President of the Treasury Board Appearance at the Standing Committee on Government Operations and Estimates (OGGO) – Supplementary Estimates (C) 2025-26 – March 2026

Expenditure Management

1. Comprehensive Expenditure Review
2. Supplementary Estimates (C) 2025–26
3. Main Estimates 2026–27
4. TBS’s Departmental Plan 2026–27

Procurement

5. Procurement and use of consultants

Public Service Issues

6. Reductions in the public service
7. Early Retirement Incentive program
8. Reduction of executive positions in the public service
9. Performance pay for executives
10. Integrity of the public service (non-partisanship, values and ethics, conflicts of interest)
11. Early pension eligibility for safety and security workers
12. Public Service Pension Fund (non-permitted surplus)
13. Hybrid work in the public service
14. Official languages in the public service and the implementation of the Official Languages Act
15. Whistleblower protection
16. Public service productivity

Regulatory Affairs

17. Red Tape Review
18. Regulatory sandboxes

Digital Government

19. AI in the public service

Access to Information & Privacy

20. Access to information

Other Issues

21. Greening Government
22. Risk and Compliance Process
23. Government of Canada advertising
24. Bill C‑230 (Debt Forgiveness Registry)
25. Office of the Auditor General of Canada report: Modernizing the Pay System
26. Key issues

Issue

Can you provide an update on the Comprehensive Expenditure Review (CER)?

Response

The Government of Canada is committed to spending less on government operations to invest more in our country and grow our economy.

Budget 2025 introduced long-term savings through the CER, with reductions beginning in 2026–27 to ensure fiscal sustainability.

The review will achieve savings of $9 billion in 2026–27, $10 billion in 2027–28 and $13 billion in 2028–29.

Savings are coming from programs and activities that were underperforming, not core to the federal mandate, duplicative, or misaligned with priorities.

If pressed on impacts on Canadians

The CER required the government to make challenging but responsible choices to ensure that spending is cost-effective and delivers results for Canadians.

Savings are drawn from efficiencies as well as programs and activities that are no longer needed or aligned with the federal mandate.

If pressed on job loss:

To manage reductions to the greatest extent possible through voluntary departures, Budget 2025 proposes to offer an Early Retirement Incentive program through the Public Service Pension Plan.

Questions and answers

Question: Will Library and Archives Canada reductions mean it can no longer meet its access to information and privacy (ATIP) obligations?

Answer: As part of Library and Archive Canada’s savings, the department is winding down temporary ATIP activities that were focused on backlog management and the processing of specific, large ATIP requests. The department has confirmed that it has sufficient resources to maintain its core ATIP functions and responsibilities going forward.

Question: Through the Parliamentary Budget Officer’s reporting, organizations said that their reductions will have minimal to no impact on service. How is it possible to cut up to 15% of a department’s budget and have no impact?

Answer: A core objective of the CER was making sure that government organizations are focusing on core priorities.

Each organization was responsible for identifying savings by examining programs and activities that were underperforming, not core to the federal mandate, duplicative, or misaligned with government priorities. Therefore, reducing or eliminating in these areas would not be expected to lead to noteworthy impacts on services important to Canadians and core to organizations’ mandates. In addition, in many cases, savings were the result of restructuring of operations and internal efficiencies, which would not directly impact services.

Question: Are any cuts being made to front-line staff at the Canada Border Services Agency and the Royal Canadian Mounted Police?

Answer: No. In fact, both organizations are in the process of increasing front-line staff by 1,000 positions, respectively.

Question: Are there any safeguards in place to prevent employees who opt to leave the public service from returning as consultants?

Answer: In most situations, a former public servant contracting with the government is not an issue, provided that the contract is in the public interest and the contracting process is carried out in a manner that bears the closest public scrutiny.

That said, we do not envision seeing a significant number of such situations following current public sector reductions. Reduced budgets will result in reduced spending going forward, and Budget 2025 announced that the government will reduce expenses on management and other consulting services by 20% over the next three years.

Background

On July 7, 2025, the President of the Treasury Board and the Minister of Finance launched the CER by sending a letter to all ministers.

Organizations were required to submit, by August 28, saving proposals totalling up to 7.5% in 2026–27, 10% in 2027–28 and 15% in 2028–29 of their review base (that is, voted operating and transfer payment budget as per the Main Estimates 2025–26).

Organizations were directed to target programs and activities that are underperforming, not core to the federal mandate, duplicative, or misaligned with government priorities.

The Cabinet Committee on Government Transformation / Government Efficiency (GTGE) was responsible for reviewing department proposals and for making recommendations to the Prime Minister.

Savings across departments and programs vary, reflecting the need to protect the important mandates that some organizations have in delivering front-line services, social programs, and priorities such as defence and security.

• National Defence’s, the Royal Canadian Mounted Police’s and the Canada Border Services Agency’s annual savings target was set at 2% of the review base. Given their essential role in keeping our country safe, this approach is also being taken with the Canadian Security Intelligence Service and Communications Security Establishment Canada.
• A resilient Canadian economy needs to advance research and attract and retain the top research talent to supercharge our growth. Recognizing this priority, the targets of the Natural Sciences and Engineering Research Council of Canada, the Social Sciences and Humanities Research Council of Canada, and the Canadian Institutes of Health Research are also being set at 2% to protect the councils’ important contributions in improving our global competitiveness and contributing to the economy of the future.
• Women and Gender Equality Canada (WAGE) empowers women and 2SLGBTQI+ people through programs to eliminate discrimination and advance the rights of women and 2SLGBTQI+ communities. To support WAGE in continuing this critical work, its annual savings target is being set at 2% of its review base.
• The government remains committed to reconciliation. Crown-Indigenous Relations and Northern Affairs Canada and Indigenous Services Canada deliver important programs that are legally or constitutionally required, including child and family services, primary health care, and essential community infrastructure. To protect these important programs, the annual savings target for these organizations was set at 2% of their respective review base.

Budget 2025 includes high-level information about the proposed savings measures (Chapter 5) as well as more detailed information on planned reductions by organization (Annex 3).

The Main Estimates also reflect savings approved under the government’s CER. Departmental Plans also provide additional details on the CER.

The Treasury Board of Canada Secretariat’s (TBS’s) Departmental Plan notes that to meet the savings requirements of the CER, TBS will be reducing its spending by $57.8 million by 2028–29. It will achieve these savings by winding down temporary programs and initiatives, streamlining work, and focusing on priorities that strengthen the public service.

Issue

What is included in the Supplementary Estimates (C) 2025–26?

Response

With Supplementary Estimates (C) 2025–26, the government is seeking Parliament’s approval for $5.4 billion in new voted spending.

This is offset by a decrease of $1.4 billion in statutory spending, for a total of $4.0 billion in planned expenditures to support core priorities for Canadians.

The proposed funding would strengthen Canada’s military by supporting key capabilities and advancing major capital projects such as the Strategic Tanker Transport Capability Aircraft project.

It would help modernize equipment and facilities, notably by providing funding to Canadian Armed Forces Northern operations.

It would also enhance essential services for Indigenous Peoples and veterans, including child and family services for First Nations and medical travel support in Northern communities.

If pressed on new spending for TBS:

New funding for my department would support urgent defence and security needs through the new Vote 50 and would cover mandatory employee payments and recent compensation adjustments.

Additional program funding would advance government‑wide initiatives, including digital comptrollership, emissions‑reduction projects and Pay Equity Act obligations.

Questions and answers

Question: Your government claims to be committed to fiscal restraint, so how do these Supplementary Estimates compare to last year’s in terms of total spending?

Answer: The Supplementary Estimates (C) bring the total budgetary authorities in 2025–26 to $510.7 billion. This is an increase of 0.8% in budgetary spending for 2025–26 and an increase of $24 billion, or 4.9%, over the previous year’s estimates to date at the same point. Note that no Supplementary Estimates (C) were introduced in 2024–25 due to prorogation of Parliament.

Question: What is the new Central Vote50 and how will it work?

Answer: Treasury Board Central Vote 50 is being proposed for government contingencies specifically related to defence and security spending.

The new central vote would operate in a similar fashion to Treasury Board Central Vote 5. Central Vote 50 provides authorities that are urgently required before the next supply process is completed. Authority to access the funds would require Treasury Board approval. To provide transparency, allocations from this fund would be published in the next Supplementary Estimates or year-end reporting.

Both National Defence and other federal organizations involved in defence and security would be able to access the vote.

Question: How will Parliament review proposed spending against this vote?

Answer: Treasury Board Central Vote 50 is being proposed for government contingencies specifically related to defence and security spending that are urgently required before the next supply process is completed.

Authority to access the funds would require Treasury Board approval. To provide transparency, allocations from this fund would be published in the next Supplementary Estimates.

Question: How much professional services spending is proposed in these supplementary estimates, and for what?

Answer: Supplementary Estimates (C) shows planned spending of approximately $371 million on professional services.

Two organizations have the bulk of planned professional services spending:

• National Defence: $221.1 million – The funding is mostly for engineering and architectural services for capital projects, including the Strategic Tanker Transport Capability project and projects to procure or improve equipment, systems and facilities as part of the Capital Investment Fund
• Immigration, Refugees and Citizenship Canada: $90.7 million – The increase in professional and special services in the Supplementary Estimates (C) relates primarily to business services for the Passport Program to maintain processing capacity and informatics services related to digital platform modernization, including enabling clients to access services online and moving to a modern case management platform.

It’s important to note that professional and special services is a broad category of spending that encompasses many services, for example:

• accountants, lawyers, engineers, scientists and translators
• doctors, nurses and other medical personnel
• management and other research consultants
• outside technical, professional and other expert assistance, for example, engineering and architectural work
• payments for hospital treatments
• other operational and maintenance services performed under contract, such as cleaning of buildings, storage and warehousing

Background

Issue

What is included in the Main Estimates 2026–27 for TBS and for the government as a whole?

