EVIDENCE

Standing Committee on Public Accounts NUMBER 010 1st SESSION 45th PARLIAMENT Tuesday, October 21, 2025 Le mardi 21 octobre 2025 Standing Committee on Public Accounts CANADA [Recorded by Electronic Apparatus] EVIDENCE October 21, 2025 Committee NUMBER 010 NUMBER 010 NUMÉRO 010 10 21 10 2025 2025/10/21 10:10:00 House Of Commons Comité permanent des comptes publics Standing Committee on Public Accounts PACP Chair John Williamson 1 45

(1010) [ Translation ]

The Chair (John Williamson (Saint John—St. Croix, CPC)) :

I call this meeting to order. Welcome to meeting number 10 of the House of Commons Standing Committee on Public Accounts. [ English ] 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. [ Translation ] 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. [ English ] 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. [ Translation ] Mr. Deltell, you have the floor for six minutes.

Gérard Deltell (Louis-Saint-Laurent—Akiawenhrahk, CPC) :

Thank you very much, Mr. Chair. I'd like to welcome all the witnesses.

[ English ]

The Chair :

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. [ Translation ] 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. [ English ] 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. (1015) [ Translation ] 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. [ English ] 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. [ Translation ] 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. [ English ] 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. [ Translation ] 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. (1020) [ English ] 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. [ Translation ] 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. [ English ] 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.

The Chair :

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.

[ Translation ]

Gérard Deltell :

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?

(1025) 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.

Gérard Deltell :

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.

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.

[ English ]

Stephanie Kusie (Calgary Midnapore, CPC) :

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?

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.

(1030) Stephanie Kusie :

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?

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.

Stephanie Kusie :

I'm thrilled. Thank you.

The Chair :

Thank you very much, Ms. Kusie. Up next is Mr. Osborne, please. You have the floor for about six minutes.

Tom Osborne (Cape Spear, Lib.) :

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

Karen Hogan :

Thank you.

Tom Osborne :

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?

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.

(1035) Tom Osborne :

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?

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 :

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?

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 :

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?

(1040) 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.

The Chair :

Thank you. That is the time, Mr. Osborne, and a little bit extra, as well. [ Translation ] Mr. Lemire, you have the floor for six minutes.

Sébastien Lemire (Abitibi—Témiscamingue, BQ) :

Thank you, Mr. Chair. Thank you very much, Ms. Hogan, and congratulations. I also want to thank your entire hard-working team. Five years is a nice anniversary. However, it also means that we may only have five years left with you, which is less good news. As usual, your report is compelling. I want to point out that your report mentions the very troubling fact that Canada Revenue Agency employees were able to provide accurate information to clients in only 83% of cases.

You quite rightly referred to a performance appraisal done in an agency office that indicates that the suggested pass mark, which is 60%, can be given to an employee who arrives on time, takes their breaks at the right time and finishes calls at the right time, even if they have given someone incorrect information that will impact that person. The employee may get a score of 60% or more because their behaviour is appropriate and they comply with policies and procedures. However, misinformation concerns the Canada Revenue Agency and can have serious consequences for a Quebecker or Canadian.

There's something very shocking about that. You also raised the issue of inaccuracy in 2017. How can we explain that, eight years later, the situation has not changed?

Karen Hogan :

I will qualify my answer. The situation has changed, depending on the type of question put to the Canada Revenue Agency. If someone wants general information on taxation, for example, whether for an individual or a business, they get accurate information only 17% of the time, or about half that percentage in the case of a business. However, whenever someone asks for information about a particular account or environment, such as whether a return has been processed or when a benefit will be paid, they get accurate information more than 80% of the time.

You have to take into account the reason for the request for information. Things have improved, but there's still a lot of room for improvement. When someone contacts the agency for tax-related information, they may wait a long time and get inaccurate information. Therefore, there is still a lot of room for improvement.

Sébastien Lemire :

Canada has two official languages. I understand that you made some test calls. Have you noticed a difference between English and French in terms of the speed, quality or accuracy of answers?

Karen Hogan :

Yes, we made test calls to verify the accuracy of answers to general questions that did not concern a specific taxpayer's account. We did not see a difference between English and French, whether in terms of wait times or the accuracy and completeness of responses.

Sébastien Lemire :

We see that, once again, the system was designed by IBM Canada. That's the same firm that was involved in the Phoenix benefits delivery modernization and many other programs. Therefore, you've often conducted investigations related to systems created by IBM. There's also GC Strategies, the company involved in the ArriveCAN scandal, and an audit of SAAQclic was launched in Quebec. Do you think it's time to investigate the use of these types of contracts and companies, which continue to cause problems? Should we set up a commission of inquiry into the use of such firms, particularly IBM?

(1045) Karen Hogