President of the Treasury Board appearance before the Standing Committee on Government Operations and Estimates (OGGO) – Supplementary Estimates (A) 2024-25 – June 2024

On this page

1. Scenario Note

Appearance Specific Information

1. Overview of the Supplementary Estimates (A) 2024-25 (Government-wide & TBS-specific)
2. Reports of the Parliamentary Budget Officer (Main Estimates 2024-25 & Supplementary Estimates (A) 2024-25)
3. Estimates Reform
4. Budget 2024
   1. TBS Specific Items
   2. Supplementary Estimates (A) 2024-25 Items

Public Servants, HR Management and Guidance

5. Canada Life
6. Hybrid Work in the Public Service
7. Collective Bargaining
8. Directive on Conflict of Interest
9. Official Languages in the Public Service and Modernization of the Official Languages Act
10. Whistleblower Protection
11. Support for Black Public Servants
12. Phoenix-Related Issues
13. NextGen HR and Pay

Mandate Commitments

14. President of the Treasury Board Priorities

Other Issues for TBS

15. Refocusing Government Spending (Government-wide & TBS Specific)
16. Measures to strengthen management and oversight
17. Professional Services
18. OAG Report on McKinsey & Company
19. Disposal of federal real property
20. Greening Government
21. Access to Information and Privacy (ATIP)
22. Cyber Security Incidents & Roles and Responsibilities and Recent Events
23. Responsible use of artificial intelligence (AI)
24. Government of Canada Digital Talent Strategy

Key Issues

25. Supplementary Estimates (A), 2024–25: appearance-specific key issues

Highlights

26. Supplementary Estimates (A), 2024–25: highlights

A. Scenario note

Appearance of the Honourable Anita Anand, P.C., M.P., President of the Treasury Board, and TBS Officials Before the House of Commons Standing Committee on Government Operations and Estimates on Supplementary Estimates (A), 2024–25

Background

The President of the Treasury Board tabled the Supplementary Estimates (A), 2024–25 on May 23, 2024.

The Supplementary Estimates (A) were referred to various House of Commons standing committees (the House of Commons Standing Committee on Government Operations and Estimates (OGGO) for TBS). Committees may examine and amend the Supplementary Estimates (A); however, this appearance will be for subject matter only as the Supplementary Estimates (A) will have been reported back to the House of Commons prior to this appearance and are expected to be adopted in the House the week of June 10.

OGGO heard from the President and TBS officials on May 29, 2024, as part of their examination of the Main Estimates 2024–25. The President and TBS officials have been invited back on the Supplementary Estimates (A), 2024–25 on June 19, 2024.

The Senate Standing Committee on National Finance (NFFN) has invited TBS officials to appear on June 18, 2024, along with officials from Transport Canada and the Department of Finance Canada.

Day of: scenario (Standing Committee on Government Operations and Estimates)

The meeting is expected to begin at 4:30 pm, subject to delays in the Chamber, and will consist of two panels:

1. the first hour (4:30 pm to 5:30 pm) is currently not scheduled
2. the second hour (5:30 pm to 6:30 pm) consists of the President of the Treasury Board and TBS officials on the Supplementary Estimates (A), 2024–25

Briefing binder

A binder has been prepared in anticipation of the appearance, which the President’s office and supporting witnesses received on June 12, 2024. The binder provides an overview of the key government-wide items included in the Estimates as well as material on:

• key issues such as Budget 2024 items
• Office of the Auditor General and Office of the Procurement Ombud report concerning McKinsey & Company
• collective bargaining
• Canada Life
• the use of professional services
• measures to strengthen management and oversight
• cyber security incidents
• the responsible use of artificial intelligence (AI)

  One placemat focuses on the Supplementary Estimates (A) and one placemat highlights key issues.

Supporting officials

• Bill Matthews, Secretary of the Treasury Board of Canada
• Annie Boudreau, Comptroller General of Canada
• Antoine Brunelle-Côté, Assistant Secretary, Expenditure Management Sector
• Karen Cahill, Assistant Secretary and Chief Financial Officer
• Emilio Franco, Executive Director, Procurement, Materiel, and Communities Directorate, Acquired Services and Assets Sector
• Francis Trudel, Associate Chief Human Resources Officer
• Dominic Rochon, Chief Information Officer of Canada

Other relevant information

OGGO and the House of Commons Standing Committee on Public Accounts (PACP) continue their ongoing studies on the ArriveCAN application. The members have been critical of the government’s procurement process as a whole and of the rules governing contracting and procurement. Interest has also been expressed in the Auditor General’s and Procurement Ombud’s reports and action being taken by the government to address the findings. Questions from members have also focused on:

• management of public funds in the federal public service in the context of ArriveCAN
• conflict of interest issues related to public servants having other employment income sources
• executive compensation
• ministerial accountability in contracting practices
• diversity in procurement

OGGO is also conducting a study on federal government consulting contracts awarded to McKinsey & Company, having held two meetings on this since the release of the Procurement Ombud’s Report on McKinsey & Company, and one meeting after the release of the Office of the Auditor General report on professional services. The concerns from MPs have been similar to the ones regarding ArriveCAN.

OGGO tabled its report in relation to the study on the changeover of the Public Service Health Care Plan (PSHCP) from Sun Life to the Canada Life insurance company on June 3, 2024, and a government response was requested. TBS officials appeared alongside officials from Public Services and Procurement Canada (PSPC) and Canada Life on December 7, 2023. Representatives from the Public Service Alliance of Canada (PSAC) appeared on February 26, 2024.

OGGO and Senate Standing Committee on National Finance (NFFN) remain concerned with the level of transparency and accountability from the government as it relates to the procurement process and the tablings of the financial documents (such as the Public Accounts and the timing of the tabling for Estimates documents as opposed to the budget).

1. Overview of Supplementary Estimates (A), 2024–25

Issue

Additional spending presented in Supplementary Estimates (A), 2024–25, both across government and specifically for the Treasury Board of Canada Secretariat (TBS)

Response

Canadians and the parliamentarians who represent them have the right to know how public funds are being spent and to hold the government to account.

Supplementary Estimates (A), 2024–25 present $12.7 billion in incremental spending, which includes $11.2 billion in new voted spending and $1.5 billion in forecasted statutory budgetary expenditures.

These Supplementary Estimates present planned expenditures to support a variety of government priorities, including:

• settlements addressing past grievances and historic harms committed against Indigenous Peoples
• Indigenous services
• support and services for newcomers to Canada
• purchase incentives for zero-emission vehicles

Treasury Board of Canada Secretariat

TBS is seeking parliamentary approval for $2.4 million in Vote 1 – Program Expenditures for the implementation of the Treasury Board’s new obligations under the modernized Official Languages Act.

TBS is also seeking $250 million to increase Treasury Board Vote 5 – Government Contingencies from $750 million to $1 billion.

This is the first increase in Treasury Board Vote 5 since 2000–01 and will ensure that the government can continue to quickly and adequately respond to urgent situations in the future.

Background

Estimates present information on additional spending requirements that were either not sufficiently developed in time for inclusion in the Main Estimates or have subsequently been refined to account for developments in particular programs and services.

The Supplementary Estimates (A), 2024–25 present a total of $12.7 billion in incremental budgetary spending, which reflects $11.2 billion to be voted and a $1.5 billion increase in forecast statutory expenditures.

If approved by Parliament, voted budgetary spending would increase by $11.2 billion (5.8%), in comparison to Main Estimates, to a total of $248.2 billion. Much of the new voted spending is for:

• settlements addressing past grievances and historic harms committed against Indigenous Peoples (Department of Crown-Indigenous Relations and Northern Affairs), notably:
  • $1.8 billion for agricultural benefits claims
  • $1.5 billion for Federal Indian Day Schools and Indian Residential Schools Day Scholars settlements
  • $1.0 billion for the Specific Claims Settlement Fund
  • $447.9 million for historical claims
  • $393.1 million for land-related claims and litigation
  • $303.6 million for the federal Indian Boarding Home settlement
• Indigenous services (Indigenous Services Canada), notably:
  • $769.7 million for water and wastewater treatment
  • $633.5 million for First Nations child and family services
• support and services for migrants (Immigration, Refugees and Citizenship Canada):
  • $411.2 million for the Interim Federal Health Program
  • $314.5 million for the Interim Housing Assistance Program
• purchase incentives for zero-emission vehicles (Transport Canada):
  • $604.9 million

These Estimates also show, for information purposes, changes in planned statutory expenditures. Statutory budgetary expenditures are forecast to rise $1.5 billion (0.6%) to a total of $259.1 billion. The largest changes reflect updated forecasts shown in Budget 2024:

• a $1.9 billion increase in public debt costs ($764.0 million in interest on unmatured debt and $1.1 billion in other interest costs), primarily due to higher projected interest rates and higher borrowing requirements
• a $533.0 million decrease in benefits for the elderly (a $469.0 million decrease in the Guaranteed Income Supplement and a $123.0 million decrease in the Allowance, partially offset by a $59.0 million increase in Old Age Security) owing to revisions to the projected number of beneficiaries

Statutory non-budgetary expenditures are forecast to rise, reflecting the additional allocation of $1.3 billion to the International Monetary Fund’s Poverty Reduction and Growth Trust announced in September 2023.

Funding for the Treasury Board of Canada Secretariat

Vote 1: Program expenditures

TBS is seeking parliamentary approval to increase its Vote 1 –  Program Expenditures in 2024–25 by $2.4 million.

This funding, announced in the 2021 Economic and Budget Update and subsequently reprofiled to 2024–25, will lay a foundation for the implementation of the Treasury Board’s new obligations under the modernized Official Languages Act.

More specifically, funds will provide the Official Languages Centre of Excellence at TBS with the ability continue activities to support the Treasury Board in exercising its strengthened authorities under the revised act by enabling the department to lay a robust foundation and increase TBS’s capacity to measure compliance. It will also enable TBS to start establishing a baseline for compliance with new legislative requirements and increase its oversight capacity to monitor federal institutions compliance with their official languages requirements.

Treasury Board Vote 5 – Government Contingencies

TBS is also seeking $250 million in Treasury Board Vote 5 – Government Contingencies, which will increase from $750 million to $1 billion.

In recent years, urgent and unforeseen pressures such as support for Ukraine, out of court settlements, and COVID‑19 response measures have placed considerable pressure on Treasury Board Vote 5.

This is the first increase in Treasury Board Vote 5 since 2000-01, and it will ensure that the government can continue to quickly and adequately respond to urgent situations in the future.

2. Recent reports by the Parliamentary Budget Officer (Main Estimates and Supplementary Estimates (A), 2024–25)

Issue

The Parliamentary Budget Officer (PBO) releases regular reports on Main and Supplementary Estimates.

The PBO report on Main Estimates examines the year-over-year growth in public debt charges, and it forecasts spending on public debt charges will reach $62.0 billion by 2028–29.

The PBO report on Supplementary Estimates (A) provides an overview of the $12.7 billion in proposed spending and highlights Budget 2024, “Indigenous Reconciliation” and “Professional and Special Services.”

Background

Main Estimates report

On March 7, 2024, the PBO released a report on the 2024–25 Main Estimates that provides an overview of planned spending, including the outcome of the refocusing government spending initiative and highlighting major expenditures on benefits for the elderly, the Canada Health Transfer and public debt charges.

Refocusing government spending

The report highlights that the Main Estimates present reallocated amounts for refocusing government spending on a net basis and, as a result, the effects if reductions are not identifiable.

The report concludes that, for the first time since the pandemic, total spending seeking approval through the Main Estimates has decreased, and this is partially due to the savings identified under refocusing government spending. However, the PBO observes that total spending in the Main Estimates remains roughly 50% higher than in the pre-pandemic 2019-20 Main Estimates.

Major expenditures

The report examines major expenditures on benefits for the elderly, the Canada Health Transfer and public debt charges.

The report notes that spending on benefits for the elderly (Old Age Security, Guaranteed Income Supplement and Allowance payments) is set to increase by $5.6 billion (7.5%) to a total of $81.1 billion in 2024–25. The PBO forecasts that the total spending on benefits for the elderly will reach $99.7 billion in 2028–29, driven by a large number of seniors, inflation and policy decisions to increase benefits.

The report observes that the Canada Health Transfer is projected to increase by $2.7 billion (5.4%) to $52.1 billion in 2024–25 and is predicted to reach $62.7 billion by 2028–29.

Public debt charges

The PBO remarks that the 2024–25 Main Estimates includes $46.5 billion in statutory spending for servicing public debt – an increase of $4.8 billion compared to the end of 2023–24 – explaining that the increase is “due to a substantial increase in the stock of public debt over the course of the pandemic combined with subsequent high effective interest rates.” The PBO anticipates interest rates to stabilize after 2024–25, slowing the growth of public debt charges. The PBO forecasts spending on public debt charges to reach $62.0 billion by 2028–29.

Supplementary Estimates (A) report

On May 30, 2024, the PBO released a report on the Supplementary Estimates (A), 2024–25. The report provides an overview of the $12.7 billion in spending detailed in these estimates and highlights Budget 2024, “Indigenous Reconciliation” and “Professional and Special Services” with a lens on the refocusing government spending exercise.

Budget 2024

The PBO notes that Supplementary Estimates (A) is the first opportunity for the government to seek Parliament’s approval for Budget 2024 items through the Estimates.

The PBO states Supplementary Estimates (A) is seeking $1.6 billion in funding for 11 Budget 2024 items.

The PBO notes at this point last year, approximately $7.2 billion for 17 Budget 2023 items had appeared in the Estimates.

The PBO identifies that there is currently no way to track through the Estimates off-cycle measures that were reported in the budget.

Indigenous reconciliation

The PBO notes nearly two thirds of proposed spending in these Supplementary Estimates ($7.8 billion, or 61.8%) falls under the Indigenous portfolio, including $5.6 billion for the Department of Crown-Indigenous Relations and Northern Affairs and $2.2 billion for Department of Indigenous Services Canada.

• This brings the proposed authorities to date for the two organizations to $39.8 billion this fiscal year, which represents a 175% increase over their combined budgetary expenditures in 2017–18.

The PBO calculates that the majority of the proposed spending in these Supplementary Estimates – over $5 billion – relates to settlements and Indigenous claims.

The PBO highlights the following notable amounts for Indigenous programs:

• $770 million for the First Nations Water and Wastewater Enhanced Program
• $633 million to maintain and advance the reform of the First Nations Child and Family Services Program

Professional and special services

The PBO observes that spending on professional and special services has been steadily increasing over the past several years, with planned spending in 2023–24 reaching a record of $21.6 billion.

The PBO notes that these Supplementary Estimates include roughly $704 million in proposed spending on professional and special services, bringing total proposed authorities for 2024–25 in this category to $19.8 billion.

The PBO highlights that the government announced spending reductions of $500 million in 2023–24 and $1.7 billion ongoing, to consulting, professional services and travel as part of Budget 2023, to reduce the scale and pace of spending growth in these areas.

The PBO notes that TBS froze $500 million in 2023–24 to achieve the savings.

• The PBO highlights that its report Refocusing Government Spending in 2023–24 noted that if organizations could not find savings in consulting, professional services or travel, they were required to find savings elsewhere. However, the PBO did not receive a breakdown by spending type for all organizations, making it is unclear how much of the $500 million in frozen allotments were tied to consulting, professional services and travel.
• The PBO notes that total lapsed amounts for consulting, professional services and travel in 2023–24 will not be known until the Public Accounts are tabled in the fall.

Finally, the PBO states the government has not provided a breakdown by spending type for planned spending reductions under the refocusing government spending exercise for 2024–25 and future years, and it will continue to monitor the implementation of the refocusing government spending exercise.

3. Estimates reform

Issue

Changes made to Estimates and other financial reporting to increase transparency and respond to recommendations and addressing the PBO’s request for a fixed budget date that falls before the tabling of the Main Estimates

Response

The Government of Canada is committed to making it easier for parliamentarians and Canadians to hold the government to account for its spending plans and decisions.

Ongoing changes have been made to address comments received from parliamentarians to increase transparency of financial information and to make Estimates documents easier to understand.

The government continues to welcome feedback on its documents and processes.

If pressed on a set date for the budget or including all budget items in the Main Estimates:

Setting a specific date for presenting the budget would restrict the government’s flexibility to respond to unplanned or evolving situations.

In addition, it would not be feasible to include all budget items in the Main Estimates, as many require further development and refinement before they can be approved by the Treasury Board and listed in the Main Estimates for parliamentary approval.

That said, the government is open to further suggestions on how to enhance the Estimates process and looks forward to recommendations that may come from the Senate Standing Committee on National Finance’s (NFFN’s) study, which is currently underway.

Background

In 2012 and in 2019, OGGO released reports on Estimates and supply processes.

In response, TBS made ongoing changes to products and processes, including:

• tagging items in Supplementary Estimates that stem from a federal budget
• development and ongoing expansion of GC InfoBase, an online searchable database
• expanding financial data in Departmental Plans and tabling them very soon after the Main Estimates
• providing a reconciliation of Estimates to the latest federal budget or fiscal update

On March 29, 2022, the Senate Standing Committee on National Finance (NFFN) passed a motion so that the committee will be authorized to conduct a study of the federal estimates process and other finance issues and to submit a final report no later than April 14, 2024. The committee began the study with an appearance by the Auditor General on October 4, 2022. The committee has also since heard from the PBO and officials from TBS.

TBS also conducted pilot projects on aligning Main Estimates with the federal budget and on purpose-based votes.

On aligning Main Estimates and the federal budget:

• In 2017, provisional changes to House of Commons Standing Orders allowed for Main Estimates to be tabled in the House of Commons by April 16.
• This two-year change allowed for the tabling of an Interim Estimates and a delayed tabling of Main Estimates. Budget implementation votes were then used to include planned spending from the latest federal budget in the Main Estimates.
• This mechanism allowed for complete alignment and reconciliation of the accrual-based budget with the cash-based Estimates. In response to feedback, the second year of this pilot saw separate votes for each budget measure, and these amounts were included in Departmental Plans.
• The use of budget implementation votes also reduced the delay for departments to obtain parliamentary authority for new spending by securing the appropriation before the Treasury Board approved departmental submissions. Monthly online reporting ensured transparency on timing of Treasury Board approvals and the release of funds.
• Departments appreciated the flexibility in the timelines for obtaining Treasury Board approvals and having fewer new approvals to risk-manage through the fiscal year. However, there were mixed reviews of the budget implementation votes.
• Many parliamentarians perceived a reduced opportunity to influence or exert control over government spending, which greatly outweighed any process efficiencies the government achieved. One of the concerns with the budget implementation votes was that Parliament was being asked to approve amounts before the Treasury Board.
• The provisions were not reintroduced in the 43rd Parliament, so the system reverted to the current standing orders and process.
• It is not possible to have any budget items approved by the Treasury Board before the budget is tabled. Budget announcements can require external consultation before detailed implementation plans can be drawn up and Treasury Board submissions prepared. In addition, the budget can respond to recent developments, for which there is insufficient advance notice to prepare a full Treasury Board submission. Lastly, there is the issue of budget secrecy, where decisions are closely held until the tabling of the budget.

On the Transport Canada purpose-based vote pilot:

• Transport Canada also undertook a pilot project on purpose-based grant and contribution votes beginning in 2016–17, whereby it had three separate votes for grants and contributions. The votes were based on the departmental Program Alignment Architecture.
• That pilot ended in 2020–21. Transport Canada has returned to a single vote for all of its grants and contributions programs.
• Transport Canada experienced some challenges in managing its transfer payment programs over the three separate votes. Flexibility to reallocate grant and contribution funding to departmental priorities was limited.
• The pilot has demonstrated that there were risks and costs to the expansion of the pilot to other votes and other departments.
• Additionally, according to Transport Canada, the pilot vote structure has not necessarily strengthened forecasting scrutiny nor ensured greater expenditure transparency.

On fixing a date for the federal budget:

• OGGO reports in 2012 and 2019 recommended tabling the budget and the Main Estimates concurrently. The PBO has also recommended this.
• In response to both OGGO reports, the government disagreed with the recommendation, as it would unnecessarily restrict the government’s flexibility in responding to global and domestic imperatives.
• In his April 13, 2023, report on Budget 2023, the PBO reiterated his request for the Main Estimates to be tabled following the federal budget to include related investments.

On setting or amending dates for the tabling of Public Accounts and Departmental Results Reports:

• Recent reports by the PBO have recommended requiring publication of the Public Accounts and the Departmental Results Reports no later than September 30 and tabling of the Departmental Plans at the same time as Main Estimates.
• The Standing Committee on Public Accounts recommended in their report on the Public Accounts of Canada 2021 that the tabling date be changed to October 15.
• Parliament does receive information on actual expenditures prior to tabling of Public Accounts and the Departmental Results Reports (DRRs). The Fiscal Monitor for March 31 is released on the last Friday in May and provides preliminary financial results that include the majority of actual spending for the fiscal year.
• The government will consider the House of Commons Standing Committee on Public Accounts (PACP) report and the steps required to ensure the Public Accounts can be tabled by October 15, which may be feasible (the Public Accounts 2023 were tabled in the House by the President on October 24, 2023). Consultations will be held with the Receiver General for Canada, the Office of the Auditor General, and the chief financial officer community to assess how timelines can be amended to facilitate this target tabling date. Consideration will be required in relation to election years, as the current requirement is that Parliament must be in session to table to the Public Accounts.
• Recent federal elections (2019 and 2021) took place in the fall and resulted in the later tabling of Public Accounts and DRRs. The 2018–19 DRRs would normally have been tabled in fall 2019 but were ultimately tabled on February 26, 2020. The 2020–21 DRRs would normally have been tabled in fall 2021 but were ultimately tabled on February 1, 2022. In these cases, the time needed for new ministers to review and approve the reports for their portfolios is compressed and have a consequence on the timing for tabling.
• The 2022–23 Departmental Results Reports were tabled on November 9, 2023, the same day as Supplementary Estimates (B), 2023–24.

On tabling of Departmental Plans and alignment with Main Estimates:

• Departmental Plans fully reflect the funding requirements presented in Main Estimates for those departments.
• The government continues to ensure that both the Departmental Plans and the Main Estimates are tabled in a timely manner to ensure parliamentarians have the information they need on the government’s plans for the upcoming fiscal year.
• The Departmental Plans 2024–25 were tabled on February 29, the same day as the Main Estimates 2024–25.

4a. Budget 2024: TBS-specific items

Issue

Budget 2024 announced new funding for:

• pay and human resources oversight activities
• official languages
• cyber security
• Access to Information and Privacy (ATIP) Online
• the Office of Public Service Accessibility

It also reiterated actions to strengthen procurement and conflict of interest regimes and funding for carbon removal procurement.

Response

As President of the Treasury Board, I am focused on ensuring that government is well managed and effective so that Canadians are well served.

To achieve these priorities, Budget 2024 announced new funding to:

• implement new provisions under the Official Languages Act
• strengthen the government’s cyber security capabilities
• improve the ATIP Online platform to increase transparency for Canadians
• make pay and human resources activities simpler and more efficient
• support accessibility within the public service

Budget 2024 also indicates renewed commitments to strengthen procurement and conflict of interest regimes, as well as provide additional flexibility in procurement to include carbon dioxide removal services to achieve our climate objectives.

Background

New funding

Budget 2024 identified new funding of $110 million over the next five years for TBS.

Funding will support important TBS programs, including:

1. An Enterprise Integrated Strategy on Human Resources and Pay: $22.7 million in 2024–25 for pay and human resources oversight activities, including human resources simplification and standardization
2. Official Languages: $9.9 million over four years, starting in 2025–26, to TBS to support meeting new legislative obligations under the Official Languages Act
3. Government of Canada Enterprise Cyber Security Strategy: $11.1 million over five years, starting in 2024–25, to strengthen the government’s cyber security technical capabilities
4. Strengthening Canada’s Access to Information (ATI) System: $18.2 million over five years, starting in 2024–25, and $2.6 million ongoing for continued operations and to support improvements of the ATIP Online platform
5. Accessible Government: Funding Renewal of the Office of Public Service Accessibility: $9.3 million over two years, starting in 2024–25, to renew the Office of Public Service Accessibility

TBS is currently developing programming and implementation plans for this new funding. TBS plans to access Budget 2024 funding through Estimates exercises.

Budget 2024 also proposes to amend the Red Tape Reduction Act to provide all ministers with authority to enable regulatory sandboxes, which would provide them with the authority to grant temporary exemptions to legislation or regulations to allow for testing of products, services, processes or new regulatory approaches.

Existing initiatives

Budget 2024 reiterates the commitment made by the Minister of Public Services and Procurement and the President of the Treasury Board of new actions to strengthen the government’s procurement and conflict of interest regimes. Previously disclosed in TBS’s 2024–25 Departmental Plan, the government has updated the value of the Low-carbon Fuel Procurement Program to $134.9 million over eight years, starting in 2024–25 to support the program in achieving climate objectives. Additional flexibility in procurement is provided to include carbon dioxide removal services.

4b. Budget 2024 items in Supplementary Estimates (A)

Issue

Supplementary Estimates (A) includes $1.6 billion in planned spending announced in Budget 2024.

Response

Supplementary Estimates include approximately $1.6 billion for Budget 2024 initiatives, including:

• $604.9 million for the Incentives for Zero-Emission Vehicles program
• $411.2 million for the Interim Federal Health Program
• $141.2 million for temporary accommodation and support services to asylum claimants
• $121.3 million for the Inuit Child First Initiative
• $100.5 million to advance Indigenous children and family services laws

Other funding announced in Budget 2024 will be presented in future Estimates.

Background

New spending presented in Budget 2024 will follow different paths to approval:

• voted appropriations presented in Estimates and approved through appropriation acts
• statutory expenditures approved through other legislation, such as Bill‑C-69, the proposed Budget Implementation Act, 2024, No. 1, which will later be shown in the Estimates for information purposes only
• tax changes approved through changes to legislation or regulation

Pace and scale of approval of budget measures

In the report on Supplementary Estimates (A), 2024–25, the PBO noted that roughly $1.6 billion of proposed budgetary authorities is related to 11 Budget 2024 measures. This is approximately 12.5% of $12.5 billion in anticipated new Budget 2024 spending for 2024–25.

The 11 budget measures cited by the PBO are based on items appearing in the end of chapter financial tables. In some cases, the Supplementary Estimates break down these amounts and presents information at a more detailed level. For example, the $239 million noted in the PBO report for “The Best Start for Every Indigenous Child” is presented in three separate, more detailed line items in Supplementary Estimates (A), 2024–25.

Budget 2024 measures in Supplementary Estimates (A), 2024–25

The largest dollar amounts connected to Budget 2024 measures presented in Supplementary Estimates (A), 2024–25 are:

• $604.9 million for the Incentives for Zero-Emission Vehicles Program, which will be used to continue to provide purchase incentives of up to $5,000 for eligible battery-electric plug-in hybrid electric and hydrogen fuel cell light-duty vehicles
• $411.2 million for the Interim Federal Health Program, which provides limited temporary health care coverage to specified groups of foreign nationals, including asylum claimants and refugees, who are not yet eligible for provincial or territorial health insurance
• $141.2 million to support provinces and municipalities offering transitional housing support to asylum claimants
• $121.3 million for the Inuit Child First Initiative to provide access to essential government funded health, social and educational products, services and supports
• $100.5 million to advance Indigenous children and family services laws

5. Public Service Health Care Plan: transition to Canada Life and plan design changes

Issue

On July 1, 2023, the administration of the PSHCP transitioned from Sun Life Financial to Canada Life Assurance Company (Canada Life). This has garnered attention from plan members, the media and politicians with respect to the vendor’s ability to provide services in a timely manner.

Furthermore, unrelated to the transition to Canada Life, the renewed PSHCP plan design also came into effect on July 1, 2023. Some of the changes to the plan have led to complaints from public servants.

Response

Since Canada Life implemented its customer service action plan in November 2023, there have been significant improvements to call centre wait times as well as the claim reimbursement turnaround time. While there were unacceptable early challenges, service standards for in-Canada services are now being met.

Canada Life worked with MSH International to introduce a similar action plan for members using the emergency travel and comprehensive coverage services abroad.

This action plan included investment in:

• additional staff to answer calls and process claims, prioritizing urgent cases by leveraging Canada Life’s established escalation process
• creation of online dashboards for both Canada Life and MSH International to show current contact centre and claim processing wait times
• an updated MSH International PSHCP member portal with a simplified registration page, a detailed claims information page and the ability for members to verify their explanation of benefits information

Like Canada Life, MSH International’s customer service action plan has begun to produce improvements to the member experience, but it may take more time for this to be felt by PSHCP members.

We will continue to work collaboratively with Canada Life to resolve any outstanding challenges PSHCP members may be experiencing.

Standing Committee on Government Operations and Estimates report

The Government of Canada thanks the Standing Committee on Government Operations and Estimates for their report on the Changeover of the Public Service Health Care Plan from Sun Life to Canada Life. We are assessing the implications of the recommendations and will respond to the committee in due course.

Changes in coverage

The change to the health care plan administrator is unrelated to the modernization of the PSHCP.

On July 1, 2023, a number of changes to the plan came into effect. These changes were negotiated collaboratively and in good faith between bargaining agents, retiree representatives and the employer.

The vast majority of changes provide enhancements to plan members at no additional cost to taxpayers.

However, some changes, such as the introduction of a generic drug requirement, a new maximum amount for physiotherapy and a prior authorization program, have created challenges.

These changes better align the government plan with industry standards and help ensure the long-term sustainability of the plan.

We continue to work with members and Canada Life to ensure that plan coverage is well understood.

Background

Per the Financial Administration Act, the Treasury Board has authority for all aspects of the public service benefit plans. The President of the Treasury Board, as employer of the public service, is responsible for the overall administration of the public service benefit plans.

PSPC is the contract authority, responsible for awarding the contract. Questions relating to the procurement process, including contract performance and remedies available to be pursued, should be directed to PSPC.

TBS is the project authority responsible for all matters concerning the technical content of the work. This includes assigning tasks to the contractor, receiving and reviewing reports, accepting the work, requiring corrections or replacements at the contractor’s expense, authorizing payments and the design of the plan.

Transition to Canada Life

On December 1, 2021, PSPC  awarded a $515-million contract to Canada Life to administer the Administrative Services Only contract of the PSHCP with a “go live” date for July 1, 2023. Prior to this, Sun Life Financial was the administrator of the PSHCP for 27 years.

The contract included an 18-month implementation phase whereby 18 subcommittees were established and responsible for over 3,000 deliverables. During this time, TBS met Canada Life several times weekly. Since before July 1, 2023, TBS, PSPC and Canada Life executives have been meeting daily. This includes pressing Canada Life for timely solutions to alleviate member enquiries and complaints and respond to media and members of Parliament.

PSPC and TBS also work jointly with Canada Life because PSPC is the contact authority and plays a central role with respect to contract adherence. TBS is the project authority, meaning it is responsible for all matters concerning the technical content of the work under the contract.

The following are examples of measures Canada Life took to alleviate pressures and complaints:

Canada Life

• Significantly increased the number of call centre and claims agents to reduce wait times
• Enhanced training for Canada Life agents to improve their technical knowledge on PSHCP benefits
• Continuously improved online reference materials to answer members’ frequently asked questions and improved their integrated voice recording messaging for more effective call routing
• Increased communications with pharmacies to ensure they use the correct information to successfully transmit claims on behalf of members
• Since July 1, 2023, Canada Life has processed over 26.4 million paper and digital claims submitted directly from members and service providers (pharmacies, massage therapists, physiotherapists and so on); these claims are being processed within the expected service standards, and the claims inventory is within acceptable limits

MSH International

Canada Life is working with its subcontractor, MSH International, who is responsible for providing out-of-country coverage for members living, working or travelling abroad to improve the member experience.

This includes a Customer Service Action Plan that seeks to:

• reduce contact centre wait times
• improve claims processing times and explanation of benefits
• ensure urgent cases are escalated appropriately
• ensure access for medical providers and new services available via their online portal

Public Service Health Care Plan design changes

Plan design changes to the PSHCP are negotiated between Government of Canada, the bargaining agent and retiree representatives at the PSHCP Partners Committee under the auspices of the National Joint Council, outside the core collective bargaining process. In September 2022, the Treasury Board approved the PSHCP design changes, which came into effect on July 1, 2023.

The modernized plan offers many enhanced and new benefits that are aligned with industry standards, which came at no additional cost to taxpayers and aligns with the Government of Canada’s current fiscal priorities. The PSHCP helps to support the government’s recruitment and retention requirements. The modernized plan also offers cutting-edge support to the 2SLGBTQI+ community and places the government as a market leader in this area, and as an employer of choice.

To better align the PSHCP with industry best practices, changes such as prior authorization and mandatory generic substitution of drugs were introduced. Savings achieved were reinvested into benefit enhancements, which include enhanced coverage for mental health, vision care, hearing aids and an industry-leading gender affirmation benefit. Since the announcement of the plan renewal, many of the benefit improvements have been well received.

