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Public Services and Procurement Canada
Quarterly Financial Report for the quarter ended December 31, 2025

Statement outlining results, risks and significant changes in operations, personnel and programs.

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List of tables

Introduction

This Quarterly Financial Report (QFR) should be read in conjunction with the 2025 to 2026 Estimates (Main Estimates) and Supplementary Estimates. It has been prepared by management as required under section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Directive on Accounting Standards, Government of Canada (GC) 4400 departmental Quarterly Financial Report. It has not been subject to an external audit or review.

In this section

Mandate, mission and vision

Public Works and Government Services Canada (PWGSC) was established effective June 20, 1996, under the Department of Public Works and Government Services Act. As of November 4, 2015, PWGSC started operating as Public Services and Procurement Canada (PSPC). PSPC plays an important role in the daily operations of the Government of Canada. It supports federal departments and agencies in the achievement of their mandated objectives as their central purchasing agent, real property manager, linguistic authority, treasurer, accountant, pay and pension administrator, and common service provider. PSPC’s mission is to deliver high-quality, central programs and services that ensure sound stewardship on behalf of Canadians and meet the program needs of federal institutions. Its vision is to excel in government operations.

Further details on the department's authority, mandate and core responsibilities can be found in the 2025 to 2026 Estimates (Main Estimates—Part II) and the Public Services and Procurement Canada’s 2025 to 2026 Departmental Plan for the fiscal year ending March 31, 2026.

Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting and a special-purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities. The accompanying Table 3: Statement of authorities (unaudited) includes the department's spending authorities granted by Parliament, and those used by the department and are consistent with the Main Estimates and Supplementary Estimates for the current fiscal year.

The authority of Parliament is required before money can be spent by the government. Approvals are given in the form of annually approved limits through appropriation acts, or through legislation in the form of statutory spending authority for specific purposes.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes, under certain conditions, the preparation of a special warrant to be signed by the Governor General authorizing payments to be made out of the Consolidated Revenue Fund. Special warrants are deemed to be an appropriation for the fiscal year in which they are issued.

Special warrants issued during the first quarter of the current fiscal year were included in the total appropriations in the 2025 to 2026 Main Estimates.

The department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

Public Services and Procurement Canada's financial structure

PSPC provides services to many government departments, agencies and Crown corporations through a variety of funding mechanisms. This includes budgetary authorities that are comprised of voted and statutory authorities, as well as non-budgetary authorities. The voted budgetary authorities include operating expenditures, vote-netted revenues and capital expenditures, while the statutory authorities are mainly composed of revolving funds, employee benefit plans and payments in lieu of taxes (PILT). The non-budgetary authorities consist primarily of the Seized property working capital account. The description can be found in Seized property account.

PSPC's complex financial structure may result in significant fluctuations in authorities on a quarterly basis, which are due to timing differences that are resolved by year-end. These are summarized in the next 4 subsections:

Cost-recovery basis

For the most part, PSPC delivers its services on a cost-recovery basis, generating revenues via revolving fund (the funds) organizations and programs within the operating vote. These organizations and programs are mainly designed to provide services to other government organizations and are expected to recover the cost of their operations through revenues. However, the costs incurred by the funds are usually disbursed prior to invoicing the client, which generally occurs upon completion of a project or after services are rendered, and thus revenues may be collected in a subsequent quarter.

Project management

PSPC manages a variety of real property projects that progress through phases from planning to funding and from procurement to construction. Historical trends have shown that expenditures against these projects are not incurred evenly throughout the year; thus, quarter-to-quarter fluctuations are normal. Such projects include:

Payments in lieu of taxes

PILT issued by PSPC are funded through a statutory vote and paid on behalf of other participating federal departments. Payments are subsequently recovered from the participating departments and are recorded as statutory grants in the Public Accounts of Canada. Timing fluctuations can occur between the payments and the recoveries from the other departments.

Seized property account

PSPC also manages seized property for the Government of Canada pursuant to the Seized Property Management Act. The financial management of this activity is undertaken through the non-budgetary Seized property working capital account. Charged to this account are expenditures and advances made to maintain and manage any seized or restrained property. PSPC recovers its costs from this account once the property owner loses the right to the property and it is disposed of.

