Standing Committee on Government Operations and Estimates: Comprehensive Expenditure Review

Opening statement

Scott Davis
Chief Financial Officer and Assistant Deputy Minister
Shared Services Canada

Ottawa, Ontario
April 23, 2026

Greeting

Thank you, Mr. Chair, for the opportunity to discuss how Shared Services Canada will achieve savings through the Comprehensive Expenditure Review.

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

SSC’s role

At its core, Shared Services Canada (SSC) provides the Government of Canada’s shared IT foundations, such as networking, data centres, cloud services, digital tools and cyber security, so departments can deliver programs and services reliably and securely.

Since 2016, SSC’s funding has remained relatively flat while demand, reliability and complexity have increased. The department has absorbed inflationary pressures and rising demand by leveraging efficiencies and economies of scale.

Although SSC’s total appropriation in 2026–27 is 25% higher than in 2016–17, this growth is driven by time limited and targeted funding. In fact, once budgetary adjusted items and the previous Refocusing Government Spending exercise is accounted for, SSC’s base funding is lower than it was in 2016–17.

Savings

When combined with savings already delivered through the Refocused Government Spending initiative, the Comprehensive Expenditure Review reductions will significantly reduce SSC’s available funding compared with earlier years.

To make these changes, our approach was not to ask “how do we get to the number?” Instead, we asked “what should we not be doing anymore?”

The review is not only a savings exercise for SSC, it is an opportunity to accelerate enterprise-level efficiencies through enterprise-wide solutions, and by leveraging the department’s collective purchasing power for the government as a whole.

Reductions

Under the Comprehensive Expenditure Review, SSC will achieve 15% savings over three years—an ongoing decrease of $318.5 million a year.

We will do this by standardizing what we use, buying and managing technology as an enterprise, and improving how we deliver services.

SSC is standardizing platforms and realigning enterprise software offerings to reflect current needs, eliminating non-essential fixed telephone lines in government buildings and deploy cost-effective softphones to all workers.

The department continues to review, and consolidate contracts to reduce duplication, improve pricing and better align spending with enterprise needs, as while strengthening in-house capacity to reduce reliance on external consultants and contractors for ongoing operations.

Efforts to simplify the government’s cloud footprint by consolidating over 287 cloud environments into SSC’s enterprise cloud are ongoing, and we continue to consolidate by reducing the remaining 190 legacy data centres.

SSC has put in place strong governance of the review to provide oversight, track progress and ensure accountability for results.

Consulting

On professional services, SSC required additional resources during the pandemic, when we moved fast to support remote work. We are now back to pre-pandemic levels and stabilizing.

Under the Refocusing Government Spending initiative, SSC exceeded our savings target with an $81‑million reduction in professional services since 2022-23, and we plan to continue those reductions where feasible.

Conclusion

In conclusion, the savings measures we are looking to implement will ensure sound financial management in a tightening fiscal environment by eliminating duplication, addressing lower-value activities, and improving efficiency.

Thank you, Mr. Chair. I welcome your questions.

Comprehensive Expenditure Review

Issue

The Comprehensive Expenditure Review (CER) is a government-wide exercise to reduce duplication and inefficiencies and realign activities toward the core federal mandate. It will reduce the public service population by 10% from its peak in 2023‑24 and achieve savings of $9 billion in 2026-27, $10 billion in 2027-28 and $13 billion in 2028-29.

Key facts

• Under the CER, SSC will reduce its expenditures by:
  • $159.3 million in 2026-27
  • $212.4 million in 2027-28
  • $318.5 million in 2028-29 (ongoing)
• These targets include planned savings from Budget 2024’s Refocusing Government Spending initiative.