As part of the changes for prior authorization and mandatory generic substitution, plan members may be required to provide additional information to establish reimbursement eligibility for certain drugs and services. This is different from how the PSHCP reimbursement used to be adjudicated prior to July 1, 2023. For example, documentation is now required to support the ongoing use of brand name drugs compared to their Health Canada approved generic equivalents. This is in line with industry best practices and helps to ensure value and cost-effectiveness of treatment for both plan members and the employer.

These changes require behavioural adjustments, and steps have been taken to allow plan members to gradually adjust to the new PSHCP changes and adjudication processes. For example, members who were on medication before July 1, 2023, that would be subject to prior authorization as of July 1, 2023, were permanently grandparented and would not be subject to prior authorization for that medication.

There have been concerns expressed by some members in relation to the introduction of mandatory generic substitution, pharmacy dispensing fee changes, and changes to physiotherapy coverage that have been brought to our attention:

1. Mandatory generic substitution

Mandatory generic substitution is an industry-standard plan feature and reimburses prescription drugs up to the lowest-priced alternative drug, or generic drug.

Generic medications are safe and effective alternatives to brand name drugs. Health Canada regulates generic drugs to ensure they are pharmaceutically equivalent to the brand name drug and contain identical medicinal ingredients. Generic medications are often less expensive than their brand name counterparts and yet are equally effective from a health outcome standpoint.

The PSHCP will implement mandatory generic drug substitution following a legacy period ending December 31, 2023.

As part of the negotiated agreement, plan members who were prescribed brand name drugs for ongoing treatments prior to July 1, 2023, could continue with the same brand name drugs (reimbursed at 80%) until December 31, 2023.

Pharmacies may dispense a brand name drug; however, it may not be covered at the same amount as a generic drug under the plan.

Plan members may want to request generic medication wherever possible to reduce their out-of-pocket drug costs.

If there is a medical reason why a plan member cannot take a generic drug, an attending physician or nurse practitioner can complete the Request for Brand Name Drug Coverage form, available on the Forms page of the Canada Life website.

2. Physiotherapy

Previously, the PSHCP covered up to $500, reimbursed at 80%, and PSHCP members were then required to pay $500 out of pocket. Once a plan member reached $1,000 in expenses incurred for physiotherapy, the PSHCP provided unlimited coverage, reimbursed at 80%.

Under the previous physiotherapy benefit, PSHCP members (particularly those with low income) faced a financial barrier for coverage at the $500 mark that could lead to a discontinuation of treatment.

A benchmarking study, based on large Canadian organizations with unionized employees and pensioner coverage, found that employer-sponsored plans typically do not offer an unlimited physiotherapy benefit.

The previous and the current PSHCP administrators (Sun Life and Canada Life) were also clear in advising of the need for the removal of unlimited coverage due to the high risk of fraud, abuse and misuse.

As part of the new physiotherapy benefit, the out-of-pocket member-paid corridor was removed, which helps many lower-income users of physiotherapy. The renewed physiotherapy benefit also removes a barrier to access by eliminating the prescription requirement, removing the plan member-paid corridor between $500 to $1,000, and setting an annual maximum of $1,500.

The annual maximum for physiotherapy, introduced on July 1, 2023, is twice the average eligible spending allowed by similar employer-sponsored health care plans.

To assist with the transition to the new physiotherapy benefit, a transition measure was implemented to allow PSHCP members to use the full annual maximum from July 1 to December 31, 2023, regardless of claims submitted for physiotherapy prior to July 1, 2023.

Many other benefit improvements were negotiated to support members with disabilities and chronic conditions. These changes include the removal of most prescription requirements for paramedical services, such as physiotherapy, massage therapy, acupuncture and osteopathy, as well as enhanced coverage for osteopathy, massage therapy, acupuncture, occupational therapy and viscosupplementation.

3. Pharmacy changes

As of July 1, 2023, PSHCP members and their eligible dependants are entitled to a maximum reimbursement of $8 for pharmacists’ dispensing fees. The reimbursement percentage for these fees is 80%.

This dispensing fee cap does not apply to biologic or compound drugs. Exceptions may also apply in certain provinces or territories due to regulations governing the practice of pharmacy.

Dispensing-fee caps are a common industry practice among employer-sponsored plans. They serve as a cost-sharing mechanism between the plan sponsor and the plan member. This measure has been negotiated to encourage plan members to make cost-effective choices for themselves and the plan. By exploring options for obtaining prescription medication, plan members can fully or partially offset the impact of the new dispensing fee cap.

Also as of July 1, 2023, the PSHCP is subject to a frequency limit on pharmacists’ dispensing fees for the same drug in a calendar year. The frequency limit applies to maintenance drugs only.

Members and their eligible dependants may submit up to five claims for dispensing fees per calendar year for maintenance drugs under the Public Service Health Care Plan.

To reduce the number of times dispensing fees are charged, and to remain within the annual cap, members may request that the pharmacy provide a 90-day supply of their maintenance medication. This practice can reduce costs for both the member and the plan. Exceptions are in place for situations where a member may not be able to receive a 90-day supply of maintenance medication (for example, safety, cold storage).

Standing Committee report recommendations

The Chair of the Standing Committee on Government Operations and Estimates tabled its report on the transition of the PSHCP from Sun Life to Canada Life on June 3.

Based on its deliberations, the committee made the following nine recommendations to the House of Commons and the government for future benefit plan transitions. It recommended that the Government of Canada:

1. Involve representatives of employees, retirees, people with disabilities and caregivers early when renewing the “Administrative Services Only” future contracts for the PSHCP to ensure that their administration, communication and coverage needs are understood and met.
2. Enhance communication with plan members when changes are made to coverage.
3. Maintain a robust monitoring system for the plan administrator on the first day when the contract comes into force and ensure that the transition period before activation includes monitoring milestones to ensure that the chosen contractor can provide a functional website and bilingual services, among other things. It should also ensure that future contracts with plan administrators do not provide a grace period to a contractor with no or few consequences for severe underperformance.
4. Provide the rationale behind the decision to transition to a new plan administrator and modernize benefits on the same date.
5. Ensure that employees are compensated for any financial loss caused by delays or claims denials.
6. Make service standards in its contract with Canada Life readily available to employees and regularly update stakeholders on Canada Life’s adherence to those standards as part of its commitment to transparency and accountability.
7. Revisit coverage limits for physiotherapy services, bring them in line with previous coverage, and distinguish between short- and long-term needs.
8. Develop separate processes for monitoring the timeliness and accuracy of:
   1. prior authorization decision-making and appeals
   2. claims made for drugs, treatments, and devices not requiring prior authorization to enforce the service-level standards contained in the contract properly
9. Finally, ensure that the selected company can always provide services in French and that they are provided within the same time frame as those in English.

Public Service Dental Care Plan contract

In June 2023, PSPC awarded a contract to Canada Life for the administration of the public service Pensioners’ Dental Services Plan and the Public Service Dental Care Plan. This contract was the result of a procurement process that began in 2019. Canada Life will become the administrator of the dental plans in winter 2024.

TBS, PSPC and Canada Life are working together to apply lessons learned from the implementation of the PSHCP contract to the transition of the dental care plans contract. Plan members will receive regular updates on the progress of the move to the new dental contract.

PSPC can speak to the procurement process and contract award.

6. Hybrid work in the public service

Issue

The common hybrid work model for the federal public service was fully implemented on April 1, 2023. Further to amendments to the Direction on Prescribed Presence in the Workplace, full-time employees will be required to attend work onsite for a minimum of three days per week beginning September 9, 2024. Additionally, a message from the Secretary and Chief Human Resources Officer to deputy heads included their expectation that executives attend work onsite for four days per week.

Response

To maximize the benefits of presence in the workplace, and to bring greater fairness and consistency to the application of hybrid work for our employees, the Direction on Prescribed Presence in the Workplacehas been updated.

By September 9, 2024, federal public servants in the core public administration who are eligible for a hybrid work arrangement will be required to work on site a minimum of three days per week.

To ensure leadership and effective support for their teams, executives are expected to be on site a minimum of four days per week, also beginning in September 2024.

This updated requirement also applies to groups of employees in organizations who had been permitted to temporarily continue working remotely based on specific work models (for example, call centre employees).

This decision was taken by the Secretary of the Treasury Board of Canada and the Chief Human Resources Officer following close consultations with and the endorsement of deputy ministers from across departments and agencies, including the Clerk and the deputy clerks of the Privy Council.

On exceptions

On January 12, 2023, the Government of Canada’s Chief Information Officer issued exemptions to the Direction on Prescribed Presence in the Workplace to specific positions in the IT workforce to support recruitment and retention efforts.

Following a review of the benefits of the exemption, a decision was made that IT exceptions would be withdrawn.

As the transition for IT employees and those in organizations who had been permitted to temporarily continue working remotely may require more time, organizations may choose to begin phasing in the common hybrid work model in September 2024, with full implementation expected by September 2025.

Background

The Prime Minister in his December 2021 mandate letter to the President of the Treasury Board requested that she “work with the Clerk of the Privy Council, and in consultation with public sector unions, to strengthen and modernize the Public Service for the twenty-first century by: Bringing forward a coherent and coordinated plan for the future of work within the Public Service, including developing flexible and equitable working arrangements.”

TBS is addressing this mandate letter commitment in part by reviewing the Directive on Telework.

The COVID‑19 crisis resulted in an abrupt shift to remote working arrangements for public servants in all jurisdictions. However, as the public service developed protocols, occupational health and safety guidance was updated in May 2022 to permit a return to full building occupancy. To facilitate a shift from primarily remote to hybrid, in June 2022, the Clerk of the Privy Council outlined her expectations for a hybrid workforce and encouraged departments to experiment with models. Following this, departments and agencies tested different options to learn how a hybrid work model can best support our core purpose: serving Canadians.

Following the Clerk’s message, the Chief Human Resources Officer began collecting information from organizations on their hybrid testing. In total, three questionnaires have been circulated: in fall 2022, spring 2023 and fall 2023. Results from each questionnaire were shared with the Public Service Management Advisory Committee and the National Joint Council, a governance body for employer-union engagement.

The information collected from the initial questionnaire showed that most public servants were operating under a wide variety of hybrid models and there was a need for consistency in how hybrid work is applied. In response, and further to engagement with deputy heads, the federal public service announced on December 15, 2022, the Direction on Prescribed Presence in the Workplace requiring all core public administration employees to work on site at least two to three days each week, or 40% to 60% of their regular schedule by March 31, 2023.

At that time, the direction included both exceptions and extensions to departments, granting them the ability to continue to deliver critical services, such as call centre functions, during the transition to the hybrid work model.

Further to analysis from the subsequent spring and fall 2023 questionnaires, additional revisions were announced to the direction on May 1, 2024, requiring a minimum three-day onsite presence beginning September 9, 2024, with executives expected to attend work onsite four days per week. In addition to those revisions, deputy-level committees such as the Board of Management and Renewal and the Public Service Management Advisory Committee determined that extensions for certain business models would be phased out by March 31, 2025.

In addition, the Chief Information Officer for Canada rescinded exceptions for limited and specific IT functions, requiring hybrid presence from previously exempted employees to begin by September 9, 2024.

As part of negotiations with bargaining agents since early 2023, the employer and some bargaining agents signed letters of agreement on telework that sit outside of collective agreements. Under the terms of the letters, joint departmental review panels were to be created within government organizations to address individual grievances where an employee is not satisfied with a decision made related to telework and hybrid work and chooses to refer the grievance to the joint departmental review panel. Each department is responsible for creating the panels and developing terms of reference with bargaining agents, with guidance provided by TBS.

Letters signed by the Public Service Alliance of Canada (PSAC), the Canadian Association of Professional Employees (CAPE) and Professional Institute of the Public Service of Canada (PIPSC) include the provision of a Joint Consultation Committee to support the review of the Directive on Telework. These committees have started their work and will endeavour to complete the consultation process within one year.

7. Collective bargaining

Issue

We are negotiating collective agreements across the public service that are fair to employees and reasonable for taxpayers.

Response

On June 10, 2024, the Government of Canada and PSAC reached a tentative agreement for the Border Services Group. Upon ratification by Border Services Group members and approval by the Treasury Board, the renewed collective agreement would apply to approximately 11,000 employees at the Canada Border Services Agency.

Should this tentative agreement be ratified by members, the government will have reached agreement with 18 bargaining units and covering more than 84% of the public service.

We are continuing with negotiations for the remaining active bargaining tables and are committed to reaching similar positive outcomes.

Background

Core public administration

Within the core public administration, all 28 bargaining units have served notice to bargain for the 2021–22 round of collective bargaining.

To date, collective agreements have been concluded (signed) or tentative agreements reached with 19 bargaining units, represented by 11 different bargaining agents and covering over 216,000 employees, or approximately 92% of the collective bargaining population in the core public administration.

The following collective agreements were concluded (signed or tentative) over the past year:

• Public Service Alliance of Canada (PSAC) for the Programs and Administrative Services (PA), Operational Services (SV), Technical Services (TC) ,Education and Library (EB) and Border Services (FB) groups;
• Canadian Association of Professional Employees (CAPE) for the Economics and Social Science Services (EC) and Translation (TR) groups;
• Local 2228 of the International Brotherhood of Electrical Workers (IBEW) for the Electronics (EL) group;
• Association of Canadian Financial Officers for the Comptrollership (CT) group;
• Professional Association of Foreign Service Officers (PAFSO) for the Foreign Service (FS) group;
• Canadian Union of Public Employees (CUPE) Local 104 for the Law Enforcement Support and Police Operations Support (LES-PO) group;
• UNIFOR Local 2182 for the Radio Operators (RO) group;
• Professional Institute of the Public Service of Canada for the Applied Science and Patent Examination (SP), Information Technology (IT), Research (RE) and Architecture, Engineering and Land Survey (NR) groups)
• Canadian Merchant Service Guild (Guild) for the Ships’ Officers (SO) group
• Association of Justice Counsel (AJC) for the Law Practitioner (LP) group
• National Police Federation (NPF) for the Royal Canadian Mounted Police (RCMP) Regular Members (below the rank of Inspector) and Reservists (RM) group (arbitral award)

Active negotiations

Negotiations are ongoing with the following groups:

Professional Institute of the Public Service of Canada

The Commerce and Purchasing (AV-CP) group (population approximately 6,500) declared an impasse on November 23, 2023. The hearing is scheduled on September 12, 2024.

The Health Services (SH) group (population approximately 3,600) continue negotiations.

Others

Negotiations continue with the Correctional Services (CX) group, represented by the Union of Canadian Correctional Officers (UCCO). The latest negotiation sessions occurred in February, March, May and June 2024.

The Canadian Military Colleges faculty Association representing the University Teaching (UT) group (population approximately 200) is expected to begin negotiations this summer.

The Air Traffic Control (AI) group represented by the Canadian Air Traffic Control Association (CATCA) has not yet reached an agreement. The parties have agreed to request joint mediation.

The Aircraft Operations (AO) group represented by the Canadian Federal Pilots Association has declared an impasse and filed for arbitration. The hearing is scheduled for September 4 and 5, 2024.

For the three Ship Repair groups:

• The Ship Repair (East) group, represented by the Federal Government Dockyard Trades and Labour Council (FGDTLC) (East) has declared an impasse and filed for arbitration.
• The Ship Repair (West) group, represented by the FGDTLC (Esquimalt, British Columbia), has declared an impasse and filed for arbitration.
• The Ship Repair (All Chargehand and Production Supervisor Employees Located on the East Coast (SR(C)) group, represented by the Federal Government Dockyard Chargehands Association has declared an impasse and filed for arbitration.

Separate agencies

With respect to separate agencies, all 30 bargaining units have served notice to bargain for the 2021–22 round of collective bargaining.

To date, collective agreements have been concluded (signed) or tentative agreements reached with 22 bargaining units, covering almost 61,960 represented employees, or approximately 91.6% of the collective bargaining population in separate agencies. These include:

Five bargaining units in two separate agencies are currently negotiating with the Professional Institute of the Public Service of Canada and the Research Council Employees’ Association. It is expected that negotiations will commence soon with two (2) other separate agencies represented by PSAC. All bargaining units, except one, have chosen arbitration as the dispute resolution process.

With respect to the Statistical Survey Operations represented by PSAC, while the bargaining agent has served notice to bargain, it is unlikely that the parties will engage in negotiations as all employees have transitioned to Statistics Canada in the core public administration.

8. Directive on Conflict of Interest

Issue

The parliamentary focus on ArriveCAN has led to interest in conflict of interest declarations made by public servants in relation to contractual relationships with the Government of Canada.

