reduce spending in management consulting services
- it expects to report decreases in this area for fiscal year 2025 to 2026
As the department moves into groundbreaking on major infrastructure projects, the use of specialized resources (i.e., construction, engineering and architectural services) can be expected to rise, reflecting the Government of Canada’s limited internal capacity in these areas
We continue to take proactive measures to reduce expenditures in certain categories of professional services, such as management consulting and similar professional consultants

Background

Parliamentary inquiries, audits of the Office of the Auditor General and reviews of the Office of the Procurement Ombud on federal government spending on professional services contracts have generated negative media attention and have raised concerns about taxpayer dollars that are spent on professional services.

In addition to the policy direction issued by the Treasury Board of Canada Secretariat in October 2023 in The Manager’s Guide: Key Considerations when Procuring Professional Services; Public Services and Procurement Canada has taken action to strengthen existing controls and has implemented measures to ensure proper oversight of public funds, clear accountability and documented decision-making.

Over the past decade, government expenditures on professional and special services have remained consistent relative to both total government expenditures and to the total payroll for public servants.

11. Continuous improvement of the procurement of professional services

Issue

When external resources are used by departments, Public Services and Procurement Canada works to ensure that contracts are structured consistently with value in mind.

Key facts

Over the last 3 fiscal years (2022 to 2023 to 2024 to 2025), Public Services and Procurement Canada, as a common service provider, has awarded an average of 3,070 contracts and amendments annually for Professional Services, with a total value of approximately $2.8 billion dollars
Between April 1, 2025, to February 28, 2026, Public Services and Procurement Canada, as a common service provider, has awarded 2,124 contracts and amendments for professional services, with a total value of approximately $1.9 billion dollars
Based on projections for March 2026, it is estimated that the total value will reach approximately $2.2 billion for the current fiscal year, which would represent a decrease of about 21% compared to the 3 previous fiscal years

Key messages

Public Services and Procurement Canada is continuously improving and modernizing its procurement practices and instruments for professional services
The decision to hire public servants or to pursue professional services contracts is made by departments and agencies based on factors such as the availability of specialized expertise in-house, unexpected fluctuations in workload, time-limited projects, and shortages in certain employment groups
In July 2025, Public Services and Procurement Canada implemented measures to shift professional services procurement toward outcome-based contracting, to limit the value and duration of time-based professional services contracts, and to introduce a new Vendor Performance Management program

Background

The Treasury Board Directive on the Management of Procurement requires that business owners carefully consider and document alternative approaches before initiating a procurement for professional services. The Manager’s Guide: Key Considerations when Procuring Professional Services was published in October 2023 to support managers in fulfilling their responsibilities.

Public Services and Procurement Canada (PSPC) is currently developing a streamlined and simplified suite of mandatory methods of supply for the procurement of professional services. While work and consultations are underway, measures were introduced to strengthen contract management practices and ensure better value for money.

In July 2025, PSPC introduced strengthened measures to reinforce stewardship, accountability, and value for money in the procurement of professional services across the federal government. These measures respond directly to findings from parliamentary reviews, audits by the Office of the Auditor General, and reports from the Office of the Procurement Ombud.

Collectively, the measures are designed to ensure that professional services contracts are appropriately scoped, competitively awarded, and actively managed, with clearer expectations and stronger controls throughout the contract lifecycle. They limit the size, duration, and growth of task-based contracts; require greater scrutiny of pricing and amendments; strengthen invoice verification and performance oversight; and introduce additional senior-level approvals and reporting where risks are higher. At the same time, they support a gradual transition toward outcomes-based contracting.

These measures ensure that when external resources are used, decisions are well-documented, defensible, and demonstrably aligned with value for money.

In parallel, PSPC has undertaken extensive engagement with industry to inform the next phase of the transformation of professional services procurement. This has included a Request for Information and targeted one-on-one sessions with suppliers, the results of which will help shape future initiatives for fiscal year 2026 to 2027.

On September 2, 2025, PSPC implemented a new Vendor Performance Management framework to assess vendor performance and use past performance information in awarding contracts. This new framework complements the existing Vendor Performance and Corrective Measures policy that triggers suspension or other corrective measures when a contract is terminated for default. PSPC is currently working on implementing this framework for professional services supply arrangements.

12. Fraudulent billing

Issue

The Government of Canada continues to investigate and deter fraudulent billing by individuals working as sub-contractors on federal professional services contracts.

Key facts

As of January 2026, Public Services and Procurement Canada has reached agreements with the firms impacted by the fraudulent billing cases to repay approximately $4.7 million of the $5.3 million deemed to have been fraudulently billed
The Department of Justice continues efforts regarding a Statement of Claim filed in the Ontario Superior Court of Justice seeking approximately $198,000 from a prime contractor who refuses to repay the Government of Canada, this includes the subcontractor they had engaged

Key messages

Public Services and Procurement Canada has detected several instances of fraudulent billing undertaken by individuals who worked as subcontractors on federal professional services contracts
This has been the result of Public Services and Procurement Canada’s efforts over the last 5 years to strengthen its approach to detecting fraudulent activity and other types of wrongdoing
Public Services and Procurement Canada is actively pursuing the recovery of illegitimate amounts billed to the Government of Canada and referring cases to the Royal Canadian Mounted Police for criminal investigation

Background

Since March 2024, Public Services and Procurement Canada (PSPC) disclosed 9 cases of fraudulent billing by individuals working as professional services subcontractors who were employed by prime contractors that held multiple contracts with a number of federal departments and agencies:

one older case that was referred to the Royal Canadian Mounted Police (RCMP) by PSPC prior to March 20, 2024 (this case was publicly disclosed when the RCMP laid charges in July 9, 2024)
three cases that were publicly disclosed by PSPC on March 20, 2024
three cases that were publicly disclosed by PSPC on November 6, 2024
two cases that were publicly disclosed by PSPC in Spring 2025

Where appropriate, cases are referred to the RCMP for criminal investigation.