Response

Each year, the government seeks Parliament’s approval for planned spending and provides Canadians with information through the Estimates process.

The 2026–27 Main Estimates outline $502.8 billion planned in budgetary spending.

This includes $300 billion in transfer payments, which help build a stronger and more resilient Canada. This funding supports priorities such as elderly benefits, the Canada Health Transfer, infrastructure projects, and fiscal equalization across provinces and territories.

The Estimates also include over $48 billion to support National Defence. These investments support modern equipment, training and cooperation with international partners, helping keep Canadians safe and contributing to global stability.

If pressed on spending for TBS:

My department is seeking $11.8 billion in the Main Estimates. The vast majority of this amount is for government-wide costs, such as public service insurance and government contingencies.

The Main Estimates also include $1 billion for central Vote 50, which gives government flexibility to respond quickly to unforeseen defence and security pressures.

TBS’s operating budget for 2026–27 includes a reduction of $28.9 million as a result of the CER. TBS’s annual savings will reach $57.8 million annually by 2028–29.

Questions and answers

Question: The Main Estimates show planned spending of over $26.6 billion on professional services. How do you justify this expense while at the same time reducing the size of the public service as outlined in Budget 2025?

Answer: Proposed allocations for professional services support a range of important initiatives. For example, they would be used to deliver:

• health and welfare services provided under the Interim Federal Health Program
• services for Canadians under Benefits Delivery Modernization
• construction, engineering and architectural services
• health and welfare services for Indigenous Canadians

Professional services will continue to play an important role for the government to deliver on its mandate. At the same time, the government is committed to reducing expenses on management and other consulting services by 20% in three years’ time in order to reduce spending and empower the public service to take on more responsibility and accountability.

Question: Budget 2025 announced savings of $9 billion in 2026–27, yet these Main Estimates are much higher than last year. How is this possible?

Answer: There has been a rise in planned spending on various priorities, notably increases in defence planned spending to reach Canada’s NATO targets, transfers to provinces for health care and social programs, and benefits to individuals such as elderly benefits to meet the growing needs of the Canada’s population.

Question: What specific programs have seen an increase?

Answer: Inflation and adjustments for the cost of living have also driven up the costs of various government programs and services, as well as the amount of benefits paid to individual Canadians. Additionally, the government has launched new programs over the past decade, including disability benefits, housing and infrastructure programs.

Increased authorities are also sought for settlement claims and investments in First Nations communities.

As the government makes investments in priority areas, it is decreasing spending on day-to-day government operations. Through the CER, $9 billion of savings will be realized in 2026–27, and this will reach $13 billion annually by 2028–29. This includes a reduction in the size of the public service, which is expected to decrease by 40,000 positions by 2028–29 from peak levels in 2023–24.

Background

Issue

What kind of performance targets are in TBS’s 2026–27 Departmental Plan?

Response

TBS’s 2026–27 Departmental Plan lays out concrete actions TBS is taking to modernize government, reduce red tape and improve services for Canadians.

We are advancing key priorities, such as cutting regulatory burden, strengthening internal trade, deepening regulatory cooperation, implementing the Buy Canadian Policy, and accelerating responsible artificial intelligence (AI) across government.

My department will meet its CER target. This means reducing spending by $57.8 million by 2028–29 by winding down temporary initiatives and streamlining operations.

These actions support the government’s commitment to spend less on operations so Canadians and businesses can drive economic growth.

Questions and answers

Question: Are there significant changes in the TBS Departmental Plan from last year?

Answer: This plan details TBS efforts to advance the government’s current priorities. It places greater emphasis on things such as bringing down costs for Canadians and spending less on government operations, including leading the government-wide CER.

TBS’s Departmental Plan also incorporates key government initiatives, including reducing regulatory burden, accelerating responsible AI adoption within the federal public service, and supporting the implementation of the new Buy Canadian Procurement Policy Framework.

Question: How are the actions being taken through the CER reflected in the TBS Departmental Plan?

Answer: As a department, TBS’s Departmental Plan reflects a reduction of more than $125 million over three years and a decrease of approximately 294 full-time equivalents by 2028–29.

TBS will achieve these reductions by focusing on its priorities, rethinking how it works and winding down temporary programs. TBS will transform its internal operations by consolidating work units, right-sizing management and administrative support, and modernizing key processes. This includes leveraging automation to drive consistency, scalability and service excellence across the organization.

Question: What CER-related information will be available in 2026–27 Departmental Plans?

Answer: Departmental Plans include specific measures that departments are planning to undertake and the number of budget and full-time equivalent (FTE) staff reductions over a three-year period. Departments that were not subject to the CER have also been asked to explain what measures they will take to respect the spirit of this reductions exercise. In situations where identifying FTE reductions might create privacy concerns, notably in small organizations, details do not need to be provided.

Background

TBS’s 2026–27 Departmental Plan outlines how TBS will deliver on its mandate to support effective government, foster innovation and uphold public service values. In particular, it provides details on TBS’s priorities, plans and associated costs for the upcoming three fiscal years.

The plan highlights how TBS will help advance key government initiatives announced over the past year by the President of the Treasury Board and those announced in Budget 2025. For example, it notes that TBS will be:

• advancing cross-jurisdictional cooperation to reduce trade barriers within Canada
• deepening Canada’s regulatory alignment with the European Union through the new Canada-EU Strategic and Defence Partnership
• using horizontal reviews to identify ways to reduce regulatory burden and streamline processes, as well as getting products to market faster
• reviewing key regulatory policy instruments and related legislation to remove red tape in the federal regulatory system
• supporting the government in adopting a more regular and predictable review schedule to ensure government resources are continuously optimized
• accelerating responsible AI adoption within the federal public service
• supporting implementation of the new Buy Canadian Policy

This year’s plan includes a new central vote (Vote 50) has been added to TBS’s budget. The new vote allows TBS to transfer funds from the vote to National Defence to cover unforeseen expenditures related to national defence or national security. As with the other six central votes managed by TBS, any funds in Vote 50 that are not allocated during the year will lapse at the end of the fiscal year.

The plan also notes that to meet the savings requirements of the CER, TBS will be reducing its spending by $57.8 million by 2028–29. It will achieve these savings by winding down temporary programs and initiatives, streamlining work, and focusing on priorities that strengthen the public service.

Issue

What is being done to ensure the contractors are being used prudently?

Response

I expect all spending to be well managed and directed to priorities that provide value for Canadians.

The use of professional and special services is a normal part of government operations.

Very little of what the government spends goes to management consultants, and in 2025, spending on management consulting and IT services decreased by 10%.

Professional and special services are mostly used for specialized expertise and capacity needed to advance key priorities.

For example, the government uses contracting to hire construction firms to build and maintain various assets, secure nurses for health care in the North, and manage contaminated sites across the country.

If pressed on IT contracting:

While contracting for IT services is sometimes necessary, we are focused on building our own digital workforce.

Through our Digital Talent Strategy, we are investing in skills development and training so the federal public service has the in-house talent needed to deliver secure and efficient digital services.

If pressed on measures being taken to improve procurement:

To strengthen procurement oversight, the government has:

• updated the manager’s guide and introduced new mandatory procedures for procuring professional services
• published the Directive on Digital Talent to support the development of a robust internal digital workforce, establishing reasonable thresholds for departments to ascertain whether qualified talent is available before contracting out
• completed a horizontal audit to evaluate governance, decision-making and contracting controls; the audit found that we have processes in place to manage and oversee procurement, in compliance with roles, responsibilities and accountabilities
• developed a new Risk and Compliance Process to assess controls and risk in procurement and other key administrative areas, which was launched in June 2025

Questions and answers

Question: Can you provide details on your government’s plan to reduce expenses on management and other consulting services by 20% over the next three years?

Answer: Plans to achieve this reduction are being finalized and will be shared as soon as possible.

This reduction will build on progress already made. For example, expenditures on management consulting last year saw a decrease in total spending of 46% ($837,842,000 in 2024 versus $449,824,000 in 2025).

The public service continues to look at internal resources as a preferred option before seeking external help. To support this focus, we are advancing talent management and workforce strategies to help build internal capacity. As well, we have strengthened oversight and governance in procurement to ensure that contracting decisions remain appropriate and cost‑effective.

Question: Why are you spending billions on management consultants?

Answer: Professional services is a broad category of spending that includes a range of services, including construction, translation and health care.

Annually, management consultants make up a very small percentage – less than 5% – of all professional services spending.

All public servants are expected to ensure that spending is prudent and directed to priorities that provide value for Canadians.

Background

Contracted services have always been an important part of how the government delivers programs and services to Canadians. For example, professional services might be needed to acquire special expertise, meet unexpected fluctuations in workload, or complement the work of the professional public service.

“Professional and special services” is a broad category of the Public Accounts that includes a wide range of services such as engineering and architectural services, legal services, and health and welfare services, among others. It represented less than 5% of the total government expenditures in 2025.

The increase in professional services expenditures compared to last year is largely attributable to increases in engineering and architectural services for National Defence, Fisheries and Oceans Canada, the Canadian Space Agency, health and welfare services, and other services for specialized training services.

Since April 2024, the government has taken a number of concrete actions to strengthen procurement oversight and reduce departments’ use of management and IT consultants, including:

• updated the manager’s guide and introduced new mandatory procedures for procuring professional services
• published the Directive on Digital Talent to support the development of a robust internal digital workforce, establishing reasonable thresholds for departments to ascertain whether qualified talent is available before contracting out
• completed a horizontal audit to evaluate governance, decision-making and contracting controls, and took concrete actions to enhance mechanisms to identify procurement-related risks and non-compliance through a new Risk and Compliance process
• developed a Risk and Compliance Process to assess controls and risk in procurement and other key administrative areas, which was launched in June 2025

Issue

Is the government laying off employees across the public service?

Response

The government has committed to returning the public service to a more sustainable size. The CER will reduce the public service by 16,000 full-time equivalents by 2028–29, bringing the size of the public service to roughly 330,000.