On May 20, TBS announced actions it was taking to strengthen contracting practices, including a review of the Directive on Conflict of Interest.

Response

In response to the motion adopted by the Standing Committee on Public Accounts on May 2, 2024, TBS provided data concerning the number of conflict of interest declarations within the core public administration related to contracting with the Government of Canada (79 in 2022–23 and 84 in 2023–24).

The completion of a conflict of interest declaration does not signify or suggest any wrongdoing. In fact, it demonstrates that employees have acted responsibly and in full compliance with rules and requirements.

Conflict of interest declarations are completed by employees for a range of situations where there may be a real, potential or apparent conflict. They are intended to capture any outside activities, assets and direct or contingent liabilities that might give rise to a conflict of interest with respect to an employee’s official duties. A public servant is required to obtain approval from their deputy head before entering into any contractual arrangement with the Government of Canada where they would receive any direct or indirect benefit or income.

Non-compliance may be subject to disciplinary measures, including termination of employment.

A review of the Directive on Conflict of Interest is underway to ensure requirements are clear, particularly as they relate to employees who engage in outside employment, and to assess what additional oversight may be required, such as strengthening the consequences of non-compliance.

Additionally, guidance provided to deputy heads who are responsible for enforcing and implementing is being reviewed to support the effective exercise of their authorities and responsibilities under this directive.

Background

The Directive on Conflict of Interest requires employees to seek the approval of their deputy head before entering into a contractual arrangement with the Government of Canada for which they receive any direct or indirect benefit or income. Deputy heads are responsible for ensuring that conflicts of interest in their organizations are identified and resolved appropriately and in favour of the public interest. As such, employees may, with the approval of their deputy head, contract or subcontract with the government.

The approval of their deputy head is based on whether the contract presents a real, potential or apparent conflict of interest and whether appropriate and effective mitigation measures can be implemented in agreement with the individual. Complying with the requirements of the directive and of the Values and Ethics Code for the Public Sector is a condition of employment. Employees who violate the directive or the values and ethics code are subject to disciplinary measures, up to and including termination.

Further to the March 20 announcement, Taking action against fraud and strengthening financial and procurement management, the Office of the Chief Human Resources Officer (OCHRO) is reviewing the Directive on Conflict of Interest “to ensure that the requirements are clear and effective, particularly as they relate to employees who engage in outside employment, including contracts with the Government of Canada.” Additionally, we are reviewing guidance provided to deputy heads who are responsible for enforcing and implementing the guide to support the effective exercise of their authorities and responsibilities under this directive.

The review of the directive has begun and is expected to be completed in the fall. The approach will rely on consultation with partners and stakeholders to identify gaps and potential areas for improvement, underpinned by research on current approaches in other jurisdictions.

9. Official languages in the public service and the modernized Official Languages Act

Issue

Bill‑C‑13 received royal assent on June 20, 2023. The modernized Official Languages Act introduces several changes that affect the Treasury Board, its President and its Secretariat.

Response

The Treasury Board has longstanding responsibilities under the Official Languages Act, including:

• communications with and services to the public
• language of work in federal institutions
• participation of English-speaking and French-speaking Canadians in the federal public service

The modernized act gives the Treasury Board more powers to monitor, audit and evaluate the compliance of federal institutions with their obligations. This is to ensure that, for example, Canadians receive services in the official language of their choice.

If pressed on implementation of the modernized Act:

• We are developing regulations for the implementation of Part VII of the Act. These regulations will support the vitality of official language minority communities, foster the full recognition and use of both English and French in Canadian society, and require departments to include language clauses in federal-provincial-territorial agreements.
• This work is proceeding on a priority basis, and we will ensure that important consultations take place with stakeholders, including minority linguistic communities.
• We also launched an official languages accountability and reporting framework that sets out roles and responsibilities for federal institutions under the Official Languages Act.
• Lastly, TBS has developed a second official language training framework, including tools and resources, to improve the support offered to federal public servants in learning their second official language. This is an important step towards strengthening bilingualism in the public service.

Background

The Official Languages Act is a quasi-constitutional act that aims to:

• ensure respect for English and French, equality of status for both languages, and equal rights and privileges as to their use in federal institutions
• support the development of English and French linguistic minority communities
• advance the equality of status and use of English and French in Canadian society

Treasury Board official languages responsibilities

Under the Official Languages Act, the Treasury Board has been responsible for the general direction and coordination of Government of Canada policies and programs related to the implementation of the following parts of the Act:

• 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 federal institutions (Part VI)

TBS is responsible for reporting to Parliament on the execution of official languages programs in federal institutions. The last report tabled in Parliament was on October 5, 2023.

Changes to the Official Languages Act

Since royal assent, the modernized Official Languages Act gives the President of the Treasury Board, rather than the Minister of Canadian Heritage, the following additional responsibilities:

1. To undertake a leadership role in the implementation of the Official Languages Act
2. To coordinate the implementation of the act in consultation with other federal ministers and ensure the proper governance of the Act
3. To coordinate the implementation of the commitments set out in subsections 41(1) to (3) with respect to the enhancement of the vitality of the English and French linguistic minority communities, the protection and promotion of the French language, and the provision of learning opportunities in the language of the official language minority

The Treasury Board’s authorities have also been extended to apply to the obligation of federal institutions to take positive measures to achieve substantive equality between English and French, and to consider the inclusion of language clauses in certain agreements negotiated with the provinces and territories.

The Minister of Canadian Heritage retains the role of developing a government-wide official languages strategy, in consultation with the President of the Treasury Board. It also retains its existing responsibilities for collaboration with provincial and territorial governments and non-governmental organizations. These responsibilities have been assigned to the Minister of Employment, Workforce Development and Official Languages, who is supported by the Department of Canadian Heritage.

Strengthened and broadened powers of the Treasury Board

The Treasury Board’s existing authorities with respect to language of service and communication with the public (Part IV), language of work (Part V) and equitable participation of English and French speakers in the federal public service (Part VI) are strengthened, as most provisions have been changed from discretionary to mandatory. The Treasury Board is now required rather than having discretion to establish policies, monitor the compliance of federal institutions, and evaluate and audit the official languages policies and programs of federal institutions. It is also required to inform employees of federal institutions of the established principles of application.

Authorities are also broadened and now apply to the obligation of federal institutions to take positive measures, and to consider the inclusion of language clauses in certain agreements negotiated with the provinces and territories. Positive measures can take many forms, such as financial support for a community development project, a secondment to a non-governmental organization to share knowledge or expertise, or incentivizing private sector organizations of national importance to reflect and promote Canada’s bilingual character at home and abroad.

Part VII of the Official Languages Act

Federal institutions are committed to taking positive measures to:

• enhance the vitality and support the development of official language minority communities
• protect the French language
• foster the full recognition and use of English and French in Canadian society

Various stakeholders, including the Commissioner of Official Languages, also expect the government to make regulations that would set out requirements for taking positive measures. The modernized act assigns the Treasury Board the following responsibilities in relation to Part VII of the Act:

• Part VII regulations: In consultation with the Minister of Canadian Heritage, the Treasury Board shall establish policies, recommend policies to the Governor in Council or issue directives to give effect to taking positive measures and the inclusion of language clauses while negotiating federal-provincial/territorial agreements. The Treasury Board will now begin the process of developing such regulations.
• Monitoring and compliance auditing of federal institutions: The Treasury Board is now required to fully exercise its monitoring functions with respect to federal institutions’ compliance with the obligation to take positive measures and to consider the inclusion of language clauses in federal-provincial/territorial agreements.

Legislative changes affecting official languages in the public service

1. Supervision in regions designated as bilingual for language of work purposes

   The modernized act gives all employees in regions designated as bilingual for language of work purposes the right to be supervised in the official language of their choice, regardless of the language designation of their position. The rights of current incumbents of affected supervisory positions are protected and the coming into force of this provision will take place two years after C‑13 received royal assent, that is, on June 20, 2025.

2. The bilingualism of deputy ministers, associated deputy ministers, and equivalent positions

   The act now makes it mandatory for deputy ministers and associate deputy ministers in federal departments (namely those identified in Schedule 1 of the Financial Administration Act) to take language training, if required, to be able to speak and understand both official languages. The language skills of these senior officials are the responsibility of the Privy Council Office.

Administrative changes affecting official languages in the public service

During the process for modernizing the Official Languages Act, the government released a document in February 2021 on its intentions entitled English and French: Towards Substantive Equality of Official Languages in Canada. This document sets out a series of proposed legislative, regulatory and administrative commitments to achieve a new linguistic balance.

Among the administrative measures is the proposal to develop a new Language Training Framework for the federal public service, focused on inclusive second-language training that meets the diverse needs of learners, and the proposal to review the minimum second-language requirements for bilingual supervisors.

10. Public Servants Disclosure Protection Actreview

Issue

In December 2021, the President’s mandate letter included a commitment to continue to take action to improve the government’s whistleblower protections and supports. On June 16, 2022, Private Member’s Bill‑C‑290, An Act to amend the Public Servants Disclosure Protection Act, was introduced. The bill passed third reading on January 31, 2024, and was referred to the Senate.

On November 29, 2022, the President announced the task force to review the Public Servants Disclosure Protection Act. As part of the review, the task force is consulting with internal and external stakeholders, including reviewing the views expressed during parliamentary consideration of Bill‑C‑290 and previous recommendations to be considered in their report to government.

Response

The government is dedicated to promoting a positive, respectful and safe public sector culture that is grounded in values and ethics, where public servants feel safe to disclose wrongdoing.

In November 2022, a task force was appointed to explore revisions to the Public Servants Disclosure Protection Act, consider opportunities to enhance the federal disclosure process, and strengthen protections and supports for public servants who come forward to disclose wrongdoing.

The task force is composed of individuals who bring significant experience and diverse expertise in the field.

The review began in January 2023, and I look forward to receiving the task force’s report by the end of 2024, with their recommendations for improvements to the Act.

On Bill C‑290:

• Bill‑C‑290 introduces a number of amendments, such as:
  • expanding protection to cover more public servants involved in the disclosure of wrongdoings
  • extending the time period for making a complaint of reprisal from 60 days to one year
  • allowing reprisal complaints about the Public Sector Integrity Commissioner to be made to the Auditor General
  • ensuring that those making reprisal complaints are provided with reasons when they are refused
  • a recurring five-year review of the Act
• While the government fully supports these amendments, there are concerns with other amendments as they could have adverse legal and operational consequences in the form of overlap and duplication with other recourse mechanisms, creation of backlogs, lengthier processes and higher cost.
• The amendments of concern include:
  • the provisions that remove qualifying terms from various sections of the act that set the threshold for the degree of severity of issues to be considered as wrongdoing
  • allowing an individual to take a complaint of reprisal directly to the Public Servants Disclosure Protection Tribunal without a prior investigation by the Public Sector Integrity Commissioner, which could lead to a surge in cases that could overwhelm the capacity of the Tribunal, leading to delays and additional costs for all involved

Background

In June 2017, the Standing Committee on Government Operations and Estimates (OGGO) tabled its report on their independent review of the Public Servants Disclosure Protection Act. The report contained 15 recommendations covering issues such as the definition of terms, training, protection of whistleblowers, research and assessments.

In October 2017, the government committed to implement improvements to the administration and operation of the internal disclosure process and to protection from acts of reprisal but not legislative amendments.

On February 17, 2021, OGGO adopted a motion to readopt the 2017 report and request a government response. Since Parliament was dissolved prior to a government response being tabled, there was no longer a requirement for a response.

In December 2021, the President’s mandate letter included a commitment to continue to take action to improve the government’s whistleblower protections and supports. This includes exploring possible amendments to the Public Servants Disclosure Protection Act.

Your predecessor announced the establishment of the Public Servants Disclosure Protection Act Review Task Force in November 2022. It is composed of people who bring significant experience and diverse expertise within the field, including academics, individuals with expertise in other Canadian jurisdictions, those with experience as Senior Officers for Internal Disclosure, and bargaining agent representatives. The Task Force began its work in January 2023, with the review expected to conclude with a report and recommendations by the end of 2024.

Budget 2022 provided $2.4 million over five years to launch a review of the Public Servants Disclosure Protection Act.

This review will build on the work that OGGO undertook five years ago and the recommendations from the 2017 report with research on the latest developments in whistleblowing in other jurisdictions, current input from stakeholders, including a survey accessible to the public sector and members of the general public, as well as on views expressed during parliamentary consideration of Bill‑C‑290, An Act to amend the Public Servants Disclosure Protection Act, introduced by Bloc Québécois MP Jean-Denis Garon.

In June 2022, Private Member’s Bill C‑290, An Act to Amend the Public Servants Disclosure Protection Act, was introduced in Parliament, to expand the application of the act to additional categories of individuals, allowing that a protected disclosure be made to any officer within the portion of the public sector in which the public servant is employed, the extension of the period during which a reprisal complaint may be filed and to add a duty to provide support to public servants. Bill‑C‑290 passed second reading in the House of Commons, was referred to OGGO for clause-by-clause consideration and was reported back to the House with 30 amendments on September 18. The Bill passed third reading on January 31, 2024, and was referred to the Senate, where it was read for the first time on February 6, 2024.

On October 30, 2023, the Annual Report on the Public Servants Disclosure Protection Act for 2022–23 was tabled showing that 152 public servants made 246 internal disclosures concerning 356 allegations of wrongdoing. This compares to 194 public servants who made 178 internal disclosures concerning 381 allegations of wrongdoing in 2021–22.

11. Support for Black Public servants

Issue

The government is continuing to take steps to address issues related to harassment and systemic discrimination in its institutions.

Response

The Government of Canada is working to create a diverse and inclusive public service, free from racism, harassment and discrimination.

To advance the work on our Action Plan for Black Public Servants, the government provided close to $50 million through Budgets 2022 and 2023.

On February 21, 2024, I announced three initiatives that are part of the Action Plan for Black Public Servants:

• Black-centric enhancements to Health Canada’s Employee Assistance Program
• a new executive leadership program for Black executives through the Canada School of Public Service
• individualized assessment, counselling and coaching services to Black public servants through the Public Service Commission of Canada

Budget 2023 provided $6.9 million over two years, starting in 2023–24, to TBS to advance a restorative engagement program. This program will empower employees who have suffered harassment and discrimination, and drive culture change in the public service. Options for the design of a restorative engagement program are currently in development.

If pressed (Thompson class actions):

• We know there is more to be done to identify, address and prevent harassment, discrimination and violence in the workplace, but we believe that the courts are not the correct forum for addressing matters which can or could have been grieved under the Federal Public Sector Labour Relations Act. There are existing processes to deal with complaints or grievances related to harassment and discrimination in the public service.

Background

The Action Plan for Black Public Servants was announced in February 2024. The Action Plan will advance solutions to improve the mental health and career outcomes of Black public servants through two pillars:

1. a mental health fund with $24.9 million over four years to address the impacts of anti-Black racism and improve mental health outcomes for Black public servants and their families
2. career and leadership development programs with $19.4 million over four years to provide training, mentorship and career opportunities to ensure Black public servants have the skills and opportunities to advance in their careers

Located in OCHRO’s People and Culture Sector, the Task Force for Black Public Servants will engage and coordinate partners and stakeholders to establish and deliver the mental health and career development and leadership initiatives. As of June 2024, the Task Force has achieved the following important implementation milestones:

• coordinated Employee Assistance Program enhancements with Health Canada delivery partners
• completed consultations with Black executives on an executive leadership program for Black leaders
• launched the first intake for executive leadership development for Black leaders

The Task Force for Black Public Servants will ensure products and services have the greatest impact for Black public servants by grounding proposals in an evidence-based approach. Quantitative and qualitative data will be leveraged throughout the design process as programs are designed to address systemic barriers in areas such as second official language training and leadership development for aspiring leaders.

A panel of experts on the Restorative Engagement Program provided recommendations to the government on the design and creation of this new program this past winter that will inform decisions on next steps.

The broadest, largest and most high-profile of class action cases is Thompson et al v. HMK. This proposed class action seeks damages on behalf of current and former Black public servants and any Black individuals who have applied for jobs in the federal public service dating back to 1970 but were not successful due to their race.

The plaintiff group in the proposed Thompson class action sent a letter to the United Nations’ Office of the High Commissioner for Human Rights setting out various allegations with respect to ongoing systemic anti-Black harassment and discrimination in the federal public service. Canada has not been advised of any advancements in this area.