PSPC has a robust fraud risk management framework in place to prevent, detect and respond to wrongdoing in order to safeguard the integrity of the federal procurement system. This approach includes the use of a variety of tools to actively detect fraudulent activity, and respond to alleged misconduct that the Government of Canada is being defrauded in either a specific contract or on a broader scale.

PSPC employs active measures to raise awareness among procurement officers on how to identify potential instances as well as the use of data analytics and tips from the public to identify potential instances of fraud and wrongdoing.

The focus of PSPC’s administrative investigations have been on the fraudulent billing practices of sub-contractors, not the prime contractors. That said, Canada has provisions in its contracts to recover the illegitimate payments and is working with the impacted prime contractors to recover these funds.

13. Office of Supplier Integrity and Compliance

Issue

The Office of Supplier Integrity and Compliance supports the Government’s ability to identify suppliers of concern and take appropriate action to mitigate the risk they pose.

Key facts

Since launching on May 31, 2024, and as of February 24, 2026, the Office of Supplier Integrity and Compliance has provisionally suspended 6 suppliers, suspended 4 suppliers, and declared 13 suppliers to be ineligible

Key messages

The Office of Supplier Integrity and Compliance is part of a broader framework of tools that improves the Government’s ability to respond to emerging risks, and protect the integrity of the federal procurement and real property systems
It administers the Government of Canada’s suspension and debarment program for procurement and real property transactions
Since its launch, the Office has taken action against various bad actors and continues to step up efforts to identify and respond to suppliers of concern

Background

The Office of Supplier Integrity and Compliance (OSIC), launched on May 31, 2024, replaced the Government of Canada’s Integrity Regime that had been in place since 2015 as a government-wide, policy-based debarment system. It is designed to mitigate the risk of conducting business with suppliers of concern by excluding them from being awarded contracts, as opposed to being punitive which is the role of the criminal justice system.

OSIC plays a significant role in safeguarding the federal procurement and real property systems, which encompasses approximately $20 billion annually for contracts, real property agreements, the management of Crown-owned properties, and rental payments on lease contracts across Canada.

Under the updated Ineligibility and Suspension Policy (the Policy), changes have been introduced to enable OSIC to mitigate risks posed by suppliers of concern. Triggers for suspension or debarment have been expanded to include a wider range of procurement integrity-related issues such as:

offences under the Criminal Code, the Financial Administration Act and Corruption of Foreign Public Officials Act, the Canada Elections Act
civil judgments and similar offences that occur in other jurisdictions
misconduct related to human trafficking, forced labour, environmental violations, and labour code
wrongdoing in the absence of charges or convictions, including in cases where a supplier has debarred by another jurisdiction or an international organization and/or cases involving a founded breach of the Code of Conduct for Procurement

The updated Policy accords flexibility for OSIC to determine appropriate periods of ineligibility, up to a maximum of 10 years, based on an assessment of aggravating and mitigating factors.

OSIC actively monitors current events for allegations of supplier misconduct through research, information sharing, and data analytics. OSIC exercises due diligence and procedural fairness when assessing suppliers, and apply administrative safeguards to allow for independent decision making while taking action when the Policy is triggered.

14. Buy Canadian

Issue

On December 16, 2025, the Government of Canada announced the coming into force of core elements of the Buy Canadian Policy to strengthen domestic industries and ensure federal procurement spending benefits Canadian businesses.

Key facts

In fiscal year 2024 to 2025, Public Services and Procurement Canada, as Canada’s central purchasing agent, awarded $55.6 billion in contracts for goods, services and construction
- of this, approximately $50.9 billion (91%) was awarded to suppliers operating in Canada
Between April 2025 and February 2026, Public Services and Procurement Canada, as a common service provider, awarded 1,637 contracts and amendments for approximately $9.3 billion to suppliers located outside of Canada
- of this amount, 768 contracts and amendments were awarded for defence purposes representing 96% ($8.9 billion) of the total value

Key messages

Effective December 16, 2025, the government rolled out the core elements of Buy Canadian and new procurement rules that apply across all federal institutions
The new policies help create strong Canadian supply chains by prioritizing Canadian suppliers and Canadian-made goods and services whenever possible in major federal acquisitions
These measures support key Canadian sectors, including steel, aluminum and wood products, and help Canadian industries become more self-sufficient and resilient to changes in the global economy

Background

On September 5, 2025, the Prime Minister announced an expanded Buy Canadian Policy that introduces a suite of new measures to prioritize Canadian suppliers, materials, and innovation across federal procurement and funding programs.

On November 4, 2025, the Prime Minister outlined nearly $186 million in new funding from Budget 2025 to fully implement the Buy Canadian Policy and ensure it delivers lasting results for Canadian businesses and workers.

On December 16, 2025, the Minister of Government Transformation, Public Works and Procurement and Quebec Lieutenant, announced the coming into force of core elements of the Buy Canadian Policy, which fundamentally changes how the federal government purchases goods and services.