Highlights of fiscal quarter and fiscal year-to-date results

This section highlights the financial results and explanations for variances between the fiscal quarter and fiscal year-to-date ended on December 31, 2025, compared with the same period of the previous year.

In this section

Significant changes to authorities

As presented in Table 3: Statement of authorities (unaudited), year-to-date PSPC authorities available for use increased by $1,672.2 million as compared to the same quarter of the previous year ($7,351.2 million in the current fiscal year compared to $5,679.0 million in the previous fiscal year). The items responsible for the overall increase are outlined in Table 1: Year-over-year variances in authorities available for use, followed by a description for each variance.

Table 1: Year-over-year variances in authorities available for use (in millions of dollars)
Initiatives Operating Capital Budgetary statutory authorities Total variance
Planning and investment in PSPC’s assets portfolio 4.8 1,258.9 2.4 1,266.1
Next generation Human Resources and pay initiative 132.5 0 6.1 138.6
Office portfolio reduction plan 102.0 0 0 102.0
Price and volume protection 72.4 0 0 72.4
Accommodation and real property services for the Canada Revenue Agency 36.1 0 0 36.1
Collective bargaining 23.9 0 1.0 24.9
Canada’s 2025 G7 Presidency 19.9 0 0 19.9
Card acceptance and postage 13.7 0 0 13.7
Other 2.9 0 (4.4) (1.5)
Cumulative variance in authorities available for use 408.2 1,258.9 5.1 1,672.2

Groupings can change between quarters due to materiality of initiatives.

Amounts may not balance with other public documents due to rounding.

Planning and investment in Public Services and Procurement Canada’s assets portfolio: increase of $1,266.1 million

The increase reflects the department’s current funding approval to deliver on its long-term capital funding plan, and to align PSPC’s authorities with its planned expenditures per the Investment Plan (a detailed 5-year plan for investments derived from the PSPC’s Asset Long-Term Strategy and Plans) to deliver major projects and enable the implementation of critical infrastructure projects.

Next generation Human Resources and pay initiative: increase of $138.6 million

The increase is related to finalizing building and testing the new integrated Human Resources (HR) and pay solution and begin carrying out change management activities with departments and agencies, offset by authorities received in the prior year for the Human Capital Management Feasibility Analysis Project.

Office portfolio reduction plan: increase of $102.0 million

Budget 2024 announced funding for PSPC to reduce its office portfolio by 50%. This funding, which is expected to be recovered through substantial short and long-term cost savings, will help to accelerate the ending of leases and disposal of underused federal properties. To advance work on the Office Portfolio Reduction Plan (OPRP), PSPC sought access to Vote 1 - operating funding, for building decommissioning, moves, due diligence for disposals, and workplace optimization in retained assets.

Price and volume protection: increase of $72.4 million

The increase is a result of funding received for the protection from inflation and volume variations relating to space requirements for real property elements over which PSPC has very little or no control such as rent, utilities, and payments in lieu of taxes.

Accommodation and real property services for the Canada Revenue Agency: increase of $36.1 million

The increase is for PSPC’s provision of accommodation and real property services to the Canada Revenue Agency (CRA). Adjustments are required every year to reflect changes in costs and in the amount of space occupied.

Collective bargaining: increase of $24.9 million

The increase is mainly due to a Treasury Board Vote 15 allocation for compensation adjustments, primarily to address insufficient funding for the Commerce and Purchasing group collective agreement.

Canada’s 2025 G7 presidency: increase of $19.9 million

Canada hosted the G7 Summit in 2025. PSPC supported other government departments for the planning, organization and delivery of the event. PSPC provided accommodation, special events management, procurement, and interpretation services.

Card acceptance and postage: increase of $13.7 million

Federal departments and agencies that accept debit or credit card payments for goods and services incur transaction fees. Postage fees are also incurred for mailing cheques. Both types of fees are paid centrally by the Receiver General. As treasurer, PSPC manages these fees on behalf of federal departments and agencies. The increase in funding was mainly due to an increase in estimated revenues to be collected by departments and agencies using payment cards and a projected increase in the fees charged by the card brands.

