Evidence of meeting #10 for Public Accounts in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was federal.

A video is available from Parliament.

On the agenda

Members speaking

Before the committee

Hogan  Auditor General of Canada, Office of the Auditor General
Wheeler  Principal, Office of the Auditor General
Lombardi  Principal, Office of the Auditor General

10:10 a.m.

Conservative

The Chair Conservative John Williamson

I call this meeting to order.

Welcome to meeting number 10 of the House of Commons Standing Committee on Public Accounts.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room, and there might be some joining us remotely.

Pursuant to Standing Order 108(3)(g), the committee is commencing its study of reports 5 to 10 of the Auditor General of Canada for the year 2025. These reports were referred to the committee today, October 21, 2025.

I'd now like to welcome our witnesses, all from the Office of the Auditor General.

We have Karen Hogan, Auditor General of Canada. It's nice to see you and your team here, whom I will introduce.

We have Andrew Hayes, deputy auditor general; Jean Goulet, principal; Gabriel Lombardi, principal; Nicholas Swales, principal; Glenn Wheeler, principal; and Mathieu Lequain, director.

Welcome, all. Thank you for coming in.

This meeting is now in public. It is the Standing Committee on Public Accounts. We're going to try to have three rounds this morning, each of approximately 20 to 25 minutes. The first consists of three members, who will have six minutes each.

Monsieur Deltell, I understand that you'll lead us off and that you'll be splitting your time. I will look for your signal to let me know when you'll be splitting your time, or do you want me to interrupt you after three minutes?

You'll let me know. Very good.

Mr. Deltell, you have the floor for six minutes.

10:10 a.m.

Conservative

Gérard Deltell Conservative Louis-Saint-Laurent—Akiawenhrahk, QC

Thank you very much, Mr. Chair.

I'd like to welcome all the witnesses.

10:10 a.m.

Conservative

The Chair Conservative John Williamson

Pardon me. I'm getting ahead of myself here. I'm so excited.

Ms. Hogan, you should have interrupted me. You know these proceedings better than I do. I am sorry.

Ms. Hogan, I understand that you have an opening statement for us.

Karen Hogan Auditor General of Canada, Office of the Auditor General

I do have opening remarks. The member will have to wait a few minutes.

Thank you, Mr. Chair.

I would like to begin by recognizing that we are meeting on the traditional unceded territory of the Algonquin Anishinabe people. I am grateful for the contributions and stewardship of indigenous peoples across Canada, who for generations have cared for the lands they call home.

We are here to discuss the findings of six reports that my office released this morning. This release also includes a message to mark the halfway point in my 10-year mandate as Auditor General of Canada.

I will begin with our audit of the Canada Revenue Agency’s contact centres, and whether they provide Canadians with timely and accurate information about personal taxes, benefits and business taxes.

The Canada Revenue Agency has a duty to help individuals and businesses meet their tax obligations and access benefits. I am concerned that in spite of a new call system and other improvements, Canadians are still waiting too long to get answers to their tax questions.

During the last fiscal year, callers choosing to speak with an agent waited on average 31 minutes, twice as long as the agency’s service standard of 15 minutes. When callers did reach an agent, they were often provided with inaccurate information.

Auditors from my office placed calls to contact centres and asked general or non-account-specific questions. We found that agents' responses to individual tax questions were accurate only 17% of the time and that business tax or benefit questions were accurate just over half of the time.

To test the accuracy of agents' responses to account-specific questions, we reviewed a sample of recorded conversations. We found that the accuracy was much higher when questions pertained to specific accounts.

Turning now to our two audits of programs related to the Canadian Armed Forces, the first focused on whether the forces recruited and trained enough members to meet operational requirements. Between 2022 and 2025, the Canadian Armed Forces fell short of their target by about 4,700 recruits. Though the forces were able to attract thousands of applicants, only one in 13 started basic training.

The Canadian Armed Forces did not always know why applicants abandoned the recruitment process. Without this knowledge, the Canadian Forces are not able to determine what needs to be done differently to increase the number of successful candidates.