Public Services and Procurement Canada developed the Buy Canadian Procurement Policy Framework that encompasses a number of new measures.

Policies under the framework that have come into force, effective December 16, 2025, include:

the Policy on Prioritizing Canadian Suppliers and Canadian Content in Strategic Federal Procurements that gives priority to Canadian businesses and Canadian content for major federal procurements. This applies immediately to large, strategic procurements valued at $25 million and over, and will expand to contracts valued at $5 million and above by June 2026; and
the Policy on Prioritizing Canadian Materials in Federal Procurements that requires suppliers working on defence and construction contracts valued at $25 million and over to use Canadian steel, wood products and aluminum where these inputs are necessary. The Policy will have the required flexibility to introduce additional materials as required

Measures that are expected by spring 2026 include:

full implementation of the Policy on Reciprocal Procurement to further restrict eligibility for non-defence procurements to Canadian goods and services or those from our trusted trade partners. These new measures build on the Interim Reciprocal Procurement Policy that launched in July 2025, which limited the federal non-defence procurement market to suppliers located in Canada and from our trading partners; and
launch of a Small Business Procurement Program that will create specific streams of procurement for small and medium businesses and will also help them navigate the federal procurement system more easily

15. Vendor Performance Management system

Issue

Vendor Performance Management is used within Public Services and Procurement Canada and its client departments to assess vendor performance and use past vendor performance information in awarding contracts.

Key facts

Vendor Performance Management became mandatory on some internal PSPC procurements on September 2, 2025. Vendor Performance Management data is monitored monthly, and over time, will provide insight on performance results. The department already administers the Vendor Performance Corrective Measure policy, that triggers a corrective measure assessment when a contract is terminated for default or conditionally amended. The assessment may lead to ineligibility or conditions on future procurements
Vendor Performance Management complements this policy by recording the performance against contractual obligations in terms of cost, quality, schedule and administration. A vendor objection process is established, including dispute resolution, to ensure transparency and integrity
While in some cases Vendor Performance Management assessments may support the documentation of a termination for default or a conditional amendment, Vendor Performance Management by itself will not lead to contract termination or vendor ineligibility

Key messages

Vendor Performance Management is a practical risk‑management tool that captures objective evidence of how vendors actually perform on cost, schedule, quality, and administration, and ensures that information is available for future procurements. This closes a known accountability gap and incentivizes better supplier behaviour
A supplier that did not meet timelines, demonstrated poor management or supplied an inferior product would be disadvantaged in future procurements
Vendor Performance Management improves procurement outcomes by requiring communication on performance throughout the course of the contract and by using past performance in selection of suppliers
Vendors who have demonstrated good performance are favoured under this approach, while the other vendors remain eligible to bid, preserving a high level of competition

Background

Public Services and Procurement Canada (PSPC) had already begun developing a Vendor Performance Management (VPM) system as part of its efforts to modernize federal procurement and strengthen the system's performance.

In its July 2025 report on knowledge development and sharing, the Office of the Procurement Ombud (OPO) proposes 5 key solutions to address persistent systemic issues in federal procurement. These include the implementation of a VPM system. The VPM initiative, which has been underway for a few years now, responds to recommendations made by the OPO.

The first phase of the VPM applies to PSPC goods and services contracts for PSPC valued at more than $100,000. Vendors will be evaluated on such things as how well the respect timelines, incidents of consultant turnover and invoicing accuracy. Scores are not yet used in vendor selection. The next few months will be used to test the system and gather feedback. Vendors will be given a 90 day notice before scores are considered.

Program development was supported by extensive consultations with other levels of government, sector and regional buyers, vendor associations and legal services. Should the decision be made to expand it to other departments, adjustments will have to be made to the e-procurement solution. PSPC is currently working to expand the program for all contracts over $100,000, including those managed for other departments as part of its common service provider role.

Defence

16. Defence Investment Agency

Issue

The Government of Canada has created a new Defence Investment Agency to modernize defence procurement.

Key facts

On June 25, 2025, the Prime Minister announced Canada’s commitment to NATO’s Defence Industrial Pledge, which will see investments of 5% of annual GDP by 2035 in individual and collective security
On October 2, 2025, the Prime Minister announced the creation of the new Defence Investment Agency, which will overhaul and streamline Canada’s defence procurement so the Canadian Armed Forces have the world-class equipment they need
Doug Guzman started as its Chief Executive Officer in November 2025
The Defence Investment Agency is a new Special Operating Agency within Public Services and Procurement Canada. This transitional structure allows for the organization to be stood up quickly, bringing together the full complement of personnel and capabilities from Public Services and Procurement Canada, National Defence, the Canadian Armed Forces, the Canadian Coast Guard, and Innovation, Science and Economic Development Canada to modernize defence procurement

Key messages

We created the new Defence Investment Agency to protect Canadian sovereignty by quickly equipping the Canadian Armed Forces and Coast Guard with the world-class tools they need, while also bolstering our industrial capacity
The agency will consolidate procurement processes, remove duplicative approvals and red tape, and provide industry with greater clarity and certainty
The Defence Investment Agency will promote and focus investments leveraging the Canadian defence industrial base, where appropriate, creating new careers, growing our economy, and supercharging innovation in aerospace, shipbuilding, and advanced manufacturing

If pressed on ties to economic impact:

we intend to better leverage opportunities to invest in Canadian workers, companies, and technologies through the Defence Investment Agency
the Agency will help Canadian firms scale up, develop cutting-edge capabilities, and compete globally