Other: decrease of $1.5 million

The decrease is the result of funding variances in miscellaneous projects and activities.

Significant changes to year-to-date net expenditures

As presented in Table 4: Departmental budgetary expenditures by standard object (unaudited), year-to-date total net budgetary expenditures have increased by $481.5 million as compared to the same quarter of the previous year ($4,685.8 million in the current fiscal year compared to $4,204.3 million in the previous fiscal year).

Table 2: Year-over-year variances in net budgetary expenditures (presented by standard object) (in millions of dollars)
Standard object December 31, 2025 year-to-date used at quarter-end December 31, 2024 year-to-date used at quarter-end Year-over-year variance
Personnel 1,639.4 1,644.3 (4.9)
Transportation and communications 69.6 63.8 5.8
Information 8.3 12.5 (4.2)
Professional and special services 2,096.3 1,884.3 212.0
Rentals 1,047.1 981.9 65.2
Repair and maintenance 756.7 817.9 (61.2)
Utilities, materials and supplies 78.5 55.1 23.4
Acquisition of land, buildings and works 1,086.5 721.4 365.1
Acquisition of machinery and equipment 60.5 65.4 (4.9)
Transfer payments 167.6 141.2 26.4
Public debt charges 65.4 71.3 (5.9)
Other subsidies and payments 310.0 266.8 43.2
Revenues netted against expenditures (2,700.1) (2,521.6) (178.5)
Total net budgetary expenditures 4,685.8 4,204.3 481.5

Comparative figures have been reclassified to conform to the current year's presentation.

Amounts may not balance with other public documents due to rounding.

The year-over-year net increase of $481.5 million is mainly attributable to:

Risks and uncertainties

PSPC integrates risk management principles and practices into business planning, decision-making and organizational processes to identify threats and minimize negative impacts, and maximize opportunities across its diverse range of services and operations. Risk management at PSPC is carried out in accordance with the Treasury Board of Canada Secretariat's Framework for the Management of Risk, Risk and Compliance Process, and PSPC's Integrated Risk Management Framework.

The key risks identified as having a potential financial impact on PSPC's operations are listed in the following section.

In this section

Funding mechanism

PSPC may be unable to achieve its departmental investment objectives and targets, due to the variety of funding mechanisms employed by the department and the need to have better tools to effectively implement the OnePSPC concept, which may impede on-going relationships with clients and the efficiency and effectiveness of the department’s programs and services. To mitigate this risk, PSPC is taking the following measures, among others:

Global supply

PSPC’s service delivery may encounter challenges due to the impact of disruptions to trading relationships, the increasing price of commodities, increasing uncertainties in supply chains, and the security of those supply chains caused by geopolitical tensions, which could impact stakeholder trust and our clients’ ability to achieve their policy and program objectives, and the public’s trust in the Government of Canada. To mitigate this risk, PSPC is taking the following measures, among others:

Effective delivery

PSPC may encounter delays to achieving full stabilization of pay administration for the Government of Canada (including pay processing and transfer of information to the pension administrator) as a result of the sustained increase in HR and pay events for public servants while facing capacity constraints which could further impede efforts to increase stakeholder trust and lessen liabilities to the Government of Canada. To mitigate this risk, PSPC is taking the following measures, among others:

Compromised assets

The integrity, safety and accessibility of PSPC real property and infrastructure assets could be compromised by climate change, natural disasters, infrastructure deterioration and original design deficiencies, as well as human related actions which may impede the continuity of government operations and the wellbeing of Canadians. To mitigate this risk, PSPC is taking the following measures, among others:

Supply and delivery

The effective and efficient delivery of major PSPC initiatives may be impeded due to the nature of large-scale and complex work (project scale, complexities, partner dependencies, evolving security requirements) along with current global events (inflation, supply delays and industry capacity limitations) which may affect the department’s credibility with stakeholders. To mitigate this risk, PSPC is taking the following measures, among others:

Significant changes to operations, personnel and programs

This section highlights significant changes in operations, personnel, and programs during the third quarter of the current fiscal year.