Key messages

• Under the CER, SSC will meet up to 15% in savings targets over three years, achieving ongoing savings of $318.5 million.
• Specifically, SSC will:
  • standardize platforms and realign enterprise software offerings to match current needs
  • eliminate low-use or redundant licences
  • eliminate non-essential fixed telephone lines in all Government of Canada (GC) buildings, which will reduce expenses, and deploy cost-effective softphones to all workers
  • review, consolidate and renegotiate contracts to eliminate duplication, secure better pricing and align spending with enterprise needs
  • leverage emerging technologies to automate repetitive tasks, use AI-driven tools to optimize operations and service delivery, automate common IT support requests to reduce call volumes and costs while improving user experience
  • build its in-house capacity and expertise to reduce spending on external consultants and contractors for ongoing operations
  • simplify the cloud footprint by consolidating over 287 partners’ cloud environments into SSC’s enterprise cloud (GC Cloud One)
  • reduce and rationalize the remaining 190 legacy data centres across Canada into 4 enterprise data centres, 1 high-performance computing centre, 5 consolidation data centres, and approximately 50 edge computing sites
• Further, SSC is streamlining its organizational structure and processes, simplifying oversight and reducing layers.
  • 31% of employee reductions are management
• CER will result in a 5% reduction in the number of SSC employees.

If pressed on operational impacts:

• There may be short-term pressure on service. However, SSC will mitigate this through prioritization, automation and reskilling, with the goal of maintaining or improving service levels over the long term.
• Operational IT capacity is largely preserved, with less than 3% of reductions coming from front-line IT staff.

If pressed on employees:

• SSC has invoked workforce adjustment and career transition for executives to meet its expenditure reduction targets and deliver on its ambitious digital agenda.
• On January 13, 2026, 1,339 employees, including 49 executives, were informed their positions may be impacted. SSC is aiming to reduce its workforce by approximately 477 positions to meet CER objectives.
• The goal is to reach this reduction by considering all available options, including the Early Retirement Initiative, a voluntary departure program, the selection of employees for retention or lay-off, and workforce adjustment. Minimizing the impact on employees is the top priority.
  • 1,898 SSC employees received notice they are eligible for the Early Retirement Incentive program. This program’s approval is with Parliament.
• SSC is dedicated to supporting employees during this transition. Programs and resources are available to help employees navigate career transitions and maintain their well-being, including an internal portal (Gateway to Mobility Portal) to ensure priority consideration is given to impacted SSC employees when staffing positions.
• SSC actively engaged with stakeholders, including management and bargaining agents, to ensure transparency with respect to the workforce reduction plans.
• SSC understands the impacts of CER can be stressful and is committed to supporting its employees. SSC employees are encouraged to speak with their manager, the SSC Office of the Ombuds or the Employee Assistance Program for support.

Background

Budget 2025 noted that:

To meet up to 15% in savings targets over three years, Shared Services Canada (SSC) will implement efficiencies government-wide by standardizing platforms, including realigning enterprise software offerings, to match current needs; eliminating low-use or redundant licences; and removing non-essential fixed lines.

SSC will also retire outdated technologies, systems and infrastructure that are costly to operate, difficult to secure and that limit innovation. This includes migrating workloads and hardware from remaining legacy data centres into modern facilities to reduce outage risks in the support of critical services and to shrink the government’s costly legacy IT footprint. SSC will review, consolidate and renegotiate contracts to eliminate duplication, secure better pricing and align spending with enterprise needs. SSC will achieve significant savings by transitioning to modern, cost-effective solutions and ending or reducing support for legacy systems, which are often expensive to maintain and operate due to outdated technologies and higher risks of system failure.

To modernize workflows, reduce manual effort and optimize service delivery, SSC will leverage emerging technologies to automate repetitive tasks; use AI-driven tools to optimize operations and service delivery; and automate common IT support requests to reduce call volumes and costs while improving user experience.

SSC will also build up its in-house capacity and expertise to reduce spending on external consultants and contractors for ongoing operations. By developing internal skills, reskilling staff and optimizing resource allocation, SSC will lower contracted service costs while strengthening institutional knowledge.

Digital sovereignty

Issue

Digital sovereignty refers to the Government of Canada’s ability to exercise autonomy over its digital assets and services, ensuring it can manage and protect its digital systems, data and information regardless of where technologies are developed, hosted, or supported. This protects national security, supports economic competitiveness and enables the Government of Canada to operate independently while reducing the risks of foreign interference in the digital age.