If pressed on defence spending:

the establishment of the Defence Investment Agency is a cornerstone of Canada’s plan to increase defence spending to 2% of gross domestic product in 2025 and to 5% by 2035
this effort supports high quality domestic economic growth while better protecting Canadian sovereignty and strengthens our ability to work with allies
our goal is to reinforce defence supply chains and industrial capacity among allied nations, thus reaffirming Canada’s commitment to global security

Background

Until now, defence procurement in Canada has been divided across multiple ministers and accountabilities, and layers of oversight from central agencies. To meet the Government’s commitment to accelerate spending on defence, reforms to defence procurement are needed. The Defence Investment Agency will centralize accountability, leverage expanded authorities and introduce flexibilities in the procurement process to deliver faster procurement outcomes. Defence procurement in Canada now better aligns with our allies, such as the United Kingdom, France, and most recently Australia, which have dedicated and independent defence procurement organizations.

Reforming defence procurement has been the subject of several reports and studies. In June 2024, the Standing Committee on National Defence tabled a wide-ranging report entitled, A Time for Change: Reforming Defence Procurement in Canada. Also, in June 2024, the Parliamentary Budget Officer tabled a report on the rising costs and extended delays associated with the development and acquisition of polar icebreakers. In December 2024, the Auditor General of Canada tabled a report on the application of Industrial and Technological Benefits (ITBs) to defence procurements, noting areas for administrative improvements, and tabled an additional report on Canada’s Future Fighter Jets in June 2025. Taken together, consecutive reports indicate that the procurement process and overly customized specifications have led to avoidable cost increases and significant delays.

17. Defence Industrial Strategy

Issue

The Defence Industrial Strategy’s objective is to provide technological and operational advantage to the Canadian Armed Forces and its security partners in their mission to defend Canada, while maximizing growth, job creation and economic benefits for all Canadians.

Key facts

The new Build–Partner–Buy framework emphasizes that the government will first seek to build capabilities domestically, through 10 designated sovereign capability areas and through its Buy Canadian Policy

Key messages

The Defence Industrial Strategy applies a Build–Partner–Buy framework, which ensures Canada makes the right procurement choice every time: build here when we can, partner with trusted allies when beneficial, and buy abroad only when necessary
The Defence Investment Agency is central to implementing the framework. It accelerates procurement, improves decision‑making, and ensures industrial benefits flow back to Canada
This approach strengthens Canadian sovereignty by reducing our over‑reliance on foreign suppliers, particularly in areas critical to national security
The Defence Industrial Strategy aligns defence spending with Canadian jobs, innovation, and long‑term resilience

Background

On February 17, 2026, the Government of Canada launched a major shift in defence procurement and industrial policy. The Defence Industrial Strategy (DIS) lays out a generational effort to rebuild Canada’s defence industrial base, increase military readiness, and ensure Canada has the sovereign capability to equip its own forces.

It introduces the new Build–Partner–Buy framework, which prioritizes building equipment in Canada whenever possible, forming strategic partnerships with trusted allies where beneficial, and buying abroad only as a last resort. This policy direction reflects the government’s commitment to strengthen Canada’s defence autonomy, create domestic jobs, and ensure that defence spending delivers long-term economic and security benefits to Canadians.

At the centre of this new approach is the Defence Investment Agency (DIA), created to accelerate procurement, cut through administrative bottlenecks, and ensure that defence investments align with Canada’s industrial and technological strengths.

The DIA is responsible for operationalizing the Build–Partner–Buy framework and for implementing the government’s Buy Canadian direction, which is critical to the DIS’ objective of increasing the share of defence contracts awarded to Canadian firms to 70% within a decade.

By coordinating across departments and working directly with industry, the DIA provides clearer demand signals, secures domestic workshare, and strengthens supply chains for critical inputs such as ammunition, minerals, and advanced materials. This modernization is essential to ensuring that Canada can equip its military reliably, contribute effectively to allies, and maintain economic resilience in an increasingly contested global environment.

18. National Shipbuilding Strategy

Issue

The National Shipbuilding Strategy is a long-term commitment to renew the vessel fleets of the Royal Canadian Navy and Canadian Coast Guard, create a sustainable shipbuilding sector, and generate economic benefits for Canadians.

Note: All questions related to budget, requirements, timelines, international comparisons, and project management should be directed to the Minister of National Defence.

Key facts

As of December 2025, the Government of Canada has awarded approximately $54 billion in contracts under the National Shipbuilding Strategy to businesses across the country and, of these, $1.2 billion went to small and medium businesses with less than 250 employees
In 2025 alone, the Government of Canada awarded approximately $16 billion in new contracts to Canadian companies under the Strategy, including approximately $62 million to small and medium businesses
Since 2012, more than $11 billion in supplier development opportunities have been provided to Canadian suppliers
- of this amount more than $2.3 billion has gone to small and medium enterprises
National Shipbuilding Strategy contracts awarded between 2012 and 2024 are estimated to contribute close to $38.7 billion ($2.8 billion annually) to Canada’s gross domestic product and to create or maintain approximately 21,400 jobs annually between 2012 and 2025

Key messages

The National Shipbuilding Strategy is about Canadians and Canadian businesses working together to strengthen and renew our Naval and Coast Guard fleets
So far, 10 large vessels and numerous small ships have been delivered, and many more are under construction across Canada
We will continue working closely with industry to manage costs and schedules, and ensure the best value is provided to Canadians throughout the duration of these projects