The government is committed to managing reductions through voluntary departures and attrition to the greatest extent possible. The proposed Early Retirement Incentive will support this goal.

We will ensure that employees affected by workforce adjustment are treated fairly in accordance with their collective agreements, terms and conditions of employment, and the Values and Ethics Code for the Public Sector.

Questions and answers

Question: How many public servants are currently subject to workforce adjustment measures, broken down by department and region?

Answer: To support transparency, TBS has made available on its website a detailed breakdown of workforce reductions announced by organizations to date. This information will be updated regularly as employees are notified.

Question: How much are workforce adjustment measures expected to cost the government?

Answer: The cost per employee will depend on factors such as years of service and the option each individual employee selects under the applicable workforce adjustment measures in their respective organizations. As such, we are not in a position to provide an overall estimate at this time.

Background

In Budget 2025, the government committed to bringing the federal public service back to a more sustainable level of about 330,000 employees, down from approximately 369,000 in 2023–24, for a total reduction target of roughly 40,000 positions.

Reductions began in 2024–25 with a decrease of about 9,800 employees due to the Refocusing Government Spending initiative and attrition. Additional reductions are expected in 2025–26 because of attrition and funding that has not been renewed (exact figures will be available following the end of the fiscal year).

Over the next three years, the CER is expected to reduce the size of the federal public service by an estimated 16,000 full-time equivalents. When combined with natural attrition and voluntary departures, these measures will collectively bring the public service down to the target of approximately 330,000 employees.

When departments face budget reductions and must reduce their expenditures, they will generally complete a human resources analysis and consider ending non-permanent staffing, such as contracts, term employees, casual workers and students. As needed, departments may consider full-time permanent employees.

The Work Force Adjustment Directive and workforce adjustment appendices which form part of collective agreements outline the provisions for workforce adjustment for indeterminate employees.

Executives are subject to the career transition appendices E, F and G of the Directive on Terms and Conditions of Employment for Executives, which facilitate the career transition of executives in a workforce reduction situation.

The workforce adjustment provisions can be used when:

• the services of one or more indeterminate employees will no longer be required beyond a specified date due to a lack of work
• there is a discontinuance of a function
• a relocation of a work unit in which the employee does not wish to participate, or
• an alternative delivery initiative

For executives, career transition provisions can be used when there is a:

• lack of work
• discontinuance of a function, or
• transfer of work or a function outside those portions of the federal public administration named in Schedule I, IV or V to the Financial Administration Act

The aim is to ensure that indeterminate employees whose services are no longer required because of a workforce adjustment situation are, wherever possible, provided with alternative employment opportunities.

In the case of non-executive employees, the department will confirm to an employee if they will:

• receive a guarantee of a reasonable job offer at the same level and skill set within the core public administration, or
• be provided four options:
  1. Option A: 12-month surplus priority entitlement – they will be referred to public service jobs
  2. Option B: Transition Support Measure – lump-sum payment in exchange for resignation
  3. Option C(i): Transition Support Measure and an education allowance
  4. Option C(ii): Transition Support Measure, an education allowance and up to two-year leave without pay

One of the key provisions under the workforce adjustment provisions is that organizations must establish a voluntary departure program for a minimum of 30 days in work units with five or more employees at the same group and level who are notified that their services may no longer be needed. Departments may also choose to offer the voluntary departure program to smaller groups of affected employees. This allows public servants who wish to depart to do so and reduces the number of involuntary departures. These voluntary departure programs can only be initiated once employees receive a notice that their position may be affected.

For executives, the department will plan and leverage mobility provisions (for example, agreement to being deployed is a condition of their employment). And where a career transition situation exists, the department notifies the executive of their timelines and two options:

• Option 1: Leave the core public administration and seek employment elsewhere, or
• Option 2: Seek continuing employment in the core public administration

Data on workforce reductions in the core public administration is available on Canada.ca. Information for certain departments is not yet presented as these institutions are still finalizing the implementation of their reductions. This data will be updated on a regular basis as these phases are completed and as additional information becomes available.

Issue

When will the government implement the Early Retirement Incentive (ERI) program announced in Budget 2025, and how will it help manage workforce reductions?

Response

Budget 2025 identified savings that will contribute to returning the size of the public service to a more sustainable level of roughly 330,000 employees.

To manage these reductions to the greatest extent possible through voluntary departures, Budget 2025 proposes a temporary ERI program.

This program would be funded from the Public Service Pension Plan and designed to maintain essential services and business continuity.

The implementation of this program is subject to parliamentary approval, through royal assent of the Budget Implementation Act.

Questions and answers

Question: How will the ERI affect workforce capacity, particularly in critical and specialized areas of the public service?

Answer: Should legislation come into force, deputy heads must confirm that the following criteria are met in order for an eligible employee’s application for the ERI program to be accepted. These criteria were approved by the Treasury Board as follows:

• the organization needs to reduce its workforce
• services to Canadians will be maintained
• current and future operational or business needs will continue to be met

Question: What is the estimated cost of the ERI?

Answer: The ERI would be sourced from the Public Service Pension Fund. It is estimated that it will cost $1.5 billion over five years, starting in 2025–26, while providing ongoing savings of $82 million per year.

Question: How many public servants do you expect will take early retirement under the incentive? Will they all be accepted?

Answer: Approximately 68,000 employees in the core public administration meet the age, pensionable service and employment requirements for the ERI. Additional criteria have also been established to maintain essential services and business continuity.

Given that the decision to apply for this incentive is specific to each individual and acceptance is determined by each organization’s deputy head, it is difficult to speculate on the number of employees who may apply or be accepted.

Question: If the ERI is meant to prevent layoffs in the public service, why is workforce adjustment happening first? What impact will this have on the number of employees who may be able to apply for the ERI?

Answer: The ERI is separate from the workforce adjustment process and, if approved by Parliament, eligible employees could apply for the incentive whether or not they are in a workforce adjustment situation.

The workforce adjustment process unfolds over several months, so, should the ERI be approved by Parliament before the summer recess, most eligible employees in a workforce adjustment situation would have an opportunity to apply to it before choosing an option under workforce adjustment and before most involuntary departures take effect.

Question: Public servants already have generous supports available when facing downsizing. Why is the ERI needed?

Answer: The ERI provides an additional tool to help the government reach its reduction goals through voluntary departures to the greatest extent possible.

Question: Will departments be able to replace employees who decide to take the ERI?

Answer: The ERI is intended to help the government reach its reduction goals. As such, one of the Treasury Board–approved criteria for approving the ERI is the need for an organization to reduce its workforce.

The details of how the program will be implemented are still being finalized and will be communicated in due course.

Background

As announced by the Minister of Finance on November 4, 2025, Budget 2025 proposes to amend the Public Service Superannuation Act and Income Tax Regulations to offer a temporary, voluntary ERI program through the federal public service pension plan. As part of the CER, the government committed to manage reductions to the greatest extent possible through attrition and voluntary departures. The ERI program will support this objective by creating a voluntary mechanism for public servants to apply to receive an unreduced pension up to five years earlier than would otherwise be available subject to parameters set by the Treasury Board. These parameters would be designed to maintain essential services and business continuity.

Letters have been sent to approximately 68,000 employees who may meet the program’s age, pensionable service and employment criteria to inform them that they may be eligible to apply. Further details about the program’s requirements, including final eligibility parameters, timelines and how to express interest, will be communicated should the legislation be passed. Given that the ERI program is not yet in place, and that the decision to apply for the ERI is specific to each individual and would require deputy head endorsement, it is difficult to speculate with precision on the number of employees who may apply or be accepted.

Typically, when an employee retires before the age and service requirements, their pension is permanently reduced. The reduction is 5% for each year of early retirement. Under this program, the pension reduction would be waived for eligible public servants who apply to depart the public service. This voluntary incentive program would be available to certain federal public service pension plan members who are eligible to apply under the parameters set by the Treasury Board and who are in one of the following groups:

Group 1: Members who joined the public service pension plan on or before December 31, 2012, and who:

• are at least 50 years old
• have at least 2 years of pensionable service
• have at least 10 years of employment in the public service

Group 2: Members who joined the public service pension plan on or after January 1, 2013, and who:

• are at least 55 years old
• have at least 2 years of pensionable service
• have at least 10 years of employment in the public service

Should legislation come into force, deputy heads must confirm that the following criteria are met in order for an eligible employee’s application for the ERI program to be accepted. These criteria were approved by the Treasury Board as follows:

• the organization needs to reduce its workforce
• services to Canadians will be maintained
• current and future operational or business needs will continue to be met

Implementation would proceed 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 five years, starting in 2025–26, while providing ongoing savings of $82.0 million annually.

Issue

Can you provide an update on reduction of executive positions in the public service?

Response

As the size of the public service adjusts, so too must its leadership.

Budget 2025 announced a reduction of 1,000 executive positions across the public service over the next two years as part of a broader effort to return the public service to more a sustainable level.

Six hundred and fifty of these are included in the 16,000 positions being reduced through the CER.

To manage these reductions to the greatest extent possible through voluntary departures, Budget 2025 proposes to introduce a temporary Early Retirement Incentive (ERI) program, subject to parliamentary approval.

Questions and answers

Question: Organizations were required to find 15% of their budgets in savings. Why are you only cutting executives by 12%?

Answer: As per Budget 2025, the public service population is expected to reach roughly 330,000 by the end of 2028–29, a decline of about 40,000 positions, or 10% from a peak of almost 368,000 in 2023–24. As the size of the public service adjusts, so too must its leadership. Accordingly, Budget 2025 committed to reducing the executive cadre by 1,000 positions over the next two years, approximately 12%.

Our goal is to ensure that all organizations have an appropriate ratio of executives to employees and that executive positions are being reduced proportionately to, or more than, the non-executive workforce.

Question: How much will career transition measures for executives cost the government?

Answer: Career transition agreements are negotiated between executives and deputy heads, based on a variety of factors, including age and years of service. They also include both cash and non-cash elements. Therefore, it is not possible to precisely predict the total cost of these agreements.