Additionally, Amnesty International Canada filed a motion to intervene in the Thompson case in July 2023. In December, Canada responded that this motion should be denied as interventions at the certification stage are exceptional and the proceedings are not the type of exceptional proceedings where international law can provide any valuable guidance. On February 8, 2024, the Federal Court granted Amnesty International Canada leave to intervene, on a limited basis, in relation to the certification motion and the motion to strike in the Thompson matter.

The hearing date for the certification motion and the motions to strike and stay has now been set for October 28, 2024, for a duration of eight days in Toronto.

12. Phoenix-related issues

Issue

Status of the Phoenix damages agreements reached with unions in 2019 and 2020 and the new human resources and pay system

Response

The Government of Canada and a number of public service unions have reached agreements to compensate current and former employees who were affected by the implementation of the Phoenix pay system in 2016.

The agreements cover general damages from April 1, 2016, to March 31, 2020.

All employees covered by the damages agreements have now received their general damages compensation. In addition, a claims process is in place to allow eligible current and former employees to file claims for severe damages.

The Government of Canada remains committed to resolving outstanding pay issues for public servants, while modernizing processes and systems to improve the overall human resources and pay experience for employees.

In support of this work, we will continue working with all partners, including bargaining agents, to simplify human resources and pay processes.

If pressed on the need for future Phoenix damages compensation:

• We are aware that bargaining agents have requested additional compensation for Phoenix damages.
• We are committed to a continued dialogue with bargaining agents on this issue.

Background

To date, approximately $711 million has been paid in damages relating to the Phoenix pay system, including some $26 million in 2023.

$16.5 million from the 2024–25 Main Estimates is allocated to reimburse departments that pay claims for Phoenix damages. This is an estimate, and actual amounts may be less.

Phoenix damages entitlements for employees (current and former) are provided by the following damage agreements with the bargaining agents:

2019 damages agreement (all bargaining agents except the Public Service Alliance of Canada)

In May 2019, the Government of Canada reached a tentative agreement with members of the Senior Level Phoenix Union-Management subcommittee on damages to compensate employees impacted by the implementation of the Phoenix Pay system. The agreement was ratified in June 2019 by all federal government bargaining agents except for PSAC, who stated the compensation was insufficient. Many separate agencies signed similar agreements covering their employees (except those represented by PSAC).

The agreement applies to up to 118,000 current and 21,000 former employees. The agreement includes:

• up to five days of additional annual leave for current employees or an equivalent lump-sum payment for former employees and estates of deceased employees
• a claims process for expenses and financial losses
• additional damages for severe impacts cases

The claims process for financial costs or lost investment income was launched in February 2020. The claims process for severe personal or financial hardship was launched in January 2021.

2020 Public Service Alliance of Canada damages agreement

PSAC signed their Phoenix damages agreement in October 2020. The PSAC agreement is similar to the 2019 agreement except employees received general damages as a cash payment up to $2,500 instead of leave credits, and up to $1,000 of the general damages payment was for the late implementation of the 2014 collective agreements, while up to $1,500 was for stress and aggravation.

Current employees covered by the 2020 Agreement received their general damages in March and September 2021. The claims processes for former and current employees were launched in November and December 2021.

Aligned with the guidance of the Canada Revenue Agency (the Agency), income tax was deducted from the lump-sum general damages payments. In March 2023, the Agency and PSAC filed a joint reference on the issue of taxability of the payments to the Tax Court of Canada. The Agency has advised TBS that an agreement was signed with a member of PSAC to settle the matter. As part of the terms of settlement, the parties agreed that the portion of the lump-sum payment for stress, aggravation, pain and suffering (up to $1,500) is non-taxable. The lump-sum payment up to $1,000 remains taxable. To benefit from the settlement, PSAC members must file an objection with the Agency. The Agency has also advised that for former employees covered by the 2020 Agreement who file a claim, the tax treatment arising from the settlement applies.

2021 agreement of the catch-up clause related to the 2019 memorandum of understanding

The signing of the PSAC damages agreement triggered the negotiation of a catch-up agreement (ratified on March 3, 2021) to align the compensation between the agreements.

Current and former employees covered under the 2019 damages agreement may be eligible for other monetary benefits that are part of the PSAC damages agreement, such as general damages compensation of up to $1,000 for the late implementation of the 2014 collective agreements.

Catch-up payments were provided to eligible current employees in September 2021. The claims process for catch-up payments to former employees was launched in December 2021. Current employees represented by PSAC who received leave under the 2019 agreement have also received their outstanding catch-up payments.

Bargaining agents’ request for further Phoenix damages

Several bargaining agents have requested that the Treasury Board provide employees additional Phoenix damages. In February 2024, the bargaining agents requested that TBS begin formal negotiations on the matter.

To date, representatives from the TBS and PSPC have participated in three meetings with the bargaining agents.

13. NextGen HR and pay

Issue

Since the launch of the Phoenix pay system in 2016, ongoing efforts have been deployed to help stabilize pay and reduce the backlog of pay files. These efforts have been jointly led by TBS’s Office of the Chief Human Resources Officer (TBS-OCHRO) as the policy and business owner for human resources and total compensation and PSPC as the pay administrator.

In addition to stabilization efforts, other measures were implemented to address employee hardships, including the negotiation of agreements with bargaining agents to compensate current and former employees who have suffered financial and non-financial damages caused by Phoenix-related pay issues.

Response

The Office of the Chief Human Resources Officer at TBS is responsible for providing direction and functional leadership on human resources (HR) people management infrastructure to core public administration organizations.

TBS is working with bargaining agents to simplify complex pay rules so that more pay transactions can be automated and to reduce the number of HR systems in the core public administration.

We continue to work with bargaining agents on streamlining and simplifying collective agreement provisions that impact HR and pay administration.

Background

In 2018, the Government of Canada committed to replacing the Phoenix pay system with a next-generation integrated HR and pay solution. TBS’s Office of the Chief Information Officer (OCIO), as the lead for information and technology standards for the Government of Canada, led an agile procurement process. Upon completion of the process, which qualified three vendors – SAP, Workday and Ceridian (now Dayforce) – Shared Services Canada, in partnership with TBS-OCHRO, began testing a “software as a service” (SaaS) solution to replace Phoenix and the more than 30 management systems that feed into it.

Experimentation began with SAP in 2020, but Shared Services Canada transitioned to working with Dayforce in the fall of 2021. Initial testing of the Ceridian’s Dayforce solution concluded in May 2023. A final findings report was completed by Shared Services Canada in August 2023 and concluded that Dayforce was a viable option. It is important to note, however, that not all capabilities were tested, and further testing was deemed required to ensure the platform’s feasibility and support a confident recommendation to Parliament. Upon delivery of the final findings report, feasibility of the platform transitioned to PSPC, where it is led out of the newly established Enterprise Pay Coordination Office.

While the Enterprise Pay Coordination Office, as the project sponsor, continues to test the Dayforce solution, TBS-OCHRO is pursuing the simplification of complex pay rules that complicate software configuration and, in some cases, warrant costly software enhancements built specifically for the Government of Canada.

TBS-OCHRO is working with bargaining agents toward streamlining and simplifying collective agreement provisions that impact HR and pay administration, developing a new operating model for HR and pay, and preparing organizations to accept the transformation (that is, promoting business readiness and facilitating change management).

In parallel, TBS-OCHRO is also leading standardization efforts to reduce the number of custom HR systems in the existing landscape, guiding the public service toward a more standardized HR ecosystem that can promote better pay outcomes in the present but also facilitate a far smoother transition to Dayforce in the future.

14. President of the Treasury Board priorities

Issue

What are the priorities and mandate commitments for the President of the Treasury Board and how are they being advanced?

Response

As President of the Treasury Board, I am focused on ensuring that government is well managed and effective so that Canadians are well served.

Part of this involves:

• overseeing the prudent use of public funds
• taking action to strengthen and uphold the highest standards of procurement
• maintaining effective cyber security protections
• supporting openness and transparency across government

I am also committed to addressing workplace harassment, discrimination and violence within the public service, with initiatives such as the Action Plan to support Black public servants.

Background

The Prime Minister’s letter of December 16, 2021, addressed to the previous President of the Treasury Board, contains over 30 commitments for which the President is responsible in whole or in part, spanning areas such as:

• equity, diversity, accessibility and inclusion in the federal public service
• digital government
• greening government
• government procurement
• strengthening and modernizing the public service for the 21st century
• regulatory modernization

The commitments include leading whole-of-government initiatives aimed at delivering improved services and results for Canadians, including:

• “Continuing leadership to update and replace outdated IT systems and modernize the way government delivers benefits and services to Canadians.”
• “Bringing forward a coherent and coordinated plan for the future of work within the public service, including developing flexible and equitable working arrangements.”
• “Continuing to lead our regulatory reform efforts in collaboration with your Cabinet colleagues to improve transparency, reduce administrative burden and lead our efforts to harmonize regulations that maintain high safety standards and improve the competitiveness of Canadian businesses.”
• “Ensure government policy continues to be developed through an intersectional lens, is reflective of the needs and aspirations of Canadians and supports our path to net zero through:
  • “Continuing to refine and strengthen the quality-of-life framework to ensure that we achieve long-term outcomes that benefit people, and that progress towards those aims is rigorously reported;
  • “Working with the Minister of Environment and Climate Change on the application of a climate lens to ensure climate adaptation and mitigation considerations are integrated throughout federal government decision-making; and
  • “Supporting the Minister for Women and Gender Equality and Youth in the evaluation process of GBA Plus with the goal of enhancing the framing and parameters of this analytical tool and with particular attention to the intersectional analysis of race, indigeneity, rurality, disability and sexual identity, among other characteristics.”

Budget 2024 included support to advance commitments in key areas of Treasury Board responsibility, such as:

• $135 million in 2024–25 for PSPC and TBS to improve public service human resources and pay systems, including continuing work on a potential next generation pay solution
• $84 million over five years for TBS and Library and Archives Canada to maintain the access to information (ATI) and privacy regime
• $26 million over five years, starting in 2024–25, to the Department of Canadian Heritage, TBS and the Office of the Commissioner of Official Languages to support the implementation of An Act for the Substantive Equality of Canada’s Official Languages
• $17 million over five years, less $1 million sourced from existing resources, for TBS and the Public Service Commission of Canada to support the Office of Public Service Accessibility, the Federal Internship Program for Canadians with Disabilities, and improve recruitment and assessment processes for persons with disabilities
• $11.1 million over five years to TBS to implement a whole-of-government cyber security strategy

Budget 2024 also announced other priorities, including:

• a proposal to amend the Red Tape Reduction Act to provide ministers with authority to enable regulatory sandboxes, which would include authority to grant temporary exemptions to legislation or regulations to allow for testing of products, services, processes or new regulatory approaches
• language committing the government to “addressing internal trade barriers, including through regulatory harmonization, in collaboration with provinces and territories, to cut the red tape holding back trade between provinces and territories, to ensure Canada can reach its full economic potential”
• as previously disclosed in TBS’s 2024–25 Departmental Plan, the government has updated the value of the Low-carbon Fuel Procurement Program to $134.9 million over eight years, starting in 2024–25

Other policy actions in 2023–24 related to the President of the Treasury Board’s mandate commitments included:

• Effective April 1, 2023, the Standard on the Disclosure of Greenhouse Gas Emissions and the Setting of Reduction Targets outlines that federal procurements over $25 million should incent suppliers to disclose their greenhouse gas emissions and set reduction targets.
• Effective April 1, 2023, the Directive on the Management of Procurement was amended to reinforce expectations that federal procurement activities are conducted with ethically, socially and environmentally responsible companies and require that all suppliers and their subcontractors adhere to the Code of Conduct for Procurement. In addition, departments will be required to implement measures for identifying, mitigating and disclosing risks of human trafficking, forced or child labour, and other unethical business practices in their supply chains and including these considerations in their procurements.
• In July 2023, the government released its review and update of the Government of Canada’s Digital Ambition, which provides a clear, long-term strategic vision for the Government of Canada to advance digital service delivery, cyber security, talent recruitment and privacy.
• Effective July 11, 2023, the Directive on the Management of Materiel was amended to include new and modified requirements in support of the federal Greening Government Strategy and the commitment to electrify the entire federal fleet of light-duty vehicles by 2030.
• In September 2023, the government announced the second cohort of the Mosaic Leadership Development program. This program, which was co-developed with diverse employee networks, is aimed at developing equity-seeking public servants for senior leadership roles.
• In October 2023, the government published guidance about the use of contracted professional services, including management consulting. The Manager’s Guide: Key Considerations When Procuring Professional Services helps managers determine when to contract for professional services versus when to use internal resources.
  • The guide also lays out practical considerations for managers when structuring contracts so that they deliver best possible value, can be effectively managed, and fully align with requirements of the Directive on the Management of Procurement.
• In October 2023, the government announced a panel of experts who will make recommendations on the structure and design of a new Restorative Engagement Program for public servants. The goal of the program is to address past harms and promote healing for employees who have reported experiencing harassment, discrimination and violence in the workplace.
  • In January 2024, the panel submitted its report, Restorative Engagement Program: Recommendations on How to Achieve a Successful Program.
  • The Government of Canada is now assessing these recommendations and will conduct further meaningful consultation with key partners and communities of practice to ensure the program design meets the needs of public servants.
• In February 2024, the government announced the first initiatives of the Action Plan for Black Public Servants, including:
  • funding for Black-centric enhancements to the Employee Assistance Program provided to more than 90 federal departments and agencies
  • funding for an executive leadership program for Black executives in groups EX‑01, EX‑02 and EX‑03 to support their career advancement
  • funding to provide individualized assessment, counselling and coaching services to Black public servants
• On March 20, 2024, TBS announced a series of actions to enhance its oversight of departmental practices and processes and support effective management across government, including:
  • a new risk and compliance process that will assess government-wide trends, risks and individual departmental performance in key management areas and take immediate corrective actions where necessary; using this process, TBS will more actively oversee government-wide management practices and outcomes
  • a horizontal audit that the Comptroller General will undertake beginning in April 2024 across a number of large departments to assess governance, decision-making and controls associated with professional services contracts, including IT; audit results, expected by December 2024, will inform any additional measures that are necessary
  • an update to the Manager’s Guide: Key Considerations When Procuring Professional Services; these updates include additional guidance to help managers in making decisions that demonstrate a prudent use of tax dollars
  • measures to strengthen the accountability of managers when procuring professional services by embedding certain elements of the guidewithin mandatory procedures that fall under the Directive on the Management of Procurement
  • publishing additional information about contracts on the Open Data Portal and ensure that it is presented clearly, accurately and in a more user-friendly way
  • the Chief Human Resources Officer will review the Directive on Conflict of Interest to ensure that the requirements are clear and effective, particularly as they relate to employees who engage in outside employment, including contracts with the Government of Canada

To date, actions taken in 2024–25 related to the President of the Treasury Board’s mandate commitments and priorities include:

• On May 22, 2024, the Government of Canada’s first Enterprise Cyber Security Strategy was released. The strategy outlines a proactive, whole-of-government approach to ensure that the government can quickly and effectively combat cyber threats and address vulnerabilities across the government’s digital estate. The strategy aims to help safeguard government systems, protect Canadians’ information, and strengthen the resilience of digital government to ensure the continued delivery of secure and reliable digital services.
• On May 29, 2024, the Government of Canada Trust and Transparency Strategy was published. Two key pillars will support the achievement of the objectives of the Trust and Transparency Strategy, the ATI Modernization Action Plan and the National Action Plan on Open Government.
  • As part of ATI modernization, the Policy Guidance on the Disclosure of Historical Records, published the same day, is intended to enable a more efficient and consistent approach to the review and potential disclosure of historical records. This includes reducing processing delays and associated operational costs, as well as minimizing the need for lengthy consultations on whether a record could be released. The new guidance identifies recommended non-statutory time thresholds to help federal institutions apply discretionary exemptions under the Access to Information Act (ATIA).
  • The National Action Plan on Open Government sets out commitments to make the Government of Canada more transparent, accountable and participatory. To ensure federal government institutions remain responsive to the needs of Canadians, the public, civil society, academia and the private sector are provided with the opportunity to co-create and influence government policy and decision-making. The Government of Canada has launched engagement opportunities to develop the 2025–2029 National Action Plan on Open Government.
• On May 29, 2024, the government announced new mandatory procedures for procurement as part of the Directive on the Management of Procurement. The procedures provide an additional check and balance for public service managers to ensure that they are clear about their responsibilities and accountabilities when undertaking professional services procurement activities related to oversight, conflict of interest and integrity provisions in the directive.
  • The measures include validating that alternative approaches have been considered before deciding to contract for professional services. As well, in addition to ensuring statements of work are detailed and complete, managers must provide a signed confirmation acknowledging their responsibilities in managing the contract confirming they do not have a conflict of interest, that they have not directed which resources should be working under the contract, and that the contractor did not assist in or have unfair access to the solicitation process.