The armed forces also did not have sufficient basic training capacity to meet demand if the recruitment targets had been met. Challenges attracting and training enough highly skilled recruits to staff many occupations, such as pilots and ammunition technicians, could affect the army, navy and air force’s ability to respond to threats, emergencies or conflicts and accomplish their missions.

Our second audit related to Canada's military forces focused on housing. Overall, we found that National Defence did not manage living accommodations to meet the operational requirements or respond to the needs of the Canadian Armed Forces members and their families. National Defence did not have enough living spaces at the right locations, including quarters that met its own standards for living space per person. We also found that some buildings were in poor condition, lacking such basic amenities as safe drinking water and working toilets.

In addition, the Canadian Forces Housing Agency—which manages residential housing units on bases—did not plan to build enough new housing units to fill existing gaps. Canadian Armed Forces members can be required to move frequently, so it is important for their morale and well‑being that they can access affordable housing in good condition, with sufficient living space for themselves and their families.

I will now move on to the audit for examining whether the federal government had the tools in place to protect its IT networks and systems against cyber-attacks. While the government did have a comprehensive strategy, there were gaps in some areas, such as cybersecurity defence services and responses during active cyber-attacks.

Next, 58% of federal organizations are not required to use the cybersecurity defences offered by Shared Services Canada and Communications Security Establishment Canada. Though some have opted in, this inconsistent use of services has resulted in a fragmented cybersecurity landscape that could undermine the federal government's ability to protect critical information and manage risks.

We also found that coordination among the Treasury Board of Canada Secretariat, Communications Security Establishment Canada and Shared Services Canada was too slow during active cyber-attacks. Slow coordination and limited information sharing during a recent major attack delayed the government's response, extending the time during which the attacker had access to public servants' personal information.

Malicious actions, external events and attacks involving the Canadian government's digital systems are becoming more sophisticated and frequent.

A coordinated and comprehensive approach to the government's cybersecurity position, improved collaboration and an up-to-date inventory of IT assets are critical to protecting Canadians' information and maintaining their trust in government IT systems.

Let's move on to the audit that looked at whether Employment and Social Development Canada fulfilled its responsibilities to support early learning and child care across Canada.

The federal government committed $35 billion to provinces, territories and indigenous partners over five years to support the creation of affordable and accessible child care spaces. As of March 2024, parents' out-of-pocket fees for federally funded spaces had been reduced to an average of about $16.50 a day.

Federal funding also supported the creation of approximately 112,000 new child care spaces as of March 2024. However, with less than two years left, there is a risk that the goal of creating 250,000 new spaces will not be met.

Important progress has been made in bringing down child care costs to parents. However, Employment and Social Development Canada needs to collect consistent and comparable data across the country to track the program's overall performance, inform future decisions and support Canadian families.

In our last audit released today, we followed up on Indigenous Services Canada's progress to address 34 recommendations from six audits conducted since 2015.

Programs to first nations are a decades-long concern for my office. Despite the almost doubling Indigenous Service Canada's spending on programs over the last five years, we found unsatisfactory progress on more than half of recommendations to address long-standing issues critical to the health and well-being of first nations communities. Twenty years after my office first identified concerns with drinking water quality in first nations communities, 35 long-term advisories remain in effect, including nine that have been in place for a decade or longer.

Our audit also found that there are fewer emergency services agreements in place today than there were in 2022. These agreements are essential for timely, coordinated responses to events such as wildfires and floods, while mitigating the disruption to people's lives and damage to critical infrastructure.

Sustained focus at Indigenous Services Canada to rethink how it delivers programs, while collaborating with first nations to improve their capacity, is an important step in resolving the persistent issues, improving outcomes and advancing reconciliation.

As I look ahead to the second half of my mandate, my unwavering goal remains that my office will continue to provide non-partisan, fact-based information to parliamentarians and the federal public service so that they can more easily adjust and best direct resources towards outcomes that serve the diverse needs of Canada's people. The intention is to be constructive and focused on the pursuit of excellence and accountability in the public service. This has been the focus of my first five years leading the Office of the Auditor General of Canada, and it will remain my focus for the next five.