Approval by senior officials

Original signed by:

Arianne Reza
Deputy Minister
Gatineau, Canada
February 25, 2026

Lindsay Janota on behalf of
Michael Hammond, CPA
Chief Financial Officer and
Assistant Deputy Minister
Gatineau, Canada
February 16, 2026

Appendix

Table 3: Statement of authorities (unaudited)—For the quarter ended December 31, 2025 (in thousands of dollars)
Breakdown by authorities Total available for use for the year ending March 31, 2026table 3 note 1table 3 note 2 Used during the quarter ended December 31, 2025 for fiscal year ending March 31, 2026 Year-to-date used at quarter-end for fiscal year ending March 31, 2026 Total available for use for the year ending March 31, 2025table 3 note 1table 3 note 2 Used during the quarter ended December 31, 2024 for fiscal year ending March 31, 2025 Year-to-date used at quarter-end for fiscal year ending March 31, 2025
Vote 1: gross operating expenditure 5,284,200 1,230,362 3,396,227 4,819,511 1,182,173 3,352,942
Vote 1: vote-netted revenues (1,461,704) (425,670) (1,045,446) (1,405,199) (231,840) (818,236)
Vote 1: net operating expenditures 3,822,496 804,692 2,350,781 3,414,312 950,333 2,534,706
Vote 5: capital expenditures 3,313,905 1,080,920 1,825,827 2,055,000 520,953 1,226,864
Real Property Services revolving fund: gross expenditures 2,687,023 748,953 1,696,332 2,451,434 709,015 1,740,541
Real Property Services revolving fund: revenues (2,686,323) (705,128) (1,531,378) (2,430,634) (680,139) (1,564,594)
Real Property Services revolving fund: net expenditures 700 43,825 164,954 20,800 28,876 175,947
Translation Bureau revolving fund: gross expenditures 172,705 34,554 100,159 183,945 45,722 122,028
Translation Bureau revolving fund: revenues (166,894) (24,402) (96,475) (178,870) (50,936) (118,814)
Translation Bureau revolving fund: net expenditures 5,811 10,152 3,684 5,075 (5,214) 3,214
Optional Services revolving fund: gross expenditures 32,062 (33,197) 43,089 15,104 18,568 12,039
Optional Services revolving fund: revenues (33,226) (16,047) (26,786) (15,208) (11,401) (19,961)
Optional Services revolving fund: net expenditures (1,164) (49,244) 16,303 (104) 7,167 (7,922)
Total of all revolving funds: gross expenditures 2,891,790 750,310 1,839,580 2,650,483 773,305 1,874,608
Total of all revolving funds: revenues (2,886,443) (745,577) (1,654,639) (2,624,712) (742,476) (1,703,369)
Total revolving fund: net expenditures 5,347 4,733 184,941 25,771 30,829 171,239
Other budgetary statutory authorities: contributions to employee benefit plans 208,751 52,187 156,563 182,732 43,396 130,186
Other budgetary statutory authorities: minister of Public Services and Procurement—Salary and motor car allowance 102 45 121 99 24 74
Other budgetary statutory authorities: refunds of amounts credited to revenues in previous years 0 0 0 0 0 0
Other budgetary statutory authorities: spending of proceeds from the disposal of surplus Crown assets 558 1 2 1,099 1 6
Other budgetary statutory authorities: collection agency fees 1 0 0 2 2 2
Other budgetary statutory authorities: payment in lieu of taxes to municipalities and other taxing authoritiestable 3 note 2 0 (34,433) 167,562 0 (13,568) 141,223
Total other budgetary statutory authorities 209,412 17,800 324,248 183,932 29,855 271,491
Total budgetary authorities 7,351,160 1,908,145 4,685,797 5,679,015 1,531,970 4,204,300
Non-budgetary authorities 0 0 0 0 0 0
Total authorities 7,351,160table 3 note 3 1,908,145 4,685,797 5,679,015table 3 note 3 1,531,970 4,204,300

Table 3 notes

Table 3 note 1

Includes only authorities available for use and approved by Parliament at quarter-end. Amounts may not balance with other public documents due to rounding.