Question: Is there an update on the work being done to reduce the number of assistant deputy ministers that was announced this past summer?

Answer: Public service executives led large and urgent efforts to support Canadians during the pandemic and played an important leadership role in advancing government priorities. This led to an increase in senior executive positions, some of which extend beyond departments’ ongoing requirements and established organizational structures.

TBS is working with organizations to stabilize the assistant deputy minister overage situation and prevent further growth through temporary oversight of EX-04 and EX-05 staffing decisions. Further to this, Budget 2025 announced a reduction of 1,000 executives across the public service over the next two years.

Background

Budget 2025 announced that the public service population is expected to reach roughly 330,000 by the end of 2028–29, representing a decline of about 40,000 positions (or 10%) from a peak of almost 368,000 in 2023–24. The Budget further specified that as the size of the public service adjusts, its leadership must also adjust and that the government will reduce the executive cadre by 1,000 positions over the next two years. These reductions are inclusive of the Comprehensive Expenditure Review (CER) and early retirements.

Since 2018, the ratio of executives to employees has increased, resulting in a top-heavy public service. A reduction of the executive workforce will help:

• speed up decision-making
• flatten organizations and the public service as a whole
• more equitably and fairly distribute the work among executives
• ensure executives have responsibilities commensurate with their pay
• demonstrate to employees that workforce reductions are also being applied at the leadership level

A reduction of 12% of executives across the federal public service will be applied in the next two years. Deputy heads have access to the same mechanisms to implement these reductions as they do for CER reductions. This includes career transition provisions included in the Directive on Terms and Conditions of Employment for Executives and the ERI, once approved by Parliament.

Issue

Why did the government spend $146.3 million on performance pay for federal executives in 2024–25?

Response

Performance pay is a common component of executive compensation in private and public sector organizations.

A portion of executives’ compensation (on average about 11%) is held back each year and only paid if executives meet the expectations outlined in their performance agreements.

A small proportion of executives (about 7% in 2024–25) who demonstrate exceptional performance may also receive a bonus.

Questions and answers

Question: Departments have consistently failed to meet their own performance targets and yet an overwhelming number of executives in those departments continue to get performance pay. Why?

Answer: Departmental Plans set out broad, high-level targets for departments and their programs while performance commitments for executives are based on a set of performance measures specific to each of their roles and responsibilities. To compare the two does not provide an accurate picture of either.

Executives can get performance pay if they meet their annual commitments and demonstrate key leadership skills.

Question: Is it appropriate to pay performance awards during a period of spending restraint?

Answer: Performance pay is a longstanding component of executive compensation designed to support accountability and results. Payments are not automatic, are subject to strict eligibility criteria, and must be earned through demonstrated performance, including during periods of fiscal restraint.

Background

Performance pay is a key component of executive compensation in the federal public service. It is not an automatic entitlement. Each year, a portion of executives’ total compensation is held back and only paid once it is confirmed that they have met the performance objectives outlined in their performance agreements. This ensures accountability for results.

In addition to this base amount, a smaller portion of executives, those who exceed expectations, may receive a bonus. Bonuses are the only fully discretionary component of performance pay.

Executives do not receive performance pay when their performance does not meet expectations or cannot be assessed for a variety of reasons (for example, when an executive is absent from the job for a significant portion of the performance cycle).

On January 30, 2026, TBS published the results of the Performance Management Program for Executives for 2024–25 on Canada.ca. In the 2024–25 performance pay cycle, 7,987 executives (98.1%) in the core public administration (CPA) received performance pay, including 559 (6.9%) who received a bonus for exceptional performance. In comparison, in the 2023–24 performance pay cycle, 7,960 executives (97.4%) across the CPA earned performance pay with 623 (7.6%) of them receiving a bonus.

The total spending for executive performance pay was $146.3 million, including $3.4 million for bonuses, which is an increase of $3.8 million (+2.7%) compared to 2023–24. The increase is primarily due to:

• salary adjustments that account for $3.7 million (95.2%) of the total increase in performance pay expenditures; the salary increases align with those provided to the majority of employees across the federal public service
• a 0.3% increase in the number of executives who received performance pay, from 7,960 to 7,987 that accounts for $0.5 million (12.6%) of the total increase in performance pay expenditures

In 2024–25, the average performance pay per executive increased from $17,869 to $18,316 (+2.4%). On average, executives in the CPA received performance pay equal to 10.7% of their salary, well below the 19.7% average received by executives in other Canadian public and private sector organizations.

The Government of Canada has fully paid out performance pay or bonuses for the 2024–25 fiscal year.

Issue

What is the government doing to strengthen public service integrity in the wake of issues such as ArriveCAN?

Response

As a condition of employment, all public servants must adhere to the Directive on Conflict of Interest and the Values and Ethics Code for the Public Sector.

They must identify and address any situations of real, apparent or potential conflict of interest.

Further to this, all employees must now resubmit a conflict of interest attestation annually.

A review of the Directive on Conflict of Interest is also underway, and the results will be communicated in due course.

We have one of the best public services in the world, and we will continue to seek opportunities to maintain the highest levels of integrity and public trust.

Background

The avoidance, prevention and resolution of conflicts of interest are among the key ethical responsibilities of public servants and are essential to maintaining public trust. Because of the authority, influence or power that public servants may exercise in their official responsibilities, they must resist any offers to exchange advantages for the exercise of that authority, influence or power and the appearance of having done so.

The Values and Ethics Code for the Public Sector sets a high standard of ethical behaviour. Public servants must carry out their duties in a non-partisan and impartial manner, avoiding the appearance of a conflict of interest, ensuring that the public interest is protected and providing decision makers with all of the information, analysis and advice they need in a candid and impartial manner. Public servants must be non-partisan in their work and serve each duly elected government loyally.

The Directive on Conflict of Interest provides direction to public servants on how to identify, prevent and resolve conflicts of interest. Compliance with the Values and Ethics Code for the Public Sector and the Directive on Conflict of Interest is a condition of employment, and breaches of either are subject to discipline, up to and including termination of employment. The deputy head of each organization is responsible for the systems used in their organizations for reporting on conflicts of interest and for supporting a positive culture of values and ethics.

The parliamentary and media focus on ArriveCAN has led to a heightened interest in values and ethics and particularly conflict of interest declarations made by public servants in relation to contractual relationships with the Government of Canada.

On March 20, 2024, the former President of the Treasury Board and former Minister of Public Services and Procurement Canada announced a series of actions and commitments to enhance effective management of government procurement. One of the actions has been a review of the Directive on Conflict of Interest to clarify the responsibilities of employees who engage in contracting with the government.

The Office of the Comptroller General has also taken several actions in the past year to enhance integrity in procurement. These actions include:

• release of an update to the Manager’s Guide: Key Considerations When Procuring Professional Services with guidance to help managers make decisions that demonstrate a prudent use of tax dollars
• added new requirements to the Directive on the Management of Procurement to strengthen accountabilities; new requirements are related to values and ethics, documentation and reporting, and a requirement to integrate PSPC’s Code of Conduct for Procurement into all government procurements
• undertook a horizontal audit across several large departments to assess governance, decision-making and controls associated with professional services contracts; audit results were published in March 2025
• published a Guide to Mitigating Conflict of Interest in Procurement that highlights conflict of interest requirements in relevant laws and policies, including reporting and monitoring, documentation, supplier obligations, and reporting fraud and wrongdoing

Issue

What is the government doing to deliver on its promise to provide early retirement for front-line safety and security workers?

Response

The Government of Canada values the important work of our front-line public service safety and security workers.

Bill C‑15, the Budget Implementation Act, proposes amendments to the Public Service Superannuation Act to expand early retirement eligibility for front-line safety and security workers that participate in the public service pension plan.

Newly eligible employees will include front-line firefighters, paramedics, correctional service employees, border services officers, parliamentary protection officers, and search and rescue technicians.

This will provide consistency across federal employee groups that support safety and security, recognizing the demanding nature of their day-to-day duties.

Questions and answers

Question: How much will expanding early retirement for front-line safety and security workers cost? Will it affect the long-term sustainability of the public service pension plan?

Answer: The cost of expanding early retirement eligibility is estimated to include one-time costs of approximately $163 million and ongoing annual costs of approximately $21 million shared between the employer and employee.

These costs would be covered by the Public Service Pension Plan, which continues to maintain a strong financial position and remains sustainable over the long term.

Question: When will the proposal to expand early retirement for front-line safety and security workers come into effect?

Answer: Expanding early retirement eligibility under the operational service program is not automatic following royal assent of the Budget Implementation Act, as it also requires subsequent regulatory changes. As such, these legislative and regulatory amendments will come into force on a date to be fixed by the Governor in Council.

Further details on these program enhancements, including related terms and conditions, will be included as part of subsequent regulatory amendments.

Background

Further to an announcement by the Prime Minister on October 17, 2025, Budget 2025 proposes to amend the Public Service Superannuation Act to expand the Operational Service Early Retirement Program (also known as “25 and out”) to front-line employees of the following additional occupational groups participating in the public service pension plan:

1. firefighters (federal and territorial governments)
2. paramedics (federal and territorial governments)
3. correctional service employees (territorial governments)
4. border services officers (federal government)
5. parliamentary protection officers (federal government)
6. search and rescue personnel (federal and territorial governments)

Participation in the Operational Service Early Retirement Program would allow the newly eligible employees to access a special early retirement benefit. More specifically, they will be able to retire early with an immediate unreduced pension after completing 25 years of actual operational service, or at age 50 with 25 years of actual and deemed operational service combined (at least 10 years must be actual). This special benefit is currently only available to employees of Correctional Service Canada working in a federal correctional institution.

Implementation of the expanded Operational Service Early Retirement Program will require amendments to the Public Service Superannuation Act, as well as the completion of additional actions, such as the finalization of regulatory amendments and changes in the pay and pension systems. The implementation date of the expanded program will be announced at a later date following the completion of all the required implementation actions.