Thank you.

10:20 a.m.

Conservative

The Chair Conservative John Williamson

Very good. Thank you for those opening remarks. I apologize again for skipping over you, particularly on your fifth anniversary. I think congratulations are in order.

I will now begin with Mr. Deltell, as I originally explained, for six minutes.

10:20 a.m.

Conservative

Gérard Deltell Conservative Louis-Saint-Laurent—Akiawenhrahk, QC

Mr. Chair, I'd like to remind you that I'll be sharing my time with Mrs. Kusie.

Good morning, Mr. Chair, colleagues and Ms. Hogan.

Ms. Hogan, thank you very much for that very well done half-mandate. I wish you all the best in the future and thank you for your service to Canada.

All the Canadians listening to us right now know that they have to pay taxes, and honest Canadians don't have a problem with that. A problem arises only when they're harassed by the Canada Revenue Agency, or CRA, or even worse, when the CRA doesn't diligently carry out its core work, which is to properly serve Canadians and give them correct information.

The Auditor General's report today is scathing when it comes to the mediocre service of the CRA. Wait times have doubled over the past year, and the service standard for wait times has been met in only 5% of cases. As for the quality of the information provided, callers receive the wrong information four times out of five. Only 17% of the responses to personal income tax questions were correct.

Auditor General, your report explains how we got to this point. You write that the CRA places greater importance on respect for work schedules and breaks than on the accuracy and completeness of the information provided.

How is it that an organization as important to the country as the Canada Revenue Agency has become so mediocre?

10:25 a.m.

Auditor General of Canada, Office of the Auditor General

Karen Hogan

Indeed, the accuracy of the information provided accounts for less than 10% of the agents' performance appraisals. I don't think that fosters an environment conducive to delivering quality services.

I understand the frustration of Canadians who call the Canada Revenue Agency and wait a long time. In a system where taxpayers are responsible for submitting accurate information on their tax return and sending it in on time, they should be able to reach the Canada Revenue Agency and get accurate information within a reasonable time frame.

That means that there's a lot of room for improvement at the agency.

10:25 a.m.

Conservative

Gérard Deltell Conservative Louis-Saint-Laurent—Akiawenhrahk, QC

I agree with you that there's a lot of room for improvement at the Canada Revenue Agency, especially since the value of the contract for its telephony system has gone from $50 million to $190 million.

In one of your statements, you said, “I am concerned that in spite of a new telephony system and other improvements, Canadians are still waiting too long to get answers to their tax questions.”

In short, you don't think that what the agency tried to do to improve the situation was successful.

10:25 a.m.

Auditor General of Canada, Office of the Auditor General

Karen Hogan

Indeed, only 18% of calls to the Canada Revenue Agency were answered by an agent within 15 minutes or less, which is the service standard established by the agency. The problem isn't only the number of agents available, but also the tools they use. We made a number of recommendations to improve the tools agents use so that call taking is more efficient.

I have to say that I found so many red flags about the telephony contract for the call centres, which is managed by Shared Services Canada, that I decided to start an audit on that contract's management. I hope to finish it in 2026.

However, regarding the audit that we're discussing today, our goal was to check whether the Canada Revenue Agency was providing accurate information within a reasonable time frame. We found that there were a lot of improvements to be made in terms of accuracy and timeliness.

10:25 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

Well, we've learned that there are three certain things in life today: death, taxes and that you will wait on hold when you call the CRA. It's another damning report that Canadians continue to pay more and get less.

The average wait time is 31 minutes. The service standard of 15 minutes is met only 18% of the time, despite a 2017 effort by CRA to block calls: 8.6 million calls were deflected and individuals did not have an opportunity to speak to an agent. As far as accuracy is concerned, accurate information was given only 54% of the time, and 17% of the time relative to tax-specific questions. The priority for the CRA is taking breaks, in that it was shown that the CRA placed greater importance on how closely they adhered to their schedule, for their shifts and breaks, than the “accuracy and completeness” of the calls that were provided. In one call recording, after nine minutes the agent remarked that the personal information authentication was taking too long for a 90-year-old caller, who was having difficulty finding and recalling the correct answers.