15. Refocusing government spending (government-wide and TBS-specific)

Issue

Budget 2023 delivers a refocusing of government spending to continue to serve Canadians most effectively.

Response

The refocusing government spending initiative is not about cutting services or programs that Canadians rely on. It is about applying a careful, systematic process to ensure that public funds are focused on key priorities, like health care, housing and building Canada’s clean economy.

The objective of the exercise is to find areas of duplication, lower value for money, or ways to better align spending with the government’s priorities.

Supplementary Estimates (B), tabled last fall, began reporting on the first block of these savings with reductions of $500 million across professional services and travel for 2023–24.

$10.5 billion in planned reductions for 2024–25, 2025–26 and 2026–27 were presented in the 2024–25 Main Estimates.

Budget 2024 announced the implementation of Phase 2 of the refocusing government spending initiative, with the government seeking to achieve savings primarily through natural attrition in the public service.

Together, the two phases will deliver on the government’s commitment to refocus $15.8 billion over five years and $4.8 billion ongoing.

TBS reallocations

As part of the refocusing government spending exercise, $9.6 million was reallocated from TBS’s budget in 2024–25. That amount will rise to $12.1 million in 2025–26 and then to $15.5 million in 2026–27 and future years.

Background

Budget 2023 proposed two measures to refocus government spending:

• reduce spending on professional services, travel and operations
• phase in a roughly 3% reduction of eligible spending by departments and agencies by 2026–27; comparable reductions will be applied to Crown corporations

In total, these proposals represent savings of $15.4 billion over five years and $4.5 billion ongoing:

• These measures are designed to target eligible discretionary spending and avoid making reductions where it is impossible (for example, legal settlements) or out of scope (for example, direct transfers to provinces).
• Since the release of the budget, TBS has worked with organizations to determine the base of eligible discretionary spending for these reviews so that savings can be appropriately targeted.
• Proposals have been submitted to TBS and the work to assess them is underway. No decisions have been taken.

Information on the first phase of the refocusing results has been reported through the Estimates documents:

• $500 million for 2023–24 (shown in Supplementary Estimates (B), 2023–24) based on travel and professional services spending
• $10.5 billion over three fiscal years (2024–25 to 2026–27) shown in Main Estimates 2024–25
• additional information was included in Departmental Plans, and more will be included in future Departmental Performance Reports

The government has followed a prudent approach to ensure that proposed reallocations were sustainable and in the best interests of Canadians and the country. In certain cases, proposed reallocations were adjusted or rejected. The government has already met 97% of its reallocation targets for 2024–25, and additional reallocations will be realized through Phase 2 of the refocusing government spending initiative.

Budget 2024 announced the implementation of Phase 2 of the refocusing government spending initiative, with the government seeking to achieve savings primarily through natural attrition in the public service. Starting on April 1, 2025, federal public service organizations will be required to cover a portion of increased operating costs through their existing resources. Over the next four years, based on historical rates of attrition, the decline in the public service population is expected to achieve the remaining savings of $4.2 billion over four years, starting in 2025–26 and $1.3 billion ongoing towards the refocusing government spending target.

Refocusing government spending: TBS reallocations

As part of the refocusing government spending exercise, these amounts will be reallocated from TBS’s budget:

• 2024–25: $9,585,000
• 2025–26: $12,082,000
• 2026–27 and after: $15,500,000

Additionally, the government has updated the value of the Low-carbon Fuel Procurement Program to $134.9 million over eight years.

16. Measures to strengthen management and oversight

Issue

What is TBS doing to strengthen management and oversight of departmental practices and processes?

Response

Canadians expect their government to deliver its programs and services effectively and efficiently, carefully managing spending of public funds.

Recently, I announced a number of new actions that will strengthen management and oversight of procurement rules:

• For instance, TBS is establishing a new risk and compliance process to strengthen a government-wide culture of accountability and management excellence, with real and clear consequences for non-compliance.
• We have also strengthened the manager’s guide I announced last year to help managers determine alternatives to contracting where possible and to help them manage contracts more effectively. Additionally, certain elements of the guide have been embedded in mandatory procedures for procurement so that managers have a clear sense of their responsibilities when managing a contract.
• TBS is also performing a horizontal audit across a number of departments to assess governance, decision-making and controls for professional services contracts, including IT.
• To provide information that is accurate and easy to understand, TBS is improving and enhancing how TBS publishes information about contracts on the Open Data platform.
• Finally, TBS is reviewing the Directive on Conflict of Interest to ensure that requirements are clear and effective, particularly regarding outside employment.

I look forward to keeping committee members apprised of the government’s progress.

Background

On March 20, 2024, the Minister of Public Services and Procurement and the President of the Treasury Board announced new actions TBS is taking to enhance its oversight of departmental practices and processes and support effective management across government. These actions included:

• launching a new risk and compliance process in the coming months to enable TBS to more actively oversee government-wide management practices and outcomes and take immediate corrective actions where necessary
• undertaking a horizontal audit of procurement governance, decision-making, and controls associated with professional services contracts, including IT
• updating procurement guidance for managers to help them make decisions that demonstrate a prudent use of tax dollars
• bringing forward measures to strengthen the accountability of managers when procuring professional services
• committing to publishing more detailed contracting information on the Open Data Portal in a clear, accurate and more user-friendly manner
• ensuring conflict of interest requirements are clear and effective, particularly as they relate to employees who engage in outside employment, the adequacy of mandatory training for employees and managers, and any additional oversight as may be required

Budget 2024 reiterated the details of the announcement as part of its commitment to strengthen the integrity in the public service.

Further details on each of the actions are set out below.

New risk and compliance process

TBS is developing a process that will assess departmental compliance and risk in key management areas, leading to corrective actions where necessary.

The new process will launch in the coming months and aims to strengthen departmental and government-wide management performance.

The new process will replace the Management Accountability Framework, building on its foundations and benefiting from feedback provided by departments over the past several years.

• For over 20 years, the Management Accountability Framework has been used to monitor the management performance of federal departments and agencies, including assessing policy compliance and performance within organizations, and highlighting management strengths and opportunities to improve.

Conflict of interest

To ensure that public servants maintain the trust of Canadians, the government has a framework of rules designed to safeguard the values and ethics of the public service. The Chief Human Resources Officer will review the Directive on Conflict of Interest to ensure that the requirements are clear and effective, particularly as they relate to employees who engage in outside employment, including contracts with the Government of Canada.

The Chief Human Resources Officer will also review guidance provided to deputy heads to support the effective exercise of their authorities and responsibilities under this directive, the adequacy of mandatory training for employees and managers, and what additional TBS oversight of the directive may be required. Additional oversight could include strengthening the consequences of non-compliance with the directive.

Horizontal audit

The Office of the Comptroller General initiated a Horizontal Audit of Procurement Governance that will assess governance and decision-making associated with procurement of professional services.

A horizontal audit will allow for procurement governance to be assessed in the same way across several departments and will also consider specific roles played by certain common service providers and the policy centre.

Selected departments have been notified and they include a sample of large and small departments, common service providers, as well as TBS’s Office of the Comptroller General in its policy centre role.

If needed, the selected departments are:

• Employment and Social Development Canada
• Immigration, Refugees and Citizenship Canada
• Department of Fisheries and Oceans
• Health Canada
• Canadian Heritage
• Indigenous Services Canada
• Crown-Indigenous Relations and Northern Affairs
• Canadian Nuclear Safety Commission
• Impact Assessment Agency of Canada (large and small departments)
• Public Services and Procurement Canada
• Canada School of Public Service (common service providers)
• Treasury Board of Canada Secretariat (central agency and policy lead)

The results of the internal audit are expected in December 2024 and will be published on the TBS website thereafter.

Departments will be responsible for developing management action plans to address recommendations made as a result of this audit.

Updating procurement guidance for managers

TBS released an update to the Manager’s Guide: Key Considerations When Procuring Professional Services. These updates include additional guidance to help managers in making decisions that demonstrate a prudent use of tax dollars.

Updates include reinforcing managers’ responsibilities to:

• examine existing human resources and staffing strategies prior to deciding to procure professional services
• provide a clear statement of work and fair evaluation criteria by which a supplier is selected
• exercise due diligence to maintain the integrity of a procurement, ensuring that there is no conflict of interest
• monitor and document the delivery of services and ensure that obligations under the contract are met, including by subcontractors, prior to issuing payment

Strengthening the accountability of managers when procuring professional services

TBS is bringing forward measures to strengthen the accountability of managers when procuring professional services by embedding certain elements of the manager’s guide within mandatory procedures that fall under the Directive on the Management of Procurement.

This includes reinforcing that managers have exercised diligence in validating that contracting for professional services is the optimal approach to delivering on operational requirements and that they have exercised their accountabilities for structuring and managing the contract in a manner that is consistent with the core principles of fair, open and transparent procurement.

Open Government Portal

The Office of the Chief Information Officer (OCIO) continues to enhance the Open Government Portal (Open Government) to provide additional information about contracts and improve the way it is presented. We have:

• improved the way contracts are presented, linking initial contracts with their amendments and providing a single total contract value (Search Government Contracts over $10,000); this mitigates instances of double counting
• published an interactive data visualization dashboard for contracting information (Proactive Publication: Contracts – Data Visualization)
• provided detailed reports of common data errors, along with recommendations on how to resolve them, to more than 40 institutions in support of ongoing efforts to correct data that may have previously been uploaded erroneously

The OCIO will also be posting the GC Enterprise Health Dashboard to tell a more integrated performance story and monitor service outcomes for Canadians.

The OCIO and the Office of the Comptroller General continue to work with institutions and offer technical and policy support as they work to validate contracting data published on the Open Government Portal.

17. Professional services

Issue

The Government of Canada’s use of professional services

Response

Contracted services are a regular part of government operations and complement the work of our professional public service.

These services are used to support a broad range of activities, including construction and engineering, health care delivery, and contaminated site remediation.

As a percentage of total expenditures, government spending on professional services has remained relatively consistent for more than a decade.

TBS regularly reviews its guidance to support departments in their contracting activities.

Notably, TBS has recently taken a series of actions to strengthen management and oversight of government procurement with a specific focus on professional services.

The manager’s guide about the use of professional services has been updated to include additional guidance to reinforce managers’ responsibilities in making decisions that demonstrate a prudent use of tax dollars.

TBS has added new mandatory procedures that every manager will need to fulfill when procuring professional services. This includes managers certifying that:

• they do not have a conflict of interest
• they have not directed which resources should be working under the contract
• the contractor did not assist or have unfair access in the solicitation process

Finally, the Comptroller General is undertaking a horizontal audit to assess governance, decision-making and controls associated with professional services contracts, including IT. Audit results, expected by December 2024, will inform any additional measures that are necessary.

Background

Government spending on external professional services – a broad category that includes everything from nursing to engineering to research to management consulting – increased by $1,078 million (6%) in 2022–23 when compared to fiscal 2021–22. Although 64% of departments have increased their external professional services in fiscal 2022–23, the year-over-year variance (%) or “growth rate” of 6% for the Government of Canada is the lowest it’s been in the past three years. This is mainly related to four major types of professional services:

1. informatics services (computer services, information technology (IT) and telecommunications consultants)
2. health and welfare services (hospital services, welfare services purchased from social and related agencies, physicians and surgeons, paramedical personnel, and dental services)
3. business services (accounting and audit services, banking services, collection agency fees and charges, real estate services, and other business services)
4. engineering and architectural services (architectural design, control and plans; construction supervision of buildings and architecture of naval vessels; and services related to assessment, remediation, care, maintenance and monitoring of contaminated sites and engineering consultants)

While absolute spending has increased, the proportion of spending on external professional services has remained relatively consistent when compared to overall expenditures. Specifically, total departmental external professional services in 2011 was 11.1% of gross external expenditures, excluding transfer payments and public debt charges as compared to 11.7% in 2022. Through those years, the range was from 10.6% (2013 and 2021) to 11.8% (2016 and 2017).

Since 2011 the ratio of external professional services as a percentage of personnel expenditures by fiscal year has been relatively consistent, ranging from a low of 19% (in 2013) to a high of 23% (in 2017). For fiscal year 2022, the ratio was 22%.

While contracting is a normal and acceptable delivery strategy, the Office of the Chief Information Officer of Canada is developing a Government of Canada Digital Talent Strategy to ensure that the federal public service has the in-house digital talent and leadership it needs to build, deliver and maintain simple, secure, and efficient digital services and programs.

The strategy is designed to support the digital community in the federal public service. This includes people who have skills, knowledge and experience in a variety of digital disciplines, including development, cyber security, data and many more. It also includes leaders who guide and sponsor digital initiatives. Along with PSPC, TBS published the results of its review of contracts with McKinsey & Company in June 2023. The independent audits conducted as part of the review found no evidence of political interference in the contracts awarded to McKinsey & Company. The review also found that certain administrative requirements and procedures were not consistently followed. In addition to departments taking action, TBS outlined a number of measures it has since implemented to address these findings. This includes amendments made in June 2023 to the Directive on the Management of Procurement and the Guide to the Proactive Publication of Contracts to: ​

• require risk-based system of internal control that are maintained, monitored and reviewed, to provide reasonable assurance that procurement transactions are carried out in accordance with the framework, and applicable laws, regulations and policies, as well as ensure the accuracy, completeness and timely publication of contracting information for proactive disclosure​
• strengthen documentation requirements, particularly regarding the justification for the use of sole source
• require greater transparency in large professional services contracts above a dollar threshold by requiring additional details in contract descriptions

There have been serious questions raised regarding the integrity of the federal procurement system, including the practices of certain suppliers to the Government of Canada. Recent and ongoing audits (including by the Office of the Auditor General, Indigenous Services Canada and departmental internal auditors), practice reviews (by the Procurement Ombud), investigations (including by internal departmental investigators, the Privacy Commissioner and the RCMP) and studies by parliamentary committees concerning the use of professional services have consistently identified gaps in contracting practices and documentation.

In their reports, the Auditor General of Canada and the Procurement Ombud confirmed there are clear rules in place to ensure sound procurement management practices across government, but more can be done. In response, TBS and PSPC announced a series of new measures on March 20 to strengthen management and oversight of government procurement.

Supplementary Estimates (A), 2024–25

Supplementary Estimates (A), 2024–25 includes $703.9 million in planned spending on professional and special services. Over 90% of the planned professional services spending is found in two departments:​

• $472.5 million for Immigration, Refugees and Citizenship Canada, primarily health and welfare services under the Interim Federal Health Program as well as business services relating to Digital Platform Modernization
• $178.4 million for Indigenous Services Canada, primarily related to administration and legal costs of the implementation of the First Nations Child and Family Services, Jordan’s Principle, and the Trout Class Settlement Agreement ​

Year-to-date (Main Estimates plus Supplementary Estimates (A)), planned spending on professional and special services is $546 million lower than at the same point in 2023–24.​

18. Office of the Auditor General report on McKinsey & Company

Issue

The Auditor General’s report on professional services contracts examined whether contracts awarded to McKinsey & Company were conducted in accordance with applicable policies and whether the government received value for money for those contracts.

Response

The Government of Canada is committed to managing its finances and procurement activities responsibly.

Based on the Auditor General’s findings, we can see that contracting rules and requirements are not being consistently followed. These are concerning findings, and departments, as responsible stewards of public funds, need to take steps to improve compliance.

TBS regularly enhances its requirements and guidance to provide organizations with the rules and tools needed to appropriately manage procurements.

Following a review conducted by TBS and PSPC last year, TBS has taken action to strengthen procurement practices across organizations, including releasing a Manager’s Guide: Key Considerations When Procuring Professional Services to help managers meet their responsibilities under the Treasury Board’s rules when procuring goods and services.

TBS also announced new mandatory procedures in May 2024 as part of the Directive on the Management of Procurement, which addresses, among other requirements, conflict of interest in contracting for departments and agencies.

In addition, the Chief Human Resources Officer is reviewing the Directive on Conflict of Interest to ensure that the requirements are clear and effective, particularly as they relate to employees who engage in outside employment, including contracts with the Government of Canada.

Canadians deserve to know how their tax dollars are being spent and that they are being spent with care. The Government of Canada will continue to take steps to support, monitor and drive effective operations management across government.

