Treasury Board of Canada Secretariat Quarterly Financial Report for the Quarter Ended December 31, 2025

1.1 Basis of presentation

This report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Treasury Board of Canada Secretariat’s (TBS’s) spending authorities granted by Parliament and those used by TBS, consistent with the Main Estimates, the Supplementary Estimates (A) and the Supplementary Estimates (B) for the fiscal year ending March 31, 2026. This report has been prepared using a special-purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.

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

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

1.2 Raison d’être

TBS is the central agency that acts as the administrative arm of the Treasury Board, a committee of Cabinet. TBS supports the Treasury Board in the following principal roles:

1.3 TBS’s financial structure

TBS manages both departmental and Treasury Board central votes. Its departmental operating expenditures and revenues are managed under Vote 1, Program expenditures.

This quarterly report highlights the financial results of:

• Vote 1, Program expenditures, related to the delivery of TBS’s mandate
• Vote 20, Public Service Insurance, provides the employer’s share of group benefit plan coverage costs as part of the Treasury Board’s role as the employer of the core public administration. These plans include:
  • Public Service Health Care Plan
  • Public Service Dental Care Plan
  • Pensioners’ Dental Services Plan
  • Disability Insurance Plan
  • provincial payroll taxes (British Columbia, Manitoba, Newfoundland and Labrador, Ontario and Quebec)
  • Public Service Management Insurance Plan
• statutory authorities that mainly reflect contributions to employee benefit plans

Central vote funding is transferred from TBS to individual departments and agencies once specified criteria are met. These amounts are reflected in each recipient’s financial reports. TBS also receives funding from central votes into its own Vote 1 (Program expenditures). Unused central vote funding is returned to the Consolidated Revenue Fund.

TBS manages six central votes:

• Vote 5, Government Contingencies, supplements other appropriations to provide federal departments and agencies with temporary advances for urgent or unforeseen departmental expenditures between parliamentary supply periods
• Vote 10, Government-wide Initiatives, supplements other appropriations to support the implementation of strategic management initiatives across the federal public service
• Vote 15, Compensation Adjustments, supplements other appropriations to provide funding for adjustments made to terms and conditions of service or employment of the federal public administration as a result of collective bargaining
• Vote 25, Operating Budget Carry Forward, supplements other appropriations for the carry forward of unused operating funds from the previous fiscal year, up to 5% of the gross operating budget in an organization’s Main Estimates
• Vote 30, Paylist Requirements, supplements other appropriations to meet legal requirements for the government as employer for items such as parental benefits and severance payments
• Vote 35, Capital Budget Carry Forward, supplements other appropriations for the carry forward of unused capital funds from the previous fiscal year, up to 20% of an organization’s capital vote

Expenditures incurred against statutory authorities mainly reflect the government’s obligation to pay the employer’s share of the Public Service Pension Plan, the Canada Pension Plan and the Québec Pension Plan, Employment Insurance premiums and public service death benefits. TBS recovers from other government departments and agencies their share of the employer contributions under the Public Service Superannuation Act and is subsequently charged by Public Services and Procurement Canada for actual expenditures in the same statutory vote. Adjustments are made at year-end to individual departments’ statutory votes (including those of TBS) for the difference between periodic recoveries and actual expenditures. At year-end, the net effect on TBS’s financial statements will be zero.

2.1 Statement of voted and statutory authorities

Total budgetary authorities available for use increased by $127.8 million (2.6%) compared to the previous fiscal year:

• Vote 1 authorities increased by $12.3 million
• Vote 20 authorities increased by $113.5 million
• Statutory authorities increased by $2 million

The following table provides a detailed explanation of these changes.

2.2 Statement of departmental budgetary expenditures by standard object

The year-to-date budgetary expenditures as of December 31, 2025, decreased by $255.9 million (7.6%) compared to the same period in the previous year:

• Vote 1 expenditures decreased by $4.7 million
• Vote 20 expenditures increased by $234.2 million
• Statutory payments decreased by $485.4 million

For the fiscal quarter ended December 31, 2025, budgetary expenditures decreased by $47.6 million (4.4%) compared to the same period in the previous year:

• Vote 1 expenditures increased by $0.8 million
• Vote 20 expenditures increased by $90.2 million
• Statutory payments decreased by $138.6 million

The following table provides a detailed explanation of these changes by vote and by standard object.

3.1 Financial management

TBS faces financial risks in achieving its expected results within current and projected authorities, driven by competing departmental priorities and a constrained fiscal environment, including spending reductions introduced under Budget 2023’s Phase 1 of the Responsible Government Spending initiative and Budget 2025’s Comprehensive Expenditure Review starting in 2026–27. Reliance on internal charging agreements with other government departments also poses a risk if contributions decline amid fiscal constraints. Mitigating these risks will require ongoing financial forecasting and strong governance to ensure effective prioritization and resource allocation.

3.2 Personnel funding

TBS faces financial risks because a portion of its personnel funding is temporary, while most of its workforce is permanent. Under reduced funding conditions, careful management of staffing levels will be required. To better manage the risks associated with personnel funding and maintain effective program delivery, TBS will refocus core business functions and modernize organizational structures and processes to enhance agility and efficiency by:

• reorienting initiatives that have achieved their intended goals or where opportunities exist to integrate efforts more effectively
• transforming internal operations by consolidating work units, rightsizing management and administrative support, and modernizing key processes
• optimizing automation to drive consistency, scalability and service excellence across the organization

3.3 Information technology

Given the costs associated with existing technical debt, such as maintenance, upgrades and system replacements, as well as the need for robust cyber security measures, there is a risk that TBS may not be effectively prepared to adopt and integrate emerging tools, including artificial intelligence, to drive operational efficiencies. Gaps in organizational readiness, infrastructure or workforce capabilities could limit the department’s ability to fully benefit from these technologies. To mitigate these risks, TBS will use established financial planning processes and governance frameworks to prioritize critical information technology requirements, including long-term investments to modernize and update systems.

4.1 Operations and programs

Budget 2025 introduced measures to create a more efficient and effective government. As part of the Comprehensive Expenditure Review, TBS will refocus on its core business functions and modernize its organizational structure and processes to enhance agility and efficiency, resulting in spending reductions of $28.9 million in 2026–27, $38.5 million in 2027–28, and $57.8 million annually starting in 2028–29.

4.2 Personnel

Lucie Seguin was appointed Assistant Secretary of the Government Operations Sector effective October 23, 2025.