Return to table 3 note 1 referrer

Table 3 note 2

Consistent with the presentation in the Main Estimates, "Total available for use for the year", for both fiscal years ending March 31, 2026 and March 31, 2025, under "PILT", is presented net of planned PILT made to municipalities and the equivalent planned recoveries from other government departments. A description of PILT is provided in section Public Services and Procurement Canada's financial structure of this report.

Return to table 3 note 2 referrer

Table 3 note 3

The total available for use for the year ending March 31, 2026 experienced a net increase of $1,672.2 million as compared to the previous fiscal year.

Return to table 3 note 3 referrer
Table 4: Departmental budgetary expenditures by standard object (unaudited)—For the quarter ended December 31, 2025 (in thousands of dollars)
Breakdown by standard object Planned expenditures for the year ending March 31, 2026table 4 note 1table 4 note 2 Expended during the quarter ended December 31, 2025 for fiscal year ending March 31, 2026 Year-to-date used at quarter-end for fiscal year ending March 31, 2026 Planned expenditures for the year ending March 31, 2025table 4 note 1table 4 note 2 Expended during the quarter ended December 31, 2024 for fiscal year ending March 31, 2025 Year-to-date used at quarter-end for fiscal year ending March 31, 2025
Expenditures: personnel 2,253,651 552,185 1,639,407 2,127,827 597,826 1,644,335
Expenditures: transportation and communications 114,358 32,279 69,624 72,403 26,161 63,760
Expenditures: information 38,523 3,404 8,278 34,932 4,354 12,542
Expenditures: professional and special services 3,642,724 941,285 2,096,325 2,501,508 783,701 1,884,292
Expenditures: rentals 1,420,996 369,197 1,047,080 1,344,325 335,786 981,924
Expenditures: repair and maintenance 1,722,749 308,421 756,679 1,530,312 312,654 817,893
Expenditures: utilities, materials and supplies 164,501 (25,731) 78,510 175,835 32,417 55,057
Expenditures: acquisition of land, buildings and works 1,574,735 763,498 1,086,451 1,190,793 314,967 721,362
Expenditures: acquisition of machinery and equipment 160,545 33,949 60,539 171,650 26,217 65,377
Expenditures: transfer paymentstable 4 note 2 288 (34,433) 167,562 0 (13,568) 141,223
Expenditures: public debt charges 120,441 21,470 65,409 119,632 23,296 71,300
Expenditures: other subsidies and payments 485,796 113,868 310,018 439,709 62,475 266,840
Total gross budgetary expenditures 11,699,307 3,079,392 7,385,882 9,708,926 2,506,286 6,725,905
Less revenues netted against expenditures: revolving funds revenues (2,886,443) (745,577) (1,654,639) (2,624,712) (742,476) (1,703,369)
Less revenues netted against expenditures: vote-netted revenues (1,461,704) (425,670) (1,045,446) (1,405,199) (231,840) (818,236)
Total revenues netted against expenditures (4,348,147) (1,171,247) (2,700,085) (4,029,911) (974,316) (2,521,605)
Total net budgetary expenditures 7,351,160 1,908,145 4,685,797table 4 note 3 5,679,015 1,531,970 4,204,300table 4 note 3

Table 4 notes

Table 4 note 1

Includes only authorities available for use and approved by Parliament at quarter-end. Amounts may not balance with other public documents due to rounding.

Return to table 4 note 1 referrer

Table 4 note 2

Consistent with the presentation in the Main Estimates, "Planned expenditures for the year" for both fiscal years ending March 31, 2026 and March 31, 2025, under "Transfer payments", are presented net of planned PILT made to municipalities and the equivalent planned recoveries from other government departments. A description of PILT is provided in section Public Services and Procurement Canada's financial structure of this report.

Return to table 4 note 2 referrer

Table 4 note 3

The year-to-date used at quarter ended December 31, 2025 experienced a net increase of $481.5 million as compared to the same quarter of the previous fiscal year.

Return to table 4 note 3 referrer

© His Majesty the King in Right of Canada, as represented by the Minister of Public Services and Procurement Canada, 2026

ISSN: 2819-2117

Page details

2026-03-03