The proposal in Budget 2025 mirrors a commitment made in the government’s most recent election platform. It also mirrors a commitment made by the former government, with that commitment being informed by a recommendation from the Public Service Pension Advisory Committee. The required amendments to expand the Operational Service Early Retirement Program were previously included as part of the implementing legislation for the 2024 Fall Economic Statement; however, that legislation did not proceed due to the dissolution of Parliament on March 23, 2025.

Issue

Why did the government take funds from the Public Service Pension Fund?

Response

The Government of Canada is committed to providing federal public servants with a well-managed, stable and sustainable pension plan.

By law, the government must address a surplus in the pension fund above an allowable limit.

On December 17, 2025, I tabled a report in Parliament confirming that the fund was in a non-permitted surplus position (approximately $0.9 billion and with a funding ratio of approximately 125.5%).

The non-permitted surplus was calculated after factoring in the cost of the proposed Early Retirement Incentive program and proposed expansion of the Operational Service Early Retirement Program (“25 and out”), which are both being funded out of the pension fund.

Non-permitted surplus amounts have been transferred the Consolidated Revenue Fund, which also contains the non-permitted surplus amounts from 2024. No decisions about the use of these funds have been made.

The public service pension plan is fully guaranteed by the Government of Canada. In the event of a shortfall, the government – not employees – would cover any deficit, as it did previously from 2013 to 2018.

Questions and answers

Question: You previously indicated the $1.9 billion surplus would be held pending a decision on next steps. With the surplus moved into general revenues, what decision was ultimately made on how the funds will be used?

Answer: No decisions have been made yet. The non-permitted surplus amount is being held in the Consolidated Revenue Fund while next steps are considered and discussions with stakeholders will be held as appropriate.

Question: Why did the government determine that the non‑permitted surplus from the pension fund should be retained by the Crown rather than being redistributed to taxpayers?

Answer: The government is legally required to address a non-permitted surplus and transferred these funds to the Consolidated Revenue Fund in line with the options provided for in the Public Service Superannuation Act.

This transfer has no impact on the pension benefits of current or future public service retirees. The Public Service Pension Plan is fully guaranteed by the Government of Canada.

No decisions have been made yet on the next steps for how these funds will ultimately be used.

Question: Where exactly within the Public Service Pension Fund will the money come from for the Early Retirement Incentive (ERI)? Will it be from the non-permitted surplus?

Answer: If the ERI is approved by Parliament, it will be funded from the Public Service Pension Fund. This cost was reflected in the Special Actuarial Report on the Financial Position of the Public Service Pension Fund as at 31 March 2025, tabled in Parliament on December 18, 2025. Even with this potential cost factored in, the fund was still in a non-permitted surplus position.

Question: If you’re taking it from the pension fund, how will you ensure taxpayers aren’t eventually on the hook for these increased costs?

Answer: The Public Service Pension Fund has shown very strong performance over a number of years and is projected to remain in a surplus position after taking into account the maximum costs of the ERI program.

Background

The terms and conditions of the public service pension plan are outlined in the Public Service Superannuation Act and its Regulations. Per section 113 of the Federal Public Sector Labour Relations Act, the terms and conditions of the plan cannot be negotiated through collective bargaining.

The funding position of the public service pension plan is regularly monitored through actuarial reviews. Among other things, the actuarial reviews establish whether the plan is in a deficit (funding ratio below 100%), surplus (funding ratio above 100%) or non-permitted surplus position (funding ratio above 125%). The funding ratio is calculated by comparing the plan’s assets in relation to its liabilities.

Legislation requires that, every three years, the Chief Actuary of Canada prepare an actuarial valuation report which provides information on the funding position of the pension plan and present this report to the President of the Treasury Board. The President is required to table the triennial actuarial report in Parliament. The President may also, at any time, request that the Chief Actuary of Canada provide him with a special actuarial report.

The President may form an opinion on the funded status of the plan based on reasonable and relevant evidence. When a non-permitted surplus exists in the Public Service Pension Fund, the Public Service Superannuation Act provides for its reduction through an employer contribution holiday, a full or partial employee contribution holiday, and/or a transfer of funds from the pension fund to the Consolidated Revenue Fund. In contrast, when the pension plan is in a deficit position, the government is fully and solely accountable for making the required deficit payments. From 2013 to 2018, the government made deficit payments totalling $2.8 billion, including interest.

Issue

Is the government going to require all public servants to return to the office full time?

Response

The government has put forward ambitious plans to deliver on priorities for Canadians and to strengthen our country.

Working together onsite, with all hands on deck, is an essential foundation needed during this pivotal moment and beyond.

This why we announced our intention to increase the onsite presence of public service employees.

As of May 4, 2026, executives will be required to work onsite five days per week. For all other employees, the intention is to have them work onsite four days a week as of July 6, 2026.

We will be engaging with bargaining agents to seek their input on the implementation of this plan.

Questions and answers

Question: What evidence is there that onsite work boosts productivity?

Answer: Increasing onsite presence is not about increasing individual productivity. It’s about increasing our organizational performance, building stronger teams and culture, ensuring public servants are well versed in our Values and Ethics Code for the Public Sector, and working together to deliver our mandates and serve Canadians.

Question: Some unions have declared an impasse in bargaining, claiming that you are changing the terms and conditions of their employment. Are you allowed to do this?

Answer: As has always been the case, the employer has the management right to designate the location of work and to require employees to report to their designated worksite. That being said, we value the perspectives of bargaining agents and are committed to engaging with them to discuss the government’s intent to increase onsite presence for its employees.

TBS has held four meetings with bargaining agents to seek their input about important elements, such as the potential for assigned seating, occupational health and safety, and the duty to accommodate.

Question: What happens now that the Public Service Alliance of Canada (PSAC) has declared an impasse for the Program and Administrative Services (PA) Group and the Education and Library Science (EB) Group? What are next steps?

Answer: We encourage the PSAC to return to the bargaining table to pursue negotiations in good faith. The employer remains determined to reach an agreement that is fair to employees and reasonable for Canadians.

Out of respect for the collective bargaining process, we won’t comment on negotiation priorities or proposals.

Question: Do you think it was a good decision to announce this change in the hybrid work model at the same time that public servants are already stressed about job cuts?

Answer: We recognize that this decision is occurring during a challenging period where employees are dealing with change and, in many cases, uncertainty about their jobs.

The government has put forward ambitious plans to deliver on priorities for Canadians and to strengthen our country. Working together onsite is an essential foundation of the strong teams, collaboration and culture needed during this pivotal moment and beyond.

Question: Is the government considering increasing onsite presence to five days per week for all employees?

Answer: TBS will continue to evaluate with deputy heads their operational requirements and the evolution of onsite standards for public and private sectors and issue further updates and guidance should the direction change further.

Question: Why are you doing this when you have committed to spending less on government operations?

Answer: The CER is focused on reducing spending on day-to-day operations. That said, there is a cost associated with a highly effective public service that can effectively deliver for Canadians. That includes supporting onsite work, where collaboration, strong culture and innovation can thrive.

While the government has announced its intention to increase in-office presence for both employees and executives, details of implementation, which may affect space requirements, are still being determined following engagement with bargaining agents.

Background

Following the Clerk of the Privy Council’s June 2022 message encouraging departments to explore hybrid work models, federal organizations began testing various approaches to support service delivery to Canadians. The Chief Human Resources Officer collected data through three questionnaires between fall 2022 and fall 2023, revealing a wide range of hybrid arrangements and a need for greater consistency. In response, TBS introduced the Direction on Prescribed Presence in the Workplace in December 2022, requiring eligible employees to work onsite two to three days per week by March 2023, with time-limited exceptions for certain groups based on specific work models (for example, call centre employees).

The direction sets out the requirement for deputy heads to implement and monitor a minimum requirement of three days per week in the workplace for all public servants eligible for a hybrid work arrangement. Workplaces vary from one organization to the other. Deputy heads are to use discretion and adapt to their operational requirements. This includes in the application of certain exceptions in a limited set of circumstances, which are explicitly outlined in the direction, and monitoring compliance within their organizations.

Further refinements to the direction were made in May 2024 to increase the minimum onsite presence to three days weekly starting September 2024, with executives expected onsite four days, and previously exempt groups required to comply by September 2025. In December 2025, the Prime Minister indicated publicly that in the coming weeks the government will be engaging bargaining agents on the modalities of increased onsite presence for federal public servants given seniority, roles and capacity.

Bargaining agents have continued to express their dissatisfaction with the May 2024 update to the direction in a variety of ways, including launching unfair labour practice complaints, grievances and a judicial review of the decision taken by the Chief Human Resources Officer.

Since summer 2025, bargaining units representing about 66% of employees have begun the collective bargaining process. As part of this round of collective bargaining, the Public Service Alliance of Canada (PSAC) has put forward bargaining proposals for the Program and Administrative Services (PA) Group, which includes over 100,000 employees, that seek to enshrine telework in collective agreements. The employer continues to maintain its position that the location of work is an exclusive management right.

On February 5, 2026, the Secretary of the Treasury Board, the Chief Human Resources Officer and the Associate Chief Human Resources Officer announced that as of May 4, 2026, executives will be required to work onsite five days per week. For all other employees, the intention is to have them work onsite four days a week as of July 6, 2026. They further announced that the TBS would be engaging with bargaining agents to seek their input on implementing this plan. The discussions will focus on important elements, such as the potential for allocation of assigned seating and occupational health and safety.

Issue

Following the modernization of the Official Languages Act in 2023, what is the President of the Treasury Board doing to support official languages in Canada?

Response

I am taking concrete steps to ensure that the Official Languages Act is respected across all federal institutions.

In December, I announced that 733 federal offices will be newly designated as bilingual. This raises the proportion of bilingual offices across Canada from 34% to 40%.

That same month, I tabled draft regulations under Part VII of the Act to better support minority language communities, promote the French language, and strengthen opportunities for learning in the minority language.