Why should Canadians tolerate this unacceptable service?

10:25 a.m.

Auditor General of Canada, Office of the Auditor General

Karen Hogan

I think there are lots of opportunities within the Canada Revenue Agency to improve how they provide service to Canadians. Having only about 10% of an agent's annual performance review based on the accuracy and completeness of their responses, in my mind, does not encourage a good culture in which accuracy and completeness are top of mind.

In Canada, our tax system is a voluntary one, and Canadians are expected to provide their tax returns on time, with accurate information. I think, in return, they should expect the Canada Revenue Agency to be available in a timely fashion and to provide them with accurate information. What we're seeing is that this is not the case. This was meant to be a follow-up to see whether things have improved since 2017. I would say that, if you're calling about a general question, they haven't gotten better. However, if you are calling about specific things about your account, you will get an accurate answer.

However, the My Account creation was meant to take calls away from the call centre, and a majority of the calls received by the call centre right now are trying to access My Account, so I think there are a lot of opportunities to make this more efficient for Canadian taxpayers.

10:30 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

Thank you.

The contract with IBM quadrupled, from $50 million over 10 years to $190 million. When asked about it, neither Shared Services Canada nor the Canada Revenue Agency could confirm whether the invoice levels of activity, which were the basis for the charges invoiced to the agency, were accurate. We're seeing the same types of practices not being followed as we saw in arrive scam.

When will this government learn, and will Canadians ever get value for money?

10:30 a.m.

Auditor General of Canada, Office of the Auditor General

Karen Hogan

When we set out to do this audit, we were actually looking at the accuracy and timeliness of CRA's responses, but, obviously, we wanted to turn to whether or not the call centre was providing good value for money. When we looked at the contract, which started at $50 million and is now estimated to be valued at $190 million—it does represent services for three departments, so the Canada Revenue Agency is about 30% of that value—we found that invoices received very little scrutiny and, as you mentioned, Shared Services and the Canada Revenue Agency didn't verify the accuracy of what was being charged.

There were enough red flags here for me, and my inability to conclude on value for money is such that I will be starting an audit on the management of this contract, so that it will inform the future contract for call centre services that Shared Services Canada has just released.

10:30 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

I'm thrilled. Thank you.

10:30 a.m.

Conservative

The Chair Conservative John Williamson

Thank you very much, Ms. Kusie.

Up next is Mr. Osborne, please.

You have the floor for about six minutes.

Tom Osborne Liberal Cape Spear, NL

Thank you.

Congratulations, Ms. Hogan, on your five years. I look forward to your next five.

10:30 a.m.

Auditor General of Canada, Office of the Auditor General

Karen Hogan

Thank you.

Tom Osborne Liberal Cape Spear, NL

My first question is about the early learning and child care system. I do have an interest in this. When I was minister of education and early childhood development in Newfoundland, we reached an agreement with the federal government.

You raised a concern about whether or not the number of spaces can be created in the next two years. Just from personal experience, I know we went to $10 a day in Newfoundland and Labrador. That created not only the success of the program, but the challenge that, because it was more affordable, more people were signing up, which created a longer wait-list.

We also exponentially increased the number of seats available in training institutions for early childhood educators. It's a two-year program. You can't knit an early childhood educator overnight. Catching up with the number of educators required takes time. I checked back recently with the province. They've seen a huge increase in graduates, and that is expected to continue.

Did you look at that aspect when you raised concerns over the number of spaces that would be created over the next two years?

10:30 a.m.

Auditor General of Canada, Office of the Auditor General

Karen Hogan

You're correct; there is a trade-off. When you reduce the cost, the demand goes up, and then there's this ripple effect that impacts so many other areas of the industry.

The difficult part with the way this program is run is that education—in this case, early childhood education and care—is a provincial or territorial jurisdiction. All I can look at is what the federal government money is being used for and whether or not the federal government is receiving the information to show taxpayers that value for money was received.