If pressed on the River-class Destroyer Project:

on March 3, 2025, the Government of Canada awarded the Implementation contract for the River-class Destroyer Project to Irving Shipbuilding Inc., to build the first batch of 3 ships
the River-class Destroyer Project is expected to create or maintain over 5,000 jobs over the next 15 years, many of which will be in Halifax, Nova Scotia
full-rate production on the first ship, His Majesty’s Canadian Ship Fraser, began April 25, 2025

If pressed on the Polar Icebreakers:

the Canadian Coast Guard is acquiring 2 polar icebreakers which will strengthen its icebreaking fleet
they will also support critical scientific research and environmental protection efforts, and ensure national security in the Arctic
this investment enhances Canada’s maritime infrastructure and safeguards our sovereignty in the Arctic
construction of both polar icebreakers is underway. Full-rate production of the future Canadian Coast Guard Ship (CCGS) Imnaryuaq started in July 2025 at Seaspan’s Vancouver Shipyards, while steel cutting for the future CCGS Arpatuuq took place in August 2025 at Davie North Yard Finland Oy, owned by Chantier Davie Canada Inc., marking the start of its construction phase

Background

The National Shipbuilding Strategy is a long-term plan to renew the Royal Canadian Navy and Canadian Coast Guard fleets. It aims to eliminate the boom and bust cycles of vessel procurement that have slowed Canadian shipbuilding in the past. Canadian shipyards involved are Irving Shipbuilding Inc. in Nova Scotia, Seaspan’s Vancouver Shipyards in British Columbia and Chantier Davie Canada Inc. in Quebec.

The River-class Destroyer Project Implementation contract, with an initial value of $8 billion (including taxes) outlines the terms and conditions for the construction and acceptance of the first 3 ships.

Seaspan’s Vancouver Shipyards was awarded a $3.15-billion contract (excluding taxes) to build one polar icebreaker and Chantier Davie Canada Inc. was awarded a $3.25-billion contract (excluding taxes) to build the other polar icebreaker.

The Davie icebreaker will be built using a hybrid domestic-international build strategy, with work split between Davie’s facilities in Quebec and its Finnish shipyard, Davie North Yard Finland Oy. With the evolving global climate, it is essential more than ever that Canada delivers ships to the Canadian Coast Guard in a timely manner so they can continue to work to protect Canadian sovereignty and security.

The National Shipbuilding Strategy continues to evolve and is strengthened by the Icebreaker Collaboration Effort (ICE) Pact, a partnership between Canada, Finland, and the United States that was signed into effect in November 2024. This collaboration seeks to accelerate Arctic and polar icebreaker production, boost the marine industries of all 3 nations, and enhance technical cooperation and information sharing to meet global demand for icebreakers.

Real Property

19. Aligning the office portfolio with workplace presence requirements

Issue

The Government’s decision to increase onsite presence for executives and employees eligible for hybrid work represents a change in direction that affects the Office Portfolio Reduction Plan, which was announced as part of Budget 2024, with implications still under assessment.

Key facts

Public Services and Procurement Canada administers 5.8 million square metres of office facilities, reflecting reductions already implemented, and representing over 25.5% of the total floor area occupied by the Government of Canada
On February 5, 2026, the Government announced its intention to increase the on-site presence of executives and employees who are eligible for hybrid work. As of May 4, 2026, executives will be required to work onsite 5 days per week, and the intention is to have all employees work onsite 4 days a week as of July 6, 2026

Key messages

Workplace presence parameters are established by the Government and led by the Treasury Board of Canada Secretariat, including engagement with bargaining agents
Public Services and Procurement Canada is committed to providing sufficient and functional office space that supports government priorities while ensuring responsible use of public funds
Budget 2024 committed Public Services and Procurement Canada to reducing its office portfolio by 50% over the next 10 years
- in light of increased onsite presence requirements, this reduction target will be adjusted accordingly, and planning to that effect is currently underway
Public Services and Procurement Canada will work with tenant departments and agencies to rapidly deliver efficient solutions by optimizing underutilized space, renewing existing leases, and acquiring additional space where requirements cannot be met within the existing portfolio

If pressed on building condition:

the health and safety of occupants is a priority, and Public Services and Procurement Canada will not accommodate employees in office space that does not adhere to Treasury Board policies or meet applicable health and safety code requirements
Public Services and Procurement Canada is working closely with departments and agencies to ensure workspaces align with operational requirements as on-site presence increases. This includes ongoing collaboration to assess needs, identify practical solutions, and support departments in meeting workplace requirements
- as this work progresses, additional information will be shared
- buildings are continuously monitored and assessed to ensure conditions remain safe, functional, and compliant with legislative and regulatory requirements
where condition issues are identified, mitigation measures are put in place, including repairs or relocation if required within the portfolio
space planning decisions consider building condition alongside operational needs

If pressed on unassigned seating:

the Treasury Board of Canada Secretariat indicated it will engage with bargaining agents to seek their input on implementation elements, including the potential for assigned seating and occupational health and safety
Public Services and Procurement Canada continues to work with departments and agencies to address increased in-office presence requirements and will adjust accommodation solutions as government decisions are confirmed

Background

Public Services and Procurement Canada is responsible for the management of general purpose office space, while departments and agencies remain responsible for specialized facilities such as laboratories and secure operational spaces, and Crown corporations manage their own real property portfolios. In recent years, workplace planning has been informed by a hybrid work model, with employees splitting their time between working remotely and in the office.