It includes:

• Data sovereignty: Ensuring data complies with national laws and remains under the jurisdiction and control of the country
• Operational sovereignty: Retaining control over how digital services are deployed and preventing reliance on, or interference from, foreign entities
• Technological sovereignty: Maintaining the ability to make independent decisions about technology without being overly dependent on monopolistic or foreign‑controlled vendors

Key facts

• Under the Directive on Service and Digital, departments and agencies are expected to prioritize computing facilities in Canada—or on Government of Canada premises abroad—for storing or handling sensitive electronic information, such as Protected B, C or classified data. This helps keep important data secure and under Canadian control.
• Under the Policy on Privacy Protection, departments and agencies must protect personal information properly, reduce privacy risks and remain open and accountable, even when it is processed or stored by third-party companies.
• The Treasury Board Secretariat’s paper Digital Sovereignty: A Framework to improve digital readiness of the Government of Canada examines the challenges related to jurisdictional complexity, reliance on global suppliers, evolving cyber security risks, and internal capacity. It underscores the need for interoperability across the Government of Canada and with trusted international partners. The framework discusses legal issues, supply chain, and technical controls that reinforce Canada’s authority over government systems.
• Shared Services Canada applies the Buy Canadian Policy in procurements to strengthen Canada’s economic resilience and industrial capacity. The policy supports domestic businesses and workers by prioritizing Canadian suppliers, materials and content wherever feasible.
• Data protection obligations are embedded in contracts with service providers through standardized security clauses, access restrictions and incident reporting requirements.

Key messages

• Digital sovereignty is a critical priority for the Government of Canada to protect essential data, reduce risks of foreign interference and strengthen domestic information technology capabilities and Shared Services Canada has been actively working to strengthen information technology diversification by reducing vendor concentration and influence in strategic areas, while promoting Canadian-made solutions.
• Shared Services Canada will also develop a sovereign made-in-Canada artificial intelligence platform that can be deployed across the government, in partnership with leading Canadian artificial intelligence companies, and enable greater access to sovereign artificial intelligence compute.
• Shared Services Canada is investing in Canadian technology capabilities and strengthening policies to protect critical infrastructure.
• Shared Services Canada has launched a procurement process to establish Sovereign Canadian Cloud capabilities for the Government of Canada through a process that prioritizes Canadian-owned and controlled cloud service providers. These efforts will secure Canadian capacity as part of the Government of Canada cloud ecosystem.

If pressed on protections:

• The Government of Canada applies a range of technical safeguards to protect data, maintain service reliability and ensure continued operation of its systems. These include secure system design; encryption to protect information in storage and in transit; access and identity management; and continuous monitoring to detect and respond to incidents.

If pressed on how Shared Services Canada strengthens digital sovereignty:

• Shared Services Canada works with Canadian telecommunications companies to provide the Government of Canada with a fast, reliable network that operates on Canadian-owned assets and routes traffic within Canada. This helps keep sensitive government data secure and under Canadian control.
• Shared Services Canada uses state-of-the-art enterprise infrastructure and multiple layers of defence, including cutting-edge sensors designed to identify and eradicate cyber threats.
• Shared Services Canada delivers hybrid hosting models to meet the Government of Canada’s needs for security, scalability and sovereignty. Hosting models range from fully Government of Canada-owned data centres (maximum sovereignty) to public cloud services (lower control, higher scalability).
• Shared Services Canada’s enterprise data centres are located within Canada and operate on Canadian-owned assets. This helps keep important data secure and under Canadian control.

Background

Due to the global dominance of U.S.-based technology vendors and the comparatively small size of Canada’s information technology (IT) sector, targeted interventions are essential to scale Canadian capabilities. Cloud computing, in particular, is dominated by Amazon Web Services, Google Cloud and Microsoft Azure, posing challenges to operational and technological sovereignty.

Advanced cyber threat actors are increasingly using supply chains to bypass traditional security defences by introducing vulnerabilities. Since 2012, Shared Services Canada (SSC) has mitigated this risk through Supply Chain Integrity (SCI) procurement reviews for equipment, software and services. These assessments help departments and agencies to identify and potentially mitigate security vulnerabilities before they impact operations.

The Government of Canada (GC) has made strategic investments in Canadian IT firms, including a March 2025 announcement by Innovation, Science and Economic Development Canada (ISED) of up to $240 million in funding for Toronto-based Cohere Inc. This investment marks Cohere as the first recipient of the artificial intelligence (AI) Compute Challenge, part of the $2 billion Canadian Sovereign AI Compute Strategy. In August 2025, the GC signed a memorandum of understanding with Cohere to explore opportunities for deploying AI technologies across the GC to enhance operations within the public service and to build out Canada’s commercial capabilities in using and exporting AI.