We are also strengthening the use of official languages in the workplace. All employees in bilingual regions now have the right to be supervised in the official language of their choice,

Questions and answers

Question: How will you ensure that departments will continue to meet their official languages obligations with all the cuts to the public service?

Answer: The government is committed to ensuring that federal public services are delivered to Canadians in the official language of their choice and is dedicated to fostering a bilingual and inclusive work environment.

Question: You tabled the regulations for Part VII of the Official Languages Act before Christmas, but when can we actually expect these regulations to be fully approved and in force?

Answer: Parliamentarians currently have an opportunity to view and provide input on the draft regulations. Subsequently, the draft regulations will be published in the Canada Gazette for another 30 days for public comment. There will then be an analysis of the feedback received, and the final regulations will be drafted and submitted for approval by Governor in Council before coming into force.

Question: Did the CER cut any official languages programs?

Answer: Bilingualism remains a priority for the Government of Canada. Our obligations under the Official Languages Act remain unchanged and must continue to be met by all federal government organizations.

Background

Following the modernization of the Official Languages Act in 2023, the Treasury Board remains responsible for developing and coordinating federal policies and programs related to:

• communications with and services to the public (Part IV)
• language of work in federal institutions (Part V)
• participation of English-speaking and French-speaking Canadians in the federal public service (Part VI)

In addition, the modernized Official Languages Act has given:

• to the President of the Treasury Board, the responsibility of assuming an overall leadership role in the implementation, coordination and good governance of the Official Languages Act
• to the Treasury Board, a strengthened monitoring, auditing and evaluation role for compliance of federal institutions with their official languages responsibilities
• to the Minister of Canadian Heritage, the role of developing a government-wide official languages strategy, in consultation with the President of the Treasury Board, and of conducting a 10-year review of the Act and its application

Issue

What are the ongoing efforts being taken by the Government of Canada regarding whistleblower protections?

Response

The Public Servants Disclosure Protection Act protects public servants against reprisals when they report wrongdoing in the workplace.

As part of ongoing efforts to promote a positive, respectful and safe public service culture, a task force was appointed to review the Act and identify opportunities to improve the disclosure process.

The task force has made 35 recommendations aimed at strengthening Canada’s whistleblowing regime.

I look forward to sharing these with public servants and parliamentarians in the coming weeks.

We will carefully consider the task force’s advice as we continue to make meaningful improvements so that employees feel confident bringing forward cases of wrongdoing.

Background

As part of the former Minister’s mandate to take action to improve the government’s whistleblower protections and supports, the Public Servants Disclosure Protection Act Review Task Force was created in November 2022. Composed of people who bring significant experience and diverse expertise within the field, the task force began its work in January 2023 and provided their report to the President of the Treasury Board on December 1, 2025. The report contains 35 recommendations to improve the whistleblowing regime that address key issues such as fear of retaliation, lack of accountability, unclear reporting mechanisms, lack of awareness of reprisal protections, and the need for cultural change. Its tone is neutral and balanced.

This review considered the work conducted by the Standing Committee on Government Operations and Estimates (OGGO) and the recommendations from its 2017 report, research on the latest developments in whistleblowing in other jurisdictions, input from stakeholders, a survey accessible to the public sector and members of the general public, as well as views expressed during parliamentary consideration of Private Members Bill C‑290, An Act to amend the Public Servants Disclosure Protection Act, introduced in the previous Parliament by Bloc Québécois MP Jean-Denis Garon in June 2022.

Bill C‑290 passed third reading in the House of Commons on January 31, 2024, and was referred to the Senate. The bill was terminated upon the dissolution of Parliament on March 23, 2025. The Bloc Québécois continued to focus on the need to enhance whistleblower protections in their 2025 platform and may reintroduce similar legislation.

On October 31, 2025, the Annual Report on the Public Servants Disclosure Protection Act 2024 to 2025 was tabled by the President of the Treasury Board. It showed that 279 public servants made 278 internal disclosures concerning 727 allegations of wrongdoing. This compares to 250 public servants who made 266 internal disclosures concerning 425 allegations of wrongdoing in 2023–24.

Issue

Following the announcement by a former President of the Treasury Board, how has the government focused on enhancing productivity in the public sector given the current economic situation and questions about the size and cost of the public service?

Response

The public sector plays a significant role in the country’s economy and its overall productivity.

That is why we established a working group that made recommendations on opportunities to enhance productivity in the federal public service.

Their recommendations are well aligned with government priorities, including efforts to:

• enhance the government’s capacity to leverage AI for improved services
• review federal programming to ensure alignment with core federal responsibilities to avoid duplication
• ensure that government services are delivered efficiently and effectively

If pressed on measuring productivity:

While many recommendations are already completed, underway or planned, some, such as measuring productivity across the public sector, are not being pursued at this time.

The government may consider these recommendations in the future and remains committed to improving service delivery and ensuring the effective and efficient use of public resources.

Questions and answers

Question: When will TBS be implementing the recommendations in the report prepared by the Working Group on Public Service Productivity?

Answer: The Working Group on Public Sector Productivity’s recommendations are well aligned with government priorities.

In fact, the government is already addressing recommendations made by the working group.

For instance, through the Comprehensive Expenditure Review, government programming was reviewed to ensure it was aligned with core federal responsibilities, wasn’t duplicative, and that it delivered services efficiently and effectively.

Budget 2025 also announced that government would be adopting regular reviews to continually optimize resources, consolidate program administration, scale up and implement AI in the public service, attract private sector expertise to the public service, and streamline administrative burden.

Several other working group recommendations could inform future work by the Cabinet Committee on Government Transformation, such as recommendations related to upskilling, performance management and ongoing investment in technology (including AI).

Question: Why are you refusing to measure productivity, which was one of your working group’s recommendations?

Answer: Some recommendations, while of interest, are not being pursued at this time for various reasons, although they may be considered in the future. These include recommendations related to measuring productivity across Canada’s public sector.

Background

A healthy economy depends on strong productivity, which leads to faster growth, more jobs and higher wages.

The public sector in Canada accounts for nearly 40% of Canada’s GDP, a significant part of Canada’s workforce and economy, so it is important to consider the role that the public sector can play in improving Canada’s productivity.

With that in mind, a former President of the Treasury Board announced the establishment of a working group in August 2024 to examine how the federal public service can continue to be innovative, flexible and efficient in delivering services for Canadians.

The working group was comprised of members from a range of professional backgrounds, including government, technology and academia. Members were announced on December 10, 2024.

The working group developed 19 recommendations for the government to consider. These recommendations were published on the Canada.ca website in December 2025, along with an overview of the working group’s activities and TBS’s response to the recommendations.

In its response to the working group’s recommendations, TBS identified:

• recommendations that align with current government actions
• recommendations that align with measures proposed in Budget 2025
• recommendations that could inform future work by the Cabinet Committee on Government Transformation
• recommendations not being considered at this time because of other government priorities

Some media coverage of the release of the working group’s recommendations and TBS’s response has suggested that TBS is not in favour of measuring productivity within the federal public service. While TBS does not consider it a current priority to develop a program to measure productivity across the entirety of the Canadian public sector, TBS continues to encourage federal departments and agencies to look for ways to measure and improve productivity across their own operations.

In Budget 2025, the government made improving public service productivity a central part of its plans to spend less on government operations so that it can invest more in Canadians and the Canadian economy.

The President of the Treasury Board is leading efforts to identify and achieve internal government efficiencies so that departments can reallocate scarce resources toward delivering government priorities.

Issue

What is the Government of Canada doing to address concerns about red tape?

Response

The Government of Canada is committed to cutting red tape.

Our Red Tape Review of regulations has identified nearly 500 initiatives aimed at streamlining services, eliminating duplication and reducing costs for Canadians.

For example, these initiatives will:

• introduce new medications for Canadians more quickly
• speed up decision-making and processes in economic sectors, such as transportation and agriculture
• support more efficient reviews of projects to drive economic growth

We are also proceeding with horizontal reviews to identify additional system-wide opportunities to reduce regulatory barriers for businesses and deliver an effective regulatory system for Canadians.

TBS’s Red Tape Reduction Office will continue to engage with regulators and stakeholders to deliver initiatives that eliminate unnecessary rules and reduce costs.

Questions and answers

Question: How many employees work in the Red Tape Reduction Office? What are they doing to reduce red tape, and what are the next steps?

Answer: There are 34 FTEs in the Red Tape Reduction Office.

The office is overseeing the review of regulations across federal departments and agencies with regulatory responsibilities.

• Their work will help accelerate the elimination of red tape by speeding up the removal of unnecessary or outdated rules.
• The office is also responsible for establishing measures to track, assess and communicate results of regulatory action, and engage with Canadians and Canadian businesses for feedback on regulatory red tape.

Background

Issue

Can the government explain what exactly a regulatory sandbox is and why Canadians should believe this approach will actually keep pace with innovation and reduce red tape while maintaining appropriate parliamentary oversight of these new powers?

Response

To help regulation keep pace with innovation, the government is proposing to expand the use of regulatory sandboxes through amendments to the Red Tape Reduction Act.

Regulatory sandboxes permit new products or services to be tested in the marketplace under a temporary set of rules and controlled by regulatory supervision.

This can help a regulator safely decide whether to make any permanent changes to how that product or service should be regulated.

The proposed expansion of sandboxes would only be used for a specific, time-limited purpose in specific key sectors where there is a clearly defined benefit to the country and Canadians.

They would also need to follow a rigorous and transparent process.

Regulatory sandboxes help support economic growth, reduce red tape, and improve Canada’s investment environment by permitting new products and technologies to get to market in both a safe and efficient manner.

Background

Regulatory sandboxes are a tool that regulators may use to test real world impacts of a new product or process in a controlled manner with regulatory supervision. The purpose of a regulatory sandbox is to safely test a new product or process.