Background

In January 2023, the Prime Minister requested that the President of the Treasury Board and the Minister of Public Services and Procurement Canada undertake a review of federal contracts awarded to McKinsey & Company. TBS asked departments with McKinsey & Company contracts (10 in total) to undertake an internal compliance audit. All departments did and, where applicable, developed management actions plans to address the administrative weaknesses. In addition, TBS and PSPC published a final report in June 2023 that included additional measures both departments would take in this area. The Minister of Public Services and Procurement Canada also requested the Procurement Ombud to undertake a review, which he released in March 2024.

The Office of the Auditor General audit is in response to a motion adopted by OGGO on January 18, 2023, for the Office of the Auditor General to conduct a performance and value-for-money audit of the contracts awarded to McKinsey & Company since January 1, 2011. It is broader in scope as it was to look at more than compliance and also included the 10 Crown corporations that had contracts with McKinsey & Company.

In large part, the Office of the Auditor General audit reconfirms the findings that have been noted through previous audits and reviews, notably, that no political interference was found but that departments and agencies frequently failed to properly follow all aspects of their procurement policies. Rather than repeat recommendations, the Office of the Auditor General encourages departments to implement the recommendations resulting from previous reviews.

This report provides a single recommendation concerning a more proactive process to identify conflict of interest in procurements. While the Office of the Auditor General did not find instances of conflict of interest, this has been identified as a good practice that TBS agrees with.

TBS has provided a management response to the recommendation on behalf of all 10 federal departments included in the report (not Crown corporations). The recommendation:

• emphasizes the existing duties of public servants, as a term and condition of employment, to uphold the Values and Ethics Code for the Public Sector and adhere to the Directive on the Conflict of Interest
• highlights that, further to the commitment made by the President made on March 20, 2024, and reiterated in Budget 2024, the Directive on the Management of Procurement has been amended to strengthen the management and oversight of government procurement with new mandatory procedures when contracting professional services that will require all business owners or managers to sign off on conflict of interest before entering into a contract

19. Disposal of federal real property

Issue

Federal real property policy requirements and supporting investments in affordable housing

Response

The Government of Canada is committed to making housing affordable for Canadians.

The Federal Lands Initiative, led by the Canada Mortgage and Housing Corporation (CMHC), is a $200-million fund to support the transfer of surplus federal lands and buildings and create approximately 4,000 units of affordable housing.

A number of legal obligations referenced in Treasury Board policy must be honoured during the disposal process before a property is transferred to Canada Mortgage and Housing Corporation or Canada Lands Company to be sold.

For instance, requirements include the legal duty to consult with Indigenous people, the management of contaminated sites, and consultation with official languages minority communities.

As part of its approval of the federal lands initiative, the Treasury Board provided CMHC with flexibilities to make properties available at discounted value or at no cost in order to be developed or renovated for use as affordable housing.

TBS will continue to work with PSPC to look at ways to build on these actions to expedite the real property disposals process and support the use of surplus federal lands to enable investments in affordable housing while continuing to meet our legal obligations.

Background

Key facts

Disposals may proceed by way of sale, lease, exchange, gift, easement, transfer of administration, or transfer of administration and control.

When disposing of federal real property, whether by sale or lease, there are three key areas that must be satisfied:

1. Legislative framework (this is the most significant requirement)
2. Cabinet mandates
3. Treasury Board policy

Disposals must optimize best value – an optimal balance between financial return and the achievement of socio-economic and environmental outcomes.

Legal obligations

Examples: Indigenous rights, title and treaty rights, easements, rights of way, restrictions on title, surface and subsurface rights

• There is a legal duty to consult Indigenous groups on proposed disposals wherever Indigenous rights or treaty rights are asserted or established and the contemplated Crown action (for example, sale of real property) may adversely impact the exercising of those rights.
• Consultation with official language minority communities (Bill‑C‑13 added a new requirement to the Official Languages Act)
• Various environmental legislation, in particular, around management of contaminated sites and species at risk (for example, Canadian Environmental Protection Act, Fisheries Act, Canadian Environmental Assessment Act, Nuclear Safety and Control Act and so on)
• National Capital Act, which includes the mandate of the National Capital Commission

Treasury Board policy

• Assessment of affordable housing potential (stemming from the Federal Lands Initiative, custodians must assess surplus properties to determine if they have potential to support housing developments), physical performance, heritage value, security conditions and market value
• Simultaneous solicitation of public purpose interests to other levels of government

Disposal process: order of priority for parties to acquire federal real property

1. Legal rights, treaties: Indigenous groups as an accommodation to satisfy rights claim
2. Cabinet mandate: Qualifying properties are sold to Canada Lands Company, with all expressed public purpose interests handed over for consideration in redevelopment business plan
3. Public purpose: Property may be sold or transferred for continued public purpose use, according to priority order:
   1. federal department or agency (for example, CMHC – Federal Lands Initiative)
   2. agent Crown corporation
   3. province
   4. municipality or Indigenous group
4. Ministerial direction: A minister has authority to direct a sale based on socio-economic outcomes (for example, reconciliation, official language minority community interests)
5. Open public solicitation (open market)

20. Greening government

Issue

The updated Greening Government Strategy, led by TBS, specifies that Government of Canada operations will be net-zero emissions by 2050, and will enhance its climate resilience by 2035, while also reducing environmental impacts beyond carbon, including on waste, water and biodiversity.

Response

Climate change is one of the greatest global challenges of our time. Climate action is required now, and that is what the government will continue to deliver.

The Government of Canada is committed to being a leader in government operations that are net zero, resilient and green.

The Greening Government Strategy is a blueprint for advancing emissions reduction, resiliency and greening government initiatives.

It focuses on key areas, including real property, mobility and fleets, procurement of goods and services, and climate-resilient services and operations.

The strategy was recently updated to strengthen the government’s actions to green its operations. Some of the changes include:

• broadening the scope of the strategy to include Crown corporations
• introducing new greening targets for national safety and security fleets
• increasing action to adapt federal infrastructure to protect it from current or expected impacts of climate change

TBS will continue to work with departments and Crown corporations to meet the government’s greening commitments to reduce greenhouse gas emissions by 40% by 2025 and by at least 90% below 2005 levels by 2050.

Background

As the owner and manager of the largest fixed asset portfolio in Canada (over 34,000 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 $30 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 and 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
• administering the Low-carbon Fuel Procurement Program
• working with PSPC on common procurement tools that incorporate greening criteria

21. Access to information and privacy

Issue

TBS has advanced a Trust and Transparency Strategy that sets out commitments to support federal government institutions in reinforcing public trust. In parallel, TBS is also advancing key actions to ensure the Government of Canada’s privacy risks are being accurately identified and managed.

Response

The government is committed to meeting citizens’ expectations for openness and accountability.

Concrete actions are being taken to enhance the ATIP experience, including:

• the development of policy instruments and tools, such as the Privacy Act: Plain Language Guide to Exemptions and Exclusions
• improved functionality to the ATIP Online system
• the establishment of the Access to Information and Privacy Communities Development Office to address capacity issues in the ATIP community across Government of Canada institutions

This why we introduced the Trust and Transparency Strategy, a whole-of-government vision to support federal government institutions in strengthening public trust and ensuring Canada’s democratic institutions remain strong and resilient.

As a key pillar of the strategy, the Access to Information Modernization Action Plan addresses the most pressing challenges facing the ATI regime to meet the expectations of Canadians and Indigenous Peoples.

It outlines policy, administrative and operational activities the Government of Canada will undertake to strengthen the ATI regime in advance of the next legislated review of the Access to Information Act, to be launched in 2025.

One of the actions the government has taken is the development of the Policy Guidance on the Disclosure of Historical Records. The policy guidance is intended to enable a more efficient and consistent approach to the review and potential disclosure of historical records.

The 2024 federal budget proposed $84 million in funding for TBS and Library and Archives Canada to maintain the ATI and privacy regime.

The government will continue to work with key stakeholders and federal institutions to improve access to government information and the safe holding of Canadians’ private information.

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 to maintain the ATI and privacy regime and expedite requests. Some funding for TBS and Library and Archives Canada will be devoted specifically to advance the work on declassification and disclosure and support other key actions. This work will benefit both present and future generations.

On May 29, 2024, the President of the Treasury Board announced the publication of the Government of Canada’s Trust and Transparency Strategy, which sets out a whole-of-government blueprint to strengthening public trust in federal institutions.

The Trust and Transparency Strategy is made up of two key pillars: The Access to Information Modernization Action Plan and the National Action Plan on Open Government, as follows:

1. Access to Information Modernization Action Plan (2023-2026)

In an appearance before Standing Committee on Access to Information, Privacy and Ethics, the previous President stated her intention to publish an action plan that addressed the 21 conclusions of the 2022 ATI Review Report to Parliament, which highlighted several areas where administrative or operational improvements were needed. The Access to Information Modernization Action Plan was developed in response to this commitment and addresses these opportunities for improvement.

In line with the 2022 ATI Review Report to Parliament, the Action Plan continues to focus on the same three strategic goals:

1. improving services to Canadians
2. enhancing trust and transparency
3. advancing Indigenous reconciliation

Key actions

The Access to Information Modernization Action Plan sets out a series of actions to be undertaken over the next three years to address the most pressing administrative and operational challenges facing the ATI regime, including:

• facilitating timely processing of ATI requests
• strengthening the ATI workforce
• helping counter misinformation and disinformation
• strengthening transparency and ATI for all users of the regime, including Indigenous Peoples

Policy Guidance on the Disclosure of Historical Records

In one of the first key actions taken in support of the Access to Information Modernization Action Plan, TBS has also simultaneously published its Policy Guidance on the Disclosure of Historical Records.

The policy guidance was developed in collaboration with several federal institutions to enable a more efficient and consistent approach to the review and potential disclosure of historical records. In particular, the policy identified recommended non-statutory time thresholds to help federal institutions apply discretionary exemptions under the Access to Information Act.

This guidance also complements broader, ongoing policy work in examining declassification, the exploration of new tools to facilitate request processing (such as AI-assisted review), and it supports work in preparation for the next review of the Access to Information Act, to be launched in 2025.

2. National Action Plan (2025-2029)

The National Action Plan on Open Government aims to leverage the principles of open government to solve real-world problems of importance to Canadians and ultimately make the Government of Canada more transparent, accountable and participatory.

As part of the Open Government Partnership, Canada has published five national action plans and is currently advancing the sixth.

To ensure federal government institutions remain responsive to the needs of Canadians, the public, civil society, academia and the private sector are provided with the opportunity to co-create national action plans and influence government policy and decision-making.

• Together, these two key pillars support the achievement of the objectives of the Trust and Transparency Strategy, namely, better access to government data and information, providing information and tools to hold government to account, and making it easier for Canadians to be more involved and engaged in decision-making processes

Review of the ATIA

The inaugural Access to Information Review Report to Parliament presented 21 conclusions for modernizing the ATI regime, including several pressing areas for administrative and operational improvements.

The Access to Information Modernization Action Plan prioritizes actions to address these administrative and operational challenges, to improve the administration of the current legal framework.

The next mandated review of the ATIA is to be launched in 2025 and will give the Government of Canada the opportunity to explore ways to continue strengthening the ATI regime and address conclusions that would require legislative change.

Privacy impact assessments

Recognizing the importance that Privacy Impact Assessments (PIAs) play in managing personal information and preventing privacy breaches, TBS is modernizing its policy instruments on PIAs. The changes to the PIA policy instruments will broaden the scope of application to a wider range of Government of Canada initiatives, including initiatives’ use of IT and automated decision-making systems, standardize reporting, and clarify TBS’s advisory role. The changes will further support TBS’s role in assisting departments meeting their requirements under the Privacy Act and related TBS policies. These policy changes are in keeping with a commitment made by the President during her appearance before the Standing Committee on Access to Information, Privacy and Ethics on March 21, 2024, in relation to its study, Federal Government’s Use of Technological Tools Capable of Extracting Personal Data from Mobile Devices and Computers.

22. Government of Canada cyber security events: Government of Canada’s roles and responsibilities and recent events

Issue

The Government of Canada’s approach to cyber threats that pose a risk to government infrastructure and services, and the Government of Canada’s response to notable cyber incidents this past year

Response

The Government of Canada, like every other government and private sector organization, faces persistent cyber threats.

There are systems and tools in place to monitor, detect and investigate potential threats, and take active measures to neutralize them.

Cyber threat activities are growing in scale and complexity. In response, the Government of Canada published its first Enterprise-Wide Cyber Security Strategy this past May.

The strategy aims to reduce cyber security risks, improve the cyber security of government operations, and keep pace with the evolving cyber security threat landscape.

TBS and its partners across government will continue to prevent, detect and manage cyber incidents so that federal organizations can deliver reliable and secure digital services to Canadians.

Background

The government works continuously to enhance cyber security in its services by preventing attacks through implementation of protective security measures, identifying cyber threats and vulnerabilities, and by preparing for and responding to all kinds of cyber incidents to better protect Canada and Canadians.

Cyber security is a shared responsibility across government. Departments and agencies have a responsibility to ensure that cyber security is managed within their organization, including the cyber security of departmental programs and services. TBS, Shared Services Canada and the Communications Security Establishment are the primary stakeholders with responsibility for ensuring the government’s cyber security posture is effective and able to respond to evolving threats. The Communications Security Establishment, in concert with Public Safety Canada, also provides support on cyber security from a national perspective. TBS provides policy leadership, advice and guidance for all matters related to government security, establishes and oversees a whole-of-government approach to security, and provides strategic oversight of government cyber security event management to ensure effective coordination of major security events and support government-wide decision-making. The Chief Information Officer of Canada sets IT security policy, defines cyber security requirements, and executes decisions on the management of cyber security risks on behalf of the Government of Canada.

Over the past decade, the government has taken steps to improve its cyber security posture by standardizing IT infrastructure and integrating cyber defence services, establishing the Canadian Centre for Cyber Security, and putting in place clear governance, policies and tools to support cyber security. Despite this progress, gaps still remain. The Government of Canada’s Enterprise Cyber Security Strategy aims to address these gaps and ensure the government is well positioned to address future cyber threats. It is a forward-looking plan to improve cyber security across government departments and agencies to continue to provide secure and reliable digital government services. It serves as a framework to move the government even more from a defensive position to a proactive cyber security approach by improving training, applications, policy and monitoring. Budget 2024 proposes to provide $11.1 million over five years, starting in 2024–25, for TBS to implement a whole-of-government cyber security strategy. Specifically, funding will support key actions, including:

• establishing a centralized evaluation system with independent assessments and thorough reviews of departments’ cyber security to identify and prioritize risks
• creating a federated integrated risk management platform to enable prioritization and data-driven reporting as a key part of a broader enterprise portfolio management system
• creating a government-wide vulnerability management program for a coordinated vulnerability disclosure process that will focus on people, processes, policies and technology
• forming a new “Purple Team” that will emulate techniques used by malicious threat actors against government systems to proactively test and audit any security gaps; this type of team does not currently exist in the government

TBS also maintains the Government of Canada Cyber Security Event Management Plan (GC CSEMP). The GC CSEMP is the whole-of-government incident response plan providing an operational framework, which outlines the stakeholders and actions required to ensure that cyber security events are addressed in a consistent, coordinated and timely fashion across the government. The plan is applicable to all departments subject to the Policy on Government Security. To ensure that the GC CSEMP is up to date and effective, the plan is tested regularly, reviewed on an annual basis and updated if changes are warranted, for example, in light of lessons learned from cyber events. The latest version of GC CSEMP was published in October 2023. The most recent cyber simulation took place in February 2023 as part of the government’s executive-level cyber simulation exercises designed to test how the Government of Canada responds to a significant cyber event impacting multiple departments.

In January 2024, escalation under the GC CSEMP was required in response to a cyber incident impacting remote access services of Global Affairs Canada within Canada. While Global Affairs Canada critical services were not impacted, this resulted in a data breach that affected employees.

In February 2024, the Royal Canadian Mounted Police (RCMP) was affected by a cyber event that targeted its networks, forcing it to launch a criminal investigation into the breach. There was no impact on RCMP operations and no known threat to the safety and security of Canadians.

In March 2024, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) experienced a cyber attack resulting in unauthorized access to data capture network. Following extensive forensic analysis performed by the Canadian Centre for Cyber Security, there was no evidence that information was lost or that data was exfiltrated during the incident. It is also worth noting that the Canadian Centre for Cyber Security did not assess this incident as a systemic risk to the Canadian financial sector.

Cyber incidents have also impacted services contracted out by the government. Compromises within the supply chain have an impact on the Government of Canada and introduce operational risks when third-party services are used. Managing cyber security risks in supply chains requires ensuring the integrity, security, quality and resilience of the supply chain and its products and services.