The initial Office Portfolio Reduction Plan used to develop the Budget 2024 proposal assumed an average of 2 to 3-day in office presence and unassigned seating by default.

On February 5, 2026, the Treasury Board of Canada Secretariat announced its intention to increase onsite presence for executives and employees eligible for hybrid work, with executives expected onsite 5 days per week by May 4, 2026, and other eligible employees 4 days per week as of July 6, 2026. Implementation discussions with bargaining agents will be led by the Treasury Board of Canada Secretariat.

The February 2026 announcement to further increase onsite presence is expected to place additional pressure on office space requirements and impact Public Services and Procurement Canada’s ability to achieve the savings committed in Budget 2024. Any adjustment to Budget 2024 targets is subject to funding authorities.

Public Services and Procurement Canada remains committed to exploring opportunities for controlling operational costs and will continue working with tenant departments and agencies to optimize the use of office space within the PSPC-administered office portfolio.

20. Build Canada Homes

Issue

Public Services and Procurement Canada is collaborating with Housing, Infrastructure and Communities Canada and the Canada Lands Company to develop a stable, predictable federal land pipeline for Build Canada Homes.

Key facts

On September 2025, the Government launched Build Canada Homes, a new federal agency that will build affordable housing at scale. Build Canada Homes’ mission is to build and finance more affordable homes, while catalysing a new housing industry
In August 2024, Public Services and Procurement Canada launched the Canada Public Land Bank which currently lists 88 properties available for housing development
These properties have the potential for approximately 42,500 housing units on a total of 463 hectares of land across Canada

Key messages

Budget 2025 reorients how the Government delivers infrastructure funding to support needs across the country by shifting toward a long term, investment driven approach that integrates housing and infrastructure planning
By leveraging public lands, deploying flexible financial tools, and acting as a catalyst for modern methods of construction, Build Canada Homes is driving a more productive and innovative homebuilding sector
As one of the largest federal custodians of real property, Public Services and Procurement Canada is leveraging its surplus and underutilized public lands to support government priorities, such as affordable housing
Public Services and Procurement Canada is taking action to accelerate federal property disposal to enable the creation of new homes where Canadians need them most

Background

Budget 2024 aimed to unlock 250,000 units by leveraging surplus and underutilized public lands across the country by 2031.

Public Services and Procurement Canada has facilitated the disposal of federal lands by launching the Canada Public Land Bank website, the Government of Canada's official online inventory of surplus and underutilized federal properties. There are currently 88 properties listed, representing the potential for approximately 42,500 housing units on a total of 463 hectares of land across Canada.

Other

21. Summary of Budget 2025 announcements specific to Public Services and Procurement Canada

In Budget 2025, the government unveiled over $141.4 billion in new spending (offset by $51.7 billion in projected savings) over the next 5 years with a focus on: building a stronger Canadian economy; shifting from reliance to resilience; empowering Canadians; protecting Canada’s sovereignty and security; and creating a more efficient and effective Government.

Funding, and other announcements, for Public Services and Procurement Canada (PSPC) include:

Becoming our own best customer

Budget 2025 proposes to provide $98.2 million over 5 years, starting in 2026 to 2027, and $9.8 million ongoing to PSPC and $7.7 million over 3 years, starting in 2026 to 2027, to the Treasury Board Secretariat to support the implementation of the new Buy Canadian Policy

Rebuilding, rearming, and reinvesting in the Canadian Armed Forces

Budget 2025 proposes $805 million over 5 years to the Canadian Coast Guard, the Canadian Security Intelligence Service, and PSPC for complementary initiatives to support Canada’s defence capabilities

A new Defence Investment Agency

Budget 2025 proposes to provide PSPC with $30.8 million over 4 years, starting in 2026 to 2027, with $7.7 million ongoing to establish the DIA. The DIA will accelerate the delivery of goods and services to better meet the needs of the CAF at the best value for Canadians by centralising processes and enhancing engagement and collaboration with Canadian industry and international partners. The Agency’s focus will be on defence procurements valued at $100 million and above, including submarines and other critical capabilities that the CAF requires
Budget 2025 proposes to provide PSPC with $52.5 million over 5 years, starting in 2026 to 2027, with $12.2 million ongoing to modernise and increase capacity for the Industrial Security Program to meet the needs of the DIA and support Canada’s defence industry

Comprehensive Expenditure Review (Public Services and Procurement Canada specific)

To meet up to 15% in savings targets over 3 years, PSPC will:

undertake strategic realignments to reduce ongoing costs to operate programs and efficiently deliver services as a common service provider for the government
reduce ongoing costs for its Real Property Revolving Fund, by focusing on core mandates, modernising operations, and reducing duplicative functions
wind down activities of the Canada General Standards Board, as this optional service will be better served via alternative organizations given that there are 15 other accredited Standards Development Organizations operating in Canada
reduce funding to pilot and innovation projects for Laboratories Canada
review its internal processes to reduce administrative requirements, and delayer management
advance digital delivery of procurement-related documents and better manage project delivery, and reduce spending on professional services and travel
implement the use of AI chat bots and self-service tools to improve service delivery

These measures to enhance efficiency will support PSPC’s delivery of the Buy Canadian Policy, as announced by the Prime Minister on September 5, 2025.