Regulatory sandboxes can help support economic growth, reduce red tape, and improve Canada’s investment environment by permitting new products and technologies to get to market in both a safe and efficient manner.

For example, Transport Canada ran a regulatory sandbox to test a new kind of light plane that was not certified for pilot training in Canada. Using the results of the sandbox, Transport Canada took measures that permit the new technology, reduce costs, lower pollution and make Canada more competitive.

Issue

How is the Government of Canada advancing its responsible AI adoption to improve how it serves Canadians?

Response

The government is exploring areas where AI can improve service delivery and enhance the work of public servants.

The AI Strategy for the Federal Public Service is guiding this work along with various policy tools that ensure the responsible use of AI.

To provide transparency, we maintain a publicly available AI Register that lists where and how federal institutions are using or testing AI.

If pressed on the use of AI for access to information and privacy (ATIP) tools:

When it comes to the processing of ATIP requests, regardless of any technology used to support this work, all files are reviewed by ATIP professionals to ensure legal requirements for disclosure are being properly met.

Questions and answers

Question: How many jobs will you be able to eliminate with AI? What types of jobs will these be?

Answer: We are adopting AI to help our public servants become more effective and efficient.

The goal is not job reduction; it’s service improvement for Canadians.

Question: How will the government’s AI strategy fit into the new Office of Digital Transformation announced in Budget 2025? Is there any progress on this office?

Answer: The Government of Canada’s AI strategy aims to align departments and accelerate responsible AI adoption within the federal public service. It outlines how we are leveraging AI technology to improve productivity and deliver enhanced digital services to Canadians.

Work is underway to plan and establish the office, and additional details will be provided when available.

Background

The AI Strategy for the Federal Public Service: 2025-2027, published in March 2025, is intended to accelerate the responsible adoption of AI across the Government of Canada to deliver better and more efficient services to Canadians, improve decision-making, advance research, and protect Canada and its interests.

TBS broadly engaged stakeholders, partners and the public to develop the strategy, publishing Consultations on the AI Strategy for the Federal Public Service: What We Heard in January 2025. Participants agreed that AI should be used to modernize and streamline service delivery.

The strategy sets out key actions to advance responsible AI adoption within the Government of Canada. Some that contribute directly to public service modernization include:

• establishing an AI centre of expertise to support teams developing and scaling AI tools
• removing policy and legislative barriers and bedding a “think AI” approach within all planning and funding requests
• providing all departments with common access to infrastructure, tools and solutions
• addressing obstacles to recruiting and retaining AI and data talent and upskilling current public servants at all levels to work with AI
• outlining key activities for new and emerging digital roles and linking them to learning programs and paths to build future-ready digital professionals and teams

While AI use in the Government of Canada is not new, current and significant modernization projects are underway across the Government of Canada that leverage AI to drive better service both internal and external to the public service. Examples include:

• The Benefits Delivery Modernization program (Employment and Social Development Canada) is using AI to address:
  • workloads and backlogs for Employment Insurance claim recalculations
  • identifying potential cases of misuse or abuse of the Old Age Security program and fraud in temporary resident applications
• Immigration, Refugees and Citizenship Canada is using AI to:
  • complete administrative tasks for immigration applications, such as data matching and bulk email creation
  • streamline the processing of routine, low-risk cases for temporary work permits, passports and temporary residency applications
• Launched in September of 2025, GCtranslate was the first lighthouse project under the strategy and stands out as a transformative solution for bilingual service delivery. Built on Canadian-trained AI models, GCtranslate is already improving translation speed and accuracy across departments, reducing turnaround times for official documents while maintaining linguistic quality.

Issue

What is being done to improve transparency through access to information?

Response

We are reviewing the Access to Information Act to make sure that Canadians can access government information quickly and easily.

Feedback from Canadians and stakeholders is an important part of this work, and we are seeking input from the public until June 15.

To guide this engagement, TBS published potential policy approaches that focus on greater transparency, improved access, historical declassification, modernized information management, protection of Indigenous information, and strengthened oversight.

I look forward to hearing from a wide range of stakeholders on this important issue.

If pressed on concerns from the Information Commissioner:

I was pleased to recently meet with the Information Commissioner to discuss this review and her views. I look forward to receiving her submission as part of formal engagement activities.

If pressed on information management practices:

The government is committed to managing its information securely and in a way that facilitates access, transparency and accountability.

All employees are responsible for the proper management and safekeeping of information based on its value, and deputy heads are responsible for responding to non-compliance.

Questions and answers

Question: Why has the government failed to implement any of the 38 recommendations made by the Standing Committee on Access to Information, Privacy and Ethics (ETHI)?

Answer: TBS and partner departments are addressing many of ETHI’s recommendations made in 2023 through actions and initiatives aimed at strengthening the administration of the current access to information (ATI) regime. This work is ongoing and includes improving proactive publication, providing guidance and training to access to information and privacy (ATIP) professionals to improve request processing, and enhancing digital tools.

Of the committee’s 38 recommendations, 22 are related to legislative amendments. The public engagement process of the mandatory review of the Act will provide an opportunity to consider the recommended legislative changes.

All feedback, including the recommendations ETHI had made, will inform the government’s approach to improving the federal access to information system.

Question: When will the ATI review be complete?

Answer: We have received significant feedback from various stakeholders since 2015. After the 2020 review, some stakeholders commented on timelines. For the current review, TBS is using a simpler and more focused way to collect feedback that meets the needs of stakeholders.

Question: Is the government considering rolling back the powers of the Information Commissioner?

Answer: No, the government is not removing or reducing the Information Commissioner’s order-making powers. The government is examining whether the Information Commissioner’s current oversight framework is effective and whether the Commissioner would benefit from additional tools to ensure that the order-making process is as efficient as possible. The Information Commissioner will have an opportunity to share her views on potential changes to the Act as part of formal engagement activities.

Question: Do you think it’s appropriate for government records to be automatically erased after 15 days, thereby hiding important information from Canadians, parliamentarians and media?

Answer: It is appropriate for the Government of Canada to make sure its information is secure, while being open and accessible to Canadians. Good information management helps government make decisions and provide better services. It also protects Canadians’ right to access government information and keeps their personal information safe.

Each institution is responsible for setting their own retention period for information and data under Treasury Board policy.

In addition, public servants must keep information that shows activities and decisions of government. This includes information from any application or format, including email, meeting records, handwritten notes or instant messaging. Information of business value must be saved in the department’s official storage system and only deleted as authorized.

That said, not all government information is of business value or should be kept long-term. Good information management includes deleting transitory records as soon as they are no longer needed. This makes it easier to find important information quickly and lowers storage and maintenance costs.

Background

The Government of Canada is committed to the core principles of transparency, accountability and participation, which are integral to a healthy, functioning democracy and to maintaining public trust.

In line with the government’s commitment to transparency, the 2024 federal budget proposed $84 million in funding for TBS and Library and Archives Canada (LAC) to maintain the ATIP regime (including conducting the 2025 review of the Act) and expedite requests. Some funding for TBS and LAC will be devoted specifically to advance the work on declassification and disclosure and support other key actions.

Issue

What is the government doing to green its operations?

Response

We are committed to government operations that are net zero, climate resilient and green.

The Greening Government Strategy establishes the Government of Canada’s targets and commitments to get to net-zero and green operations by 2050 and enhance the climate resilience of its operations by 2035.

Our efforts have resulted in positive results:

• 83% of the applicable light-duty vehicles purchased by the federal government were green as of 2023–24
• greenhouse gas emissions from our real property and conventional vehicle fleet were reduced by 42.5% as of March 2025, compared to 2005 levels

TBS will continue to work with departments and Crown corporations to meet our targets and ensure net-zero emissions in government operations by 2050.

If pressed (electric vehicle mandate):

The Government of Canada remains committed to supporting the transition to cleaner transportation. Greening our fleet is a key part of our strategy, and we will continue to lead by example.

Background

As the owner and manager of the largest fixed asset portfolio in Canada (over 30,000 buildings; 20,000 engineered assets, such as bridges and dams; and over 40,000 vehicles), the Government of Canada has a critical role to play in meeting Canada’s climate objectives.

With over $40 billion in annual procurement, the government is the largest public buyer in Canada and is well positioned to leverage its procurement power to stimulate market demand for low-carbon products from Canada’s emerging clean technology sector.

The Government of Canada is transitioning to net-zero emissions and climate-resilient operations while also reducing environmental impacts beyond carbon, including reductions in waste and water use and improvements to biodiversity.

The Greening Government Strategy: A Government of Canada Directive specifies greening government commitments for:

• government-owned buildings
• government-owned fleet
• government procurement
• climate resilience (adaptation)

The strategy was created in 2017 and updated in 2020 and 2024.

The Centre for Greening Government supports TBS’s mandate by:

• providing strategic advice to other federal departments and agencies regarding net-zero emissions, climate resilient and green operations through:
  • providing practical guidance and tools for net-zero, resilient and green real property, fleet and procurement
  • convening interdepartmental working groups and external stakeholder communities of practice to share expertise, successes and best practices among departments
• tracking and publicly disclosing government environmental performance information, including greenhouse gas emission reductions for federal operations
• administering the Greening Government Fund to reduce emissions and support projects that can be replicated within and across departments
• working with PSPC on common procurement tools that incorporate greening criteria

Issue

What is the Risk and Compliance Process?

Response

Canadians expect departments to be well managed.

Deputy ministers are responsible for delivering on this expectation. They are accountable for making sure their departments follow applicable rules and policies, such as those relating to procurement.

The Risk and Compliance Process helps deputy heads verify they have the controls and practices in place to meet their accountabilities and to effectively manage risks within their organizations.

Each year, departments must complete a self-assessment to review how they’re managing key areas such as financial management, procurement and technology.

Deputy heads formally attest to their assessments and outline how they plan to address any gaps identified.

Starting this year, a summary of each department’s results and any follow-up actions, will appear in their Departmental Results Reports, and TBS will publish an annual report highlighting government-wide trends.