In October 2023, relocation support services provided by a third-party supplier (BGRS and SIRVA Canada) were affected by a cyber incident that impacted current and former affected employees of the Government of Canada, the Canadian Armed Forces and the RCMP. In February 2024, a fourth-party supplier (MSH International) under Canada Life providing PSHCP travel and emergency assistance benefits was affected by a cyber incident. Both of these incidents had privacy implications and warranted a Government of Canada–wide response, including invocation of the GC CSEMP Communications Framework to ensure consistent and coordinated messaging from the Government of Canada. The Policy on Privacy Protection also requires that federal institutions have plans in place to respond to privacy breaches, including those resulting from a cyber security event or incident.

23. Responsible use of artificial intelligence

Issue

Departments have been exploring AI technologies to improve services to Canadians. The Government of Canada is committed to ensuring the responsible development and use of AI in the federal public service. Media and public interest in AI has grown significantly over the past year, following the release of generative AI tools like ChatGPT to the public.

Response

The government is committed to ensuring the responsible use of AI, including the use of generative AI tools.

AI has been used in workplaces, including in the public service, for decades in some form or another, including as a tool to support analysis, assist with prediction, or to support decisions.

With the rise in use of AI tools, TBS continues to introduce direction, tools and guidance that enable departments to responsibly manage the use of AI.

In late May, I led a roundtable with Canada’s top AI researchers and academia on the development of the federal public service’s first AI strategy.

The strategy will ensure responsible AI adoption throughout the government to enhance productivity of public servants, increase the capacity for science and research, and to ultimately deliver simpler, digital services for people in Canada.

The strategy is expected to be completed in spring 2025.

Background

The Government of Canada’s approach to responsible artificial intelligence

The federal government prioritizes transparency, accountability and fairness in its AI work. In 2019, TBS issued the Directive on Automated Decision Making to support this approach. The directive sets out rules for how departments and agencies can use automated systems in service decisions. It applies to automated decision systems that make or support decisions impacting the rights, interests or privileges of clients. Clients covered by the directive include members of the public, businesses and federal employees.

TBS has also created the Algorithmic Impact Assessment (AIA) tool to help federal institutions understand and manage the risks of their automation projects, and to determine applicable requirements under the directive. The directive requires federal institutions seeking to automate an administrative decision to complete and publish the AIA, which supports transparency and fosters public trust. AIAs published on the Open Government Portal provide a growing repository of examples of how AI is used to improve services, including immigration, public health and social benefits.

The directive and AIA were developed in open collaboration with civil society, academia, industry and other governments. TBS published amendments to the directive in April 2023 following the completion of the third review of the instrument. The amendments ensure that automation in decisions affecting federal employees is subject to the directive and strengthen the policy’s requirements to ensure the government continues to meet its commitment to responsible AI in the federal public service.

In 2023, TBS also issued a guide to support federal institutions in the responsible use of generative AI. The guide establishes principles to help public servants assess the risks associated with generative AI and use it responsibly during their day-to-day activities. It also offers policy considerations and best practices for federal institutions developing or deploying generative AI tools. The guide will help employees and federal institutions assess and mitigate risks, ensure they are complying with federal laws and policies, and use generative AI in a manner that maintains public trust in digital government.

Complementing these efforts, the Canadian Centre for Cyber Security also issued guidance that documents the cyber security risks associated with generative AI and the best practices to mitigate those risks.

TBS has named a Chief Data Officer for the Government of Canada, reflecting the importance of dedicated leadership in responsible data and AI within the federal public service.

In early 2024, TBS embarked on a project to develop the AI Strategy for the Public Service. The strategy, to be completed in spring 2025, will provide North Star direction to the Government of Canada for AI, including policy, governance, talent and upskilling, and procurement.

24. Government of Canada Digital Talent Strategy

Issue

The Government of Canada’s ability to improve the delivery of government services depends entirely on the government’s digital capacity driven by digital talent. Driven by Canada’s Digital Ambition, the GC Digital Talent Strategy will ensure that the Government of Canada has the digital talent, processes and culture to design and deliver robust digital services to better serve people across Canada.

Response

Canadians expect and need the government to build and deliver simple, secure, and efficient digital services and programs.

Our people are our greatest resource, and the government is investing in skills training for new and existing employees to address talent gaps, create new job opportunities and upskill our workforce.

Published in fall 2023, the GC Digital Talent Strategy outlines our commitment to building a skilled and diverse workforce and identifies specific actions to attract, develop and retain digital talent.

Actions include using flexible staffing options to recruit and develop digital talent and leveraging existing enterprise recruitment and development services.

In particular, the GC Digital Talent Platform connects individuals, internal and external to government, with a wide range of Government of Canada digital and tech roles. It simplifies the application process to bring in digital expertise quickly and efficiently.

The platform currently has 636 prequalified applicants ready to be paired with digital opportunities in the Government of Canada. New job opportunities are posted on an ongoing basis.

The government will continue to research and identify effective and efficient methods to strengthen its workforce to provide greater services to Canadians.

Background

The GC Digital Talent Strategy is driven by TBS’s Office of the Chief Information Officer, which has been tasked with managing the digital community.

The strategy has four missions:

• Mission 1: Attract and recruit digital talent – improve recruitment processes and tools to help the Government of Canada better meet digital talent needs and expectations when joining the federal public service
• Mission 2: Develop and retain digital talent – create skill development initiatives that enable digital talent to keep pace with the continuous evolution of technology, and career pathways that enable meaningful advancement in both individual contributor and leadership roles
• Mission 3: Build fit-for-purpose processes, policies and tools – develop organizational agility, reduce administrative burden, and set up digital talent and the enterprise for digital change
• Mission 4: Create a digital culture defined by diversity, equity and inclusion that puts people first to drive service delivery excellence – build a digital community that reflects the diverse people they serve to better equip the Government of Canada to design and deliver equitable, inclusive and accessible services

Early guidance is being shared with departments and agencies to help them fulfill the seven common actions all organizations must take to support digital talent:

1. Use existing enterprise recruitment and development services before developing new ones
2. Align with and comply with the Policy on Service and Digital and its digital talent component, the Directive on Digital Talent and Mandatory Procedures on Digital Talent
3. Review the department’s internal processes that impact digital service development and adjust those that are not fit for purpose
4. Align with government-wide direction on building multidisciplinary teams and using flexible staffing options to recruit and develop digital talent
5. Create space for continuous learning through the Canada School of Public Service or specialized training offerings
6. Instill a human-centred, outcomes-focused and service-focused culture to help increase the Government of Canada’s digital government maturity
7. Identify and communicate to TBS any barriers to recruiting, developing or retaining digital talent

While the strategy is in its early days of implementation, some additional early successes include:

• the Annual Digital Talent Survey, which gathers business intelligence from the digital community for evidence-based human resources planning decisions
• a host of services directly to departments, including executive recruitment, talent management, career guidance, mentoring, learning paths, and more.
• tests of new initiatives, and scaling those that best support the digital community. For example, creating a permanent senior technologist role and a dual-track career progression framework.

25. Supplementary Estimates (A), 2024–25: appearance-specific key issues

New measures to strengthen procurement

On March 20, government announced a series of measures to strengthen management and oversight of government procurement:

• develop a risk and compliance process to assess trends, risks and individual departmental performance in key management areas and take immediate corrective actions where necessary
• conduct a horizontal audit across a number of departments to assess governance, decision-making and controls associated with professional service contracts, including IT
• launch an updated manager’s guide and commit to create new mandatory procedures when procuring professional services to strengthen the accountability of business owners and managers
• review the Directive of Conflict of Interest and what additional TBS oversight may be required
• provide additional contract information on open data; in addition, the Comptroller General requested that departments review the completeness and accuracy of their institutions’ proactive publication of contracts by June 7, 2024

Contracting values

Government-wide

• GC Strategies / Coredal Technology Consulting, January 1, 2011, to February 16, 2024: 120 contracts – $107.8 million
• Dalian Enterprises, January 1, 2011, to March 4, 2024: 445 contracts – $127.8 million
• Coradix Technology Consulting, January 1, 2011, to March 4, 2024: 541 contracts – $596.8 million.
• Dalian Enterprises and Coradix Technology Consulting (in joint venture), January 1, 2011, to March 4, 2024: 122 contracts – $189.5 million.
• McKinsey & Company, since 2011: 39 contracts –$117.44 million

TBS

• GC Strategies, January 1, 2011, to February 16, 2024:
  • TBS authority: 10 contracts – $9.97 million
  • PSPC authority: 1 contract – $1.37 million
• Dalian Enterprises, January 1, 2011, to March 4, 2024: 2 contracts – $49,654.56
• Coradix Technology Consulting, January 1, 2011, to March 4, 2024: 4 contracts – $103,632.30
• TBS had no contracts with Dalian Enterprises and Coradix Technology Consulting as a joint venture nor with Coredal or McKinsey & Company

Conflict of interest (declarations)

A review of the Directive on Conflict of Interest is underway to ensure requirements are clear, and to assess what additional oversight may be required, such as strengthening the consequences of non-compliance. The results of this review are expected by the end of the year.

The directive states that employees must advise their deputy head of outside employment and activities that could result in a real, apparent or potential conflict of interest that could impair their ability to be objective and impartial.

The directive also requires employees to seek deputy head approval before entering into a contractual arrangement with the government for which they are receiving direct or indirect benefit or income. Non-compliance may be subject to disciplinary measures, including termination of employment.

There were 79 conflict of interest declarations in 2022–23 and 84 conflict of interest declarations in 2023–24 across the core public administration in relation to a potential contractual relationship with the Government of Canada. In response to a May 2 motion, TBS submitted conflict of interest forms on behalf of those organizations, along with a list of contracting entity names. Personal information was protecting as per the Privacy Act.

Federal procurement and professional services

In 2022–23, as reported in the Public Accounts, the government spent $14.3 billion on external professional services. This includes a broad range of services, including construction, health care and engineering.

Less than 6% of this amount ($838.3 million) was spent on management consulting.

A new manager’s guide helps determine when to contract professional services versus when to use internal resources.

As well, the recently launched Directive on Digital Talent prompts hiring managers to assess internal capacity before looking at outside resources.

McKinsey & Company

The government accepts the recommendations from Auditor General reports and the Procurement Ombud’s report.

The Auditor General acknowledged procurement rules exist, but they only work if they are followed and provided one recommendation for preventing conflict of interest in the procurement process.

TBS made mandatory certain elements of the manager’s guide in the Directive on the Management of Procurement.

These new mandatory procedures formalize accountabilities and address issues such as conflict of interest.

PSPC has also taken steps to improve fraud prevention and detection in the administration of professional services contracts.

TBS and PSPC continue to work with departments to maintain integrity of the procurement process and help organizations effectively manage their procurement activities.

Canada Life

OGGO’s report on the changeover of the PSHCP from Sun Life to Canada Life was presented on June 3, 2024. We are analyzing the report’s recommendations and will respond to the committee in due course.

Since Canada Life implemented its customer service action plan in November 2023, there have been significant improvements to call centre wait times and claim reimbursement time. Service standards are now being met.

We are also starting to see improvements with MSH International.

Canada Life worked with MSH International to introduce a similar action plan, investing in additional staff, and prioritizing urgent cases by leveraging Canada Life’s escalation process.

MSH International also updated their online portal to improve member experience and provide more information on claims submitted.

Public service issues

As of March 31, 2024, the size of the federal public service was 367,772 employees.

Personnel costs as a proportion of total expenditures have generally stayed the same.

By September 9, 2024, federal public servants will be required to work on site a minimum of three days per week and four for executives.

This is an administrative decision taken by TBS, working with deputy ministers from across government.

These changes will maximize the benefits that consistent in-person interactions offer and will bring greater consistency and fairness.

We will continue to monitor how hybrid is working and ensure that it continues to provide fairness, flexibility and focus on a high-performing service delivering for Canadians.

Collective bargaining (FB Group)

The Government of Canada and PSAC have reached a tentative agreement for the Border Services Group.

Upon ratification and approval by the Treasury Board, the renewed collective agreement would apply to approximately 11,000 employees.

The four-year agreement includes wage increases of 12% over four years, which align with agreements recently signed for other public servants, plus a 2.8% adjustment that recognizes the unique role of these employees.

Should this tentative agreement be ratified and approved, the government will have reached agreement with 18 bargaining units and covering more than 84% of the public service.

We are continuing with negotiations for the remaining active bargaining tables and are committed to reaching similar positive outcomes.

26. Supplementary Estimates (A), 2024–25: highlights

Supplementary Estimates (A) overview

Supplementary Estimates (A), 2024–25 presents $12.7 billion in budgetary spending:

• $11.2 billion to be voted (5.8% increase from 2024–25 Main Estimates)
• $1.5 billion in forecast statutory expenditures (up 0.6% from 2024–25 Main Estimates)

Year to date (Main Estimates plus Supplementary Estimates (A)), voted budgetary spending is $202.8 billion, $15.9 billion lower than at the same point in 2023–24. Statutory spending is up $22.9 billion over the same period.

Indigenous Services Canada

Indigenous Services Canada is seeking $2.2 billion, including:

• $769.7 million for water and wastewater treatment
• $633.5 million for First Nations child and family services
• $143.9 million for the Indigenous Health Equity Fund
• $129.1 million for compensation and reforms to child and family services and Jordan’s Principle
• $121.3 million for the Inuit Child First Initiative
• $120.2 million for medical travel costs in Nunavut and Northwest Territories

Budget 2024

Of the planned spending in Supplementary Estimates, approximately $1.6 billion relates to funding announced in Budget 2024, including:

• $604.9 million for the Incentives for Zero-Emission Vehicles Program
• $411.2 million for the Interim Federal Health Program
• $141.2 million for temporary accommodation and support services to asylum claimants
• $121.3 million for the Inuit Child First Initiative
• $100.5 million to advance Indigenous children and family services laws

Other funding announced in Budget 2024 will be presented in future Estimates.

Statutory expenditures included in Estimates for information

Supplementary Estimates (A), 2024–25 also presents for information purposes:

• $1.5 billion in statutory^{Footnote 1} budgetary spending
• $1.3 billion in statutory non-budgetary^{Footnote 2} spending

Statutory budgetary amounts have been updated to reflect updated forecasts from Budget 2024, and include:

• $1.9 billion in public debt charges
• $165.6 million for the Canada Infrastructure Bank
• a $533 million decrease in benefits for the elderly based on updated forecasts

Statutory non-budgetary amounts reflect a loan to the International Monetary Fund’s Poverty Reduction and Growth Trust announced in September 2023.

TBS spending and Treasury Board central votes

Changes to TBS departmental votes include:

• $2.4 million in Vote 1 – Program Expenditures to initiate implementation of the modernized Official Languages Act

TBS is also seeking $250 million in Treasury Board Vote 5 – Government Contingencies, which will increase from $750 million to $1 billion.

• In recent years, urgent and unforeseen pressures such as support for Ukraine, out-of-court settlements and COVID‑19 response measures have placed considerable pressure on Treasury Board Vote 5.
• This is the first increase in Treasury Board Vote 5 since 2000–01, and it will ensure that the government can continue to quickly and adequately respond to urgent situations in the future.

Settlements of Indigenous claims

The Department of Crown-Indigenous Relations and Northern Affairs is seeking $5.6 billion, primarily for settlements addressing past grievances and historic harms committed against Indigenous Peoples, including:

• $1.8 billion for agricultural benefits claims
• $1.5 billion for Federal Indian Day Schools and Indian Residential Schools Day Scholars settlements
• $1.0 billion for the Specific Claims Settlement Fund
• $447.9 million for historical claims
• $393.1 million for land-related claims and litigation
• $303.6 million for the Federal Indian Boarding Homes settlement

Professional services

Supplementary Estimates (A), 2024–25 includes $703.9 million in planned spending on professional and special services. Over 90% of the planned professional services spending is found in two departments:

• $472.5 million for Immigration, Refugees and Citizenship Canada primarily health and welfare services under the Interim Federal Health Program as well as business services relating to Digital Platform Modernization
• $178.4 million for Indigenous Services Canada, primarily related to administration and legal costs of the implementation of the First Nations Child and Family Services, Jordan’s Principle, and Trout Class Settlement Agreement

Year to date (Main Estimates plus Supplementary Estimates (A)), planned spending on professional and special services is $546 million lower than at the same point in 2023–24.

Support for migrants

Immigration, Refugees and Citizenship Canada is seeking $951.5 million, including:

• $411.2 million for the Interim Federal Health Program
• $314.5 million for interim housing assistance
• $141.2 million for temporary accommodation and support services to asylum seekers