To support the increased workflow at the Government of Canada Pension Centre from administering this time-limited program:

budget 2025 proposes to provide PSPC with $15.0 million over 2 years, starting in 2025 to 26

Budget 2025 also included decisions that were provided to PSPC since the Fall Economic Statement:

Support for Cape Breton Operations in managing legacy liabilities

Budget 2025 proposes to provide PSPC with $18 million over 5 years

Price and volume protection for federal real property

Budget 2025 proposes to provide PSPC with $146 million over 2 years

Improving the Government’s Pay Administration

Budget 2025 proposes to provide PSPC, Treasury Board Secretariat and the Public Service Commission with $1.59B billion over 2 years

Additional funding decisions related to sunsetting programs are expected at a later date.

Other announcements of note for that will likely impact/implicate PSPC include:

Comprehensive Expenditure Review (other considerations)

Budget 2025 proposes to amend the Public Service Superannuation Act and the Income Tax Regulations to offer a voluntary Early Retirement Incentive (ERI) program through the Public Service Pension Plan. Public servants at age 50 or above for Group 1 and age 55 or above for Group 2 who have at least 10 years of employment, with at least 2 years of pensionable service in the Plan may apply to participate under parameters set by Treasury Board. These parameters will be designed to maintain essential services and business continuity. Eligible employees will be able to retire with an immediate pension based on years of service with no penalty for early retirement. Implementation would proceed by January 15, 2026, or when legislation receives Royal Assent, and the government intends to conclude the ERI process within one year. This program, which will be sourced from the Public Service Pension Fund, is estimated to have a net fiscal impact of $1.5 billion over 5 years, starting in 2025 to 2026, while providing ongoing savings of $82.0 million annually
As the size of the public service adjusts, so too, must the leadership. The government will reduce the executive cadre in the public service by 1,000 positions overall over the next 2 years, inclusive of positions reduced through CER and early retirements
The government will also reduce expenses on management and other consulting services by 20% in 3 years’ time – in order to reduce wasteful spending and empower the public service to take on more responsibility and accountability
In the coming weeks, participating organizations will be communicating these measures to their employees and collective bargaining agents. The federal government will continue to identify more efficiencies and potential savings, which will be communicated in the 2026 to 2027 Main Estimates and Departmental Plans
To improve its efficiency, ESDC will reduce its real property portfolio by decreasing general office space
DND will readjust its real property portfolio through divestment of underutilized, obsolete or surplus assets. Where appropriate, divested assets may be repurposed by other levels of government or the private sector, creating additional public value

Optimizing Productivity in Government

As emerging technologies like AI continue to advance, the government intends to be at the forefront in their adoption and build and rely on the skills we have in the public service. Budget 2025 announces that going forward, the government will:

improve expenditure management by adopting a regular, predictable review schedule to ensure continuous optimization of resources. Future reviews will focus on specific horizontal themes, such as consolidating the administration of programs, fostering AI implementation and scale-up in the public service, and reviewing business subsidies and skills programming
to demonstrate the government’s commitment to restraining the growth in day-to-day operating spending, it is targeting additional savings of $7.75 billion over 3 years, starting in 2027 to 2028, and $3.25 billion ongoing. Results will be reported on in Budget 2026

Adopting Artificial Intelligence to enhance productivity and improve services

Budget 2025 announces that the government intends to stand up an Office of Digital Transformation which will proactively identify, implement, and scale technology solutions across the federal government—a generational opportunity for domestic innovators. The Office will identify and eliminate redundant and counterproductive procurement rules as well as leverage expertise from internal sources and the private sector to hasten AI adoption
Budget 2025 also announces that Shared Services Canada, in partnership with the Department of National Defence and the Communications Security Establishment, will develop a made-in-Canada AI tool that can be deployed across the federal government. Shared Services Canada will partner with leading Canadian AI companies to develop this internal tool. By supporting innovative research to strengthen public services, this work will protect our digital sovereignty, keep government data and information safe in Canada, and create opportunities for the Canadian technology sector

Becoming our own best customer

Budget 2025 also proposes to provide $79.9 million over 5 years, starting in 2026 to 2027, to Innovation, Science and Economic Development Canada to support the new Small and Medium Business Procurement Program

Amendments to the Canada Post Corporation Act

In Budget 2025, the government proposes to amend the Canada Post Corporation Act to modernise and expedite the stamp rate-setting process by allowing Canada Post Corporation to set postage rates

Modernising limits on borrowing and portfolio investments

In Budget 2025, the government proposes to make amendments to the Bank Act, Insurance Companies Act, and Trust and Loan Companies Act to repeal provisions relating to certain technical limits found in these statutes and replace them with more flexible Office of the Superintendent of Financial Institutions (OSFI) guidance, including limits on borrowing and portfolio investments in commercial loans, real property and equity

Build Canada Homes

In Budget 2025, the government proposes to introduce legislation establishing a statutory appropriation of up to $11.5 billion on a cash basis to defray costs related to Build Canada Homes and a statutory appropriation of up to $1.515 billion on a cash basis to capitalise Canada Lands Company Ltd to support housing construction on properties held by the corporation. The Government also proposes to introduce legislation establishing the final organisational form of Build Canada Homes

Enhancing access to funds deposited by cheque

In Budget 2025, the government proposes to amend the Bank Act to increase the first amount immediately available to consumers from a deposited cheque to $150 and eliminate the distinction between cheque funds deposited in person or via other means

Collective bargaining in good faith

In Budget 2025, the government proposes to amend the Federal Public Sector Labour Relations Act to adjust the collective bargaining dispute resolution framework. This will ensure the government can attract and retain the necessary talent for a high-performing public service to meet the needs of Canadians, while respecting Canada’s fiscal circumstances relative to its stated budgetary policies and objectives