Background

On March 20, 2024, the then President of the Treasury Board announced a series of actions and commitments to strengthen and streamline oversight of federal government management practices.

One of the actions was the introduction of a new Risk and Compliance Process, which was officially launched on June 12, 2025.

The main objectives of the Risk and Compliance Process are to:

• help deputy heads verify they have controls and practices in place to meet their accountabilities under legislation and Treasury Board policy and to effectively manage risks within their organizations
• serve as an additional tool to help TBS maintain the effectiveness of its policy suite

The Risk and Compliance Process is an annual process that will require 68 organizations to complete a self-assessment of compliance and performance in up to 11 areas of administration and a self-assessment of risk. Deputy heads are responsible for attesting to their self-assessments and taking action to address non-compliance, poor performance or unacceptable levels of risk.

A summary of each organization’s Risk and Compliance Process results and any actions taken in response will be included in their annual Departmental Results Report. In addition, TBS will annually publish a report presenting key government-wide Risk and Compliance Process findings.

The Risk and Compliance Process replaces the Management Accountability Framework, which had been TBS’s annual process to monitor the management performance of federal organizations since 2003.

Issue

How have rules around advertising changed and what is being done to ensure transparency and impartiality?

Response

As the government responds to increased uncertainty in a more dangerous and divided world, it is essential that Canadians receive timely, accurate and essential information about government priorities and initiatives.

To support this, the government has streamlined and simplified the advertising review process while maintaining strict requirements to ensure government advertising is non-partisan.

In addition to the advertising review process, a public complaints process is in place to ensure government advertising continues to meet the highest standards of non‑partisan communications.

Background

In October 2025, TBS updated advertising review criteria to clarify and streamline the process while maintaining safeguards against partisan elements. These changes, which will be piloted over a 12-month period, responded to operational challenges identified by departments and to evolving information needs in a more uncertain global environment.

Key updates include:

• Greater flexibility: The criterion to ensure that advertising is objective, factual and accurate was modified to recognize the subject-matter expertise within departments and existing responsibilities of deputy ministers and heads of communications in ensuring compliance.
• Removing subjectivity: The criterion related to “self-congratulatory in nature” was removed, as it was subjective, not well understood and applied inconsistently. Furthermore, it did not directly align with the policy definition of non-partisan communications.
• Removal of duplicative restrictions: An existing policy requirement prohibiting advertising before parliamentary approval or trade agreement ratification was removed. This requirement already exists in the Directive on the Management of Communications and Federal Identity, making the stand-alone criterion redundant.
• Refined criterion on slogans: The restriction on partisan associated slogans no longer applies when they originated in a political party platform but has since become the official name of a government program, policy or initiative. Political slogans not tied to official program names are not permitted.

Issue

What is the government’s position on Private Member’s Bill C‑230, which proposes to amend the Financial Administration Act to establish a public registry of certain federal debts that have been waived, remitted, forgiven or written off?

Response

Our government supports transparency in how public funds are managed.

We are looking at the proposed bill to make sure any new reporting rules are clear and practical and protect people’s privacy and tax information.

We look forward to ongoing debate on this bill in committee and we will continue to promote opportunities to enhance transparency while protecting fiscal integrity and privacy and meet legal obligations.

Background

Bill C‑230 proposes to amend the Financial Administration Act to require the President of the Treasury Board to establish and maintain a public registry of large debts and obligations owed by a corporation, trust company or partnership to His Majesty, as well as claims by His Majesty against such entities, where:

• the value of the debt, obligation or claim is $1,000,000 or more
• the debt, obligation or claim is owed or arose under an Act of Parliament
• the debt, obligation or claim, in whole or in part, has been waived, written off or forgiven

The registry would include:

• the name of the debtor entity
• the amount waived, written off or forgiven
• the period to which the amount relates
• any other information the President of the Treasury Board may require

The bill also proposes consequential amendments to several statutes, including the Income Tax Act and the Excise Tax Act to enable information sharing in support of the registry.

Issue

What is TBS doing in response to the Auditor General’s report, Modernizing the Pay System, tabled on March 23, 2026?

Response

We welcome the Auditor General’s report and its recommendations, which support our ongoing work to stabilize pay in the public service.

Over the past several years, we have worked to simplify pay rules, reduce manual processes, and strengthen the integrity of HR and pay practices across the Government of Canada.

A significant portion of the work to simplify pay relates to conditions of employment across many collective agreements and require the agreement of bargaining agents.

My department will continue to work with PSPC to stabilize pay operations and prepare for the future HR and pay solution.

If pressed on service standards:

We fully agree with the Auditor General’s recommendation that gaps in service standards for pay transactions must be addressed.

My department has already started important work, in coordination with PSPC, to improve how we monitor performance.

Background

The recent Office of the Auditor General of Canada (OAG) audit looks at how Public Services and Procurement Canada (PSPC) and TBS are modernizing the HR and pay system as part of the HR and Pay Transformation Project and focuses on whether PSPC and TBS are managing the project to ensure that public service employees are paid accurately and on time.

TBS is the business owner of the project, and its responsibilities include defining business requirements, ensuring the project meets the business requirements, and providing oversight of the project through senior governance committees, which it co-chairs with PSPC.

The audit has three main lines of enquiry, focusing on the simplification and standardization of pay rules and processes, eliminating the backlog of pay transactions, and the cost of processing pay.

The audit covers the period from January 1, 2017, to September 30, 2025 (for the backlog and costing, the period covered is from November 2023 to September 2025).

The overall message of the audit is that:

• PSPC and TBS were still in the planning phase of the project at the end of the audit and are not expected to complete that phase until 2027
• PSPC and TBS are managing the project to ensure that public service employees are paid accurately and on time, and that the project will provide value for money once implemented
• TBS and PSPC have time to course correct as the project evolves to address emerging risks

With respect to the three lines of enquiry, the OAG finds that:

• TBS has made slow progress in simplifying pay rules
• PSPC has made limited progress in eliminating the backlog of pay transactions
• PSPC shortened the schedule to mitigate the costs of running two systems in parallel, and PSPC will need to monitor and mitigate the risks of a shortened schedule

The OAG also finds that, as TBS has been unable to reach an agreement with unions regarding pay simplification, PSPC is developing cloud extensions estimated to cost $4 million annually.

Key findings include:

• TBS was slow in making progress to simplify and standardize pay rules and processes, which resulted in PSPC seeking cloud extensions at an annual cost of $4 million
• PSPC had begun to standardize HR and pay processes
• PSPC made limited progress in eliminating the backlog of pay transactions and missed targets for eliminating the backlog and was evolving its approach
• service standards for processing pay did not account for the entire duration of processing
• PSPC had gaps in its preliminary cost estimates; preliminary cost estimates did not include costs for departments to transition to Dayforce

Recommendations: The audit contains three recommendations (two for PSPC and one for TBS):

1. PSPC should assess and mitigate adverse effects of its approach in eliminating the backlog and assess how potential future events (such as workforce adjustment) could impact the number of pay transactions (paragraph 24)
2. TBS should, in coordination with PSPC, address gaps in service standards that support timely and accurate pay and report government-wide results in meeting the standards to help ensure that employees’ transactions are processed in a timely and accurate way (paragraph 28)
3. PSPC should include estimates of costs to departments to transition to Dayforce and develop key performance indicators to measure whether costs to process pay transactions with Dayforce will decrease compared to Phoenix (paragraph 35)

TBS agrees with the recommendation regarding service standards and timeliness.

The Office of the Chief Human Resources Officer has launched a review of the existing timeliness standards to ensure the standards and underlying methodologies remain relevant in today’s evolving operational environment. This work will be completed by March 31, 2027.

Regarding pay simplification:

• A significant portion of this work relates to conditions of employment that are negotiated with the 17 bargaining agents that represent employees in 28 different collective agreements. In these instances, pay simplification requires the agreement of bargaining agents, and negotiations take time.
• TBS has made some good progress in the previous rounds of bargaining and made policy and business processes changes under its own policy authorities. TBS will continue these efforts going forward.
• TBS informed the OAG that the cloud extensions support a range of business requirements beyond pay rules, and therefore it is not accurate to attribute the $4 million cost solely to this item. Despite this clarification, the OAG proceeded to include the statement.

Supplementary Estimates (C) 2025–26

The government is seeking $5.4 billion in voted spending, offset by a $1.4-billion reduction in statutory spending, for a net $4.0 billion.

This would advance key priorities for Canadians, including:

• defence procurement and operations ($2.2 billion)
• support for Canada Post ($1.0 billion)
• Indigenous services ($504 million)

To date, the Estimates amount to $510.7 billion, an increase of $24 billion compared to last year.

Professional services

The government is reducing spending on management and other consulting services by 20% over the next three years.

In line with this commitment, spending on management consulting dropped by 46% last year (from $837.8 million in 2024 to $449.8 million in 2025).

In 2025, professional services accounted for less than 5% of total government expenditures.

Reductions in the public service

We are returning the public service to a more sustainable level of 330,000.

About 9,800 jobs were reduced in 2024–25, with additional reductions this year due to attrition and expiring funding.

Through CER, another 16,000 positions will be reduced over three years. These are being reported on Canada.ca.

Early Retirement Incentive

The Early Retirement Incentive program will help manage reductions through attrition and voluntary departures.

This program, funded through the Public Service Pension Fund, is expected to cost $1.5 billion over five years starting in 2025–26 and save $82 million annually going forward.

Executive reductions

As the size of the public service adjusts, so too must its leadership.

The government will reduce the executive cadre by 1,000 positions, or 12%, over the next two years.

Defence investments

In total, the 2025–26 Estimates include over $47.8 billion in investments for National Defence.

The 2026–27 Main Estimates also propose over $48 billion for defence to support modern equipment, training and cooperation with international partners.

The Estimates introduce a new Central Vote 50 to provide flexibility for unforeseen national defence or security needs. Funding would require Treasury Board approval, and all allocations will be reported in the next Estimates.