When it comes to the additional spaces, a little less than half of the 250,000, which is the goal for this program, have been created, and there are just two years left to the five-year horizon. I do believe there is a risk that not all the spots will be created.

The federal government wasn't gathering information on whether or not new spots that were created had been occupied by parents. In fact, they had to turn to reports from Statistics Canada to find out whether or not parents were using those spots. What they found is that in many cases, parents said that the spots were not in their community, or they didn't meet their work schedule, or they didn't have the support that their children needed, if they had additional needs.

There's a real gap in information, and the federal government needs to do better to work together with the provinces and territories, so that Canada can really speak to the opportunities or the trade-offs of this program and then talk about the successes or not.

Tom Osborne Liberal Cape Spear, NL

Thank you.

My next question is on linking housing for our Canadian Armed Forces with recruitment. Lack of adequate housing may be a recruitment problem as well, if you're looking at them through the same lens.

In budget 2024, I think $1.6 billion was allocated for housing strategies for National Defence. Have you seen any progress on that? Should that investment in National Defence housing, that strategy that was announced in budget 2024, address some of the concerns that you've raised?

10:35 a.m.

Auditor General of Canada, Office of the Auditor General

Karen Hogan

I guess if I took a step back and talked about these two reports, I would tell you that National Defence isn't recruiting enough members to meet its needs. In fact, only one in 13 makes it to basic training, and there are thousands who apply every year. Is housing one of the concerns that they've raised? Occasionally it is, but I think it's the slowness of recruitment and many other issues.

Housing is a concern that was raised on retention of existing members. National Defence isn't managing its housing portfolio in a way that's going to meet its needs and also the needs of its members.

The increased budget was meant to fund a 20-year plan to build housing units and renovate other housing units. It has a really long horizon. It would be impossible for me to tell you today if it would be enough, but what I could tell you is that a lot of their plans and estimates are based on outdated information. They should start by at least updating that information and then incorporating the desire to recruit more in order to see whether or not they have enough budget to deal with the housing issues.

Tom Osborne Liberal Cape Spear, NL

Since your study, I know the government has announced a huge investment in our national defence, including increased wages, better benefits and addressing some of the concerns that our service men and women have addressed. That should help with recruitment.

I know that, at one of the recent meetings we had, the lieutenant-general and the deputy minister indicated that they had new recruitment strategies in place, as well. Do you see the increased budget and the recruitment strategies as addressing the concerns you've raised in your report?

10:35 a.m.

Auditor General of Canada, Office of the Auditor General

Karen Hogan

I think that increasing the salary of our Canadian Armed Forces will improve recruitment but also retention. Also, I do think that a recruitment strategy will help.

However, we identified other weaknesses that could help with recruitment. I think one of the places to start is to understand why more than half of the people who apply sort of abandon the recruitment process and no longer have contact with the Canadian Armed Forces. Until you understand why individuals are leaving the recruitment process, you can't make changes that will help address that.

Our report does highlight some changes that were made during the audit, but, again, it's too early to know the kind of impact that will have on recruitment.

Tom Osborne Liberal Cape Spear, NL

I appreciate that.

I think there is probably not an MP in the legislature who hasn't received calls about the slowness at CRA. I spoke with the secretary of state on that, and he indicated that there was a 100-day plan put in place.

From your perspective, can you talk about whether or not CRA's recent steps, such as increasing call capacity and expanding the digital services, address the gaps that were identified?

10:40 a.m.

Auditor General of Canada, Office of the Auditor General

Karen Hogan

Those two elements you raise, I think, are part of the concerns we've seen, but there are others. I believe that many of the call centre agents don't have the tools they need to actually respond to some of the questions they receive, and we made some recommendations around improving those tools.

I do think that making the evaluation of an agent more focused on the accuracy and completeness of their responses, versus adherence to schedules, would change the approach and indicate that the culture is one where the Canada Revenue Agency should provide accurate information.

There are many facets. I trust that the 100-day plan, as well as the responses to our recommendations, can only improve the situation for individuals trying to call the Canada Revenue Agency.