Government efficiencies

In the spirit of the 60-day regulatory review, the government further intends to introduce a variety of targeted amendments to legislation in order to increase government efficiency and operational effectiveness. This includes amendments that would streamline low-risk internal processes, modernise outdated requirements, eliminate unnecessary and burdensome reporting requirements, remove unnecessary barriers to agile regulation-making, align legislative and regulatory authorities across government and provide for the delegation of certain matters where appropriate. Results of this review will be available in Budget 2026

Attracting private sector expertise to the public service

There is a need to bring in talent and perspectives from outside the government into the public service at speed and scale. To this end, the government is announcing that the Interchange Canada program will be rebranded as the Build Canada Exchange, with an ambitious, immediate-term goal of integrating 50 external leaders in technology, finance, science, and other sectors into the public service

Establishing a Financial Crimes Agency

In Budget 2025, the government proposes to create a new Act, with consequential, coordinating, and transitional amendments to other statutes that may be required, to establish a Financial Crimes Agency, which would be Canada’s lead enforcement agency against financial crime

Critical Minerals Sovereign Fund

In Budget 2025, the government proposes to introduce legislation or amend existing legislation in order to create a Critical Minerals Sovereign Fund to make equity investments, provide loan guarantees, and enter into offtake agreements for critical minerals projects and companies

Legislative amendments to the Red Tape Reduction Act

In Budget 2025, the government proposes to amend the Red Tape Reduction Act to provide all federal ministers with the authority to enable regulatory sandboxes through issuing temporary and limited exemptions from legislative or regulatory requirements to allow for testing of products, services, processes, or new regulatory approaches

Amendments to the Building Canada Act

In Budget 2025, the government proposes to amend the Building Canada Act to add to the information that must be included in the public registry of national interest projects the extent to which each project can contribute to clean growth and to meeting Canada’s objectives with respect to climate change

Canada Infrastructure Bank

In Budget 2025, the government proposes to amend the Canada Infrastructure Bank Act to increase the statutory appropriation limit for the Canada Infrastructure Bank from $35 billion to $45 billion

Building one Canadian economy

In Budget 2025, the government proposes to introduce legislation to give the Major Projects Office greater independence and managerial flexibility to facilitate its work to advance major projects and streamline federal regulatory project approval

Adopting a capital budgeting framework

This framework helps distinguish day-to-day operational spending from capital investment (broadly defined as spending that supports capital formation), allowing the government to identify and prioritise initiatives that deliver long-term economic returns. The framework also increases transparency, allowing Canadians to better understand what funds services today, and what builds future prosperity
Capital investments, for the purposes of the framework, are defined broadly as any government expenditures or tax incentives that contribute to public or private sector capital formation, held directly on the government’s balance sheet or on that of a private sector entity, Indigenous community or another level of government. Within this broad definition, the focus is on capital investments that meet the following criteria:
- conditionality – whether the funding recipient is required to invest in capital formation to receive the benefit
- clear linkage – whether the spending encourages or enables capital investment in identifiable sectors or projects

Page details

2026-06-22

Standing Committee on Government Operations and Estimates: March 12, 2026

On this page

General items

1. Opening statement

2. Public Services and Procurement Canada and the portfolio’s 2025 to 2026 Supplementary Estimates (C) overview

Voted appropriations: $39.6 million increaseFootnote i

Funding for government advertising programs (Budget 2025) (horizontal item)

Purpose of funding

Funding for accommodation costs related to pension administration

Purpose of funding

Funding for the Public Lands for Homes Plan (Budget 2024)

Purpose of funding

Funding to establish a Joint Transition Office to support defence procurement reforms (Budget 2025)

Purpose of funding

Statutory appropriations: $1.5 million increase

Contributions to employee benefit plans

Purpose of funding

Net transfers between government departments: $1.9 million net increaseFootnote ii

From the Department of Foreign Affairs, Trade and Development and Shared Services Canada to the Department of Public Works and Government Services for the Presidency of the 2025 G7 Summit in Canada

Purpose of funding

From the Department of Public Works and Government Services to the Department of Crown-Indigenous Relations and Northern Affairs for Canada’s Devolution obligations in Nunavut

Purpose of funding

Purpose of funding

From various organizations to the Treasury Board Secretariat to support the Digital Comptrollership Program

Purpose of funding

Canada Post and National Capital Commission 2025 to 2026 Supplementary Estimates (C) overview

Canada Post

Purpose of funding

National Capital Commission

Purpose of funding

Key Issues

3. Procurement process for official language interpretation services and new request for standing offer

Issue

Key facts

Key messages

Background

4. Old Age Security payment issues

Issue

Key facts

Key messages

Background

5. Annual Report on Government of Canada Advertising Activities

Issue

Key facts

Key messages

Background

Stakeholder Roles in Advertising

Privy Council Office

Treasury Board of Canada Secretariat

Public Services and Procurement Canada

Institutions

Government Transformation

6. Red Tape Reduction Measures

Issue

Key facts

Key messages

Background

7. Canada Post Transformation

Issue

Key facts

Key messages

Background

8. Canada Post financial stability

Issue

Key facts

Key messages

Background

9. Update on the move to Dayforce

Issue

Key facts

Key messages

Background

Dayforce

Overpayments

Status of the backlog

Procurement

10. Spending on professional and special services

Issue

Key facts

Key messages

Voted appropriations: $39.6 million increase^{Footnote i}

Net transfers between government departments: $1.9 million net increase^{Footnote ii}