Government transformation

Issue

As the Government of Canada’s common information technology services provider, Shared Services Canada plays a central role in driving government transformation and creating government-wide efficiencies—in close collaboration with the Treasury Board of Canada Secretariat’s Office of the Chief Information Officer and Public Services and Procurement Canada.

Key facts

Not applicable

Key messages

• The Government of Canada is committed to transformation, and increasing government productivity while reducing the cost of operations. A more effective and efficient government will result in improved program and service delivery to Canadians and businesses.
• Shared Services Canada is playing a key role in digital transformation across the Government of Canada, by facilitating the adoption and scaling of artificial intelligence across the public service. Shared Services Canada will also achieve $318.5 million in ongoing savings through efficiencies in its internal operations.
• Aligned to the Government of Canada priority to modernize the way government procures goods and services, Shared Services Canada is reviewing all aspects of its information technology procurement by undertaking benchmarking, prioritizing Canadian vendors and sovereign infrastructure and services, and ensuring best value for Canada.
• Shared Services Canada is enabling artificial intelligence across government by:
  • developing a sovereign made-in-Canada artificial intelligence platform that can be deployed across the government in partnership with leading Canadian artificial intelligence companies, the Communications Security Establishment and the Department of National Defence
  • leading a competitive procurement process for generative artificial intelligence productivity tools for government employees, which includes 3 Canadian pre-qualified vendors
  • enabling access to sovereign artificial intelligence compute capacity for public and private research, in collaboration with the National Research Council Canada
  • applying artificial intelligence and automation across internal operations to automate common information technology support requests and reduce call volumes and costs, while improving the user experience
• Shared Services Canada is transforming the government’s hosting infrastructure from a sprawling landscape of siloed and outdated systems to modern hosting solutions. This new model combines cloud services and traditional on-premise data centres to optimize performance, reduce costs and provide flexibility.
• Shared Services Canada will advance a common government-wide desktop solution to transition departments to a standardized, cloud-managed desktop service. This will reduce complexity, standardize information technology security, increase portability and result in significant cost savings for Canadians.
• Shared Services Canada also supports the government’s broader digital transformation agenda through partner-led projects and initiatives, including enabling access to sovereign artificial intelligence compute capacity in collaboration with the National Research Council; ongoing work to improve human resources and pay for federal public servants; and enabling the Department of National Defence to modernize their systems to support the Canadian Armed Forces at home and abroad.

If pressed on cost savings:

• Under the Comprehensive Expenditure Review, Shared Services Canada will meet up to 15% in savings targets over 3 years, achieving ongoing savings of $318.5 million.
• Specifically, Shared Services Canada will:
  • standardize platforms, including realigning enterprise software offerings to match current needs
  • eliminate low-use or redundant licences
  • eliminate non-essential telephone fixed lines in all Government of Canada buildings, which will reduce expenses, and deploy cost-effective softphones to all workers
  • review, consolidate and renegotiate contracts to eliminate duplication, secure better pricing and align spending with enterprise needs
  • leverage emerging technologies to automate repetitive tasks, use artificial intelligence-driven tools to optimize operations and service delivery, automate common information technology support requests to reduce call volumes and costs while improving user experience
  • build its in-house capacity and expertise to reduce spending on external consultants and contractors for ongoing operations
  • simplify the Government of Canada cloud footprint by consolidating over 287 departmental partner cloud environments into Government of Canada Cloud One, Shared Services Canada’s enterprise cloud
  • reduce and rationalize the remaining 190 legacy data centres across Canada into 4 enterprise data centres, 1 High Performance Computing Centre, 5 consolidation data centres, and approximately 50 edge computing sites

Background

Shared Services Canada is responsible for modernizing, securing and managing the information technology (IT) infrastructure that supports departments and agencies. This ensures reliable and effective service delivery to Canadians, both domestically and abroad. The Treasury Board of Canada Secretariat’s Office of the Chief Information Officer sets government-wide direction for data, IT, cyber security and service management, while individual departments and agencies remain responsible for their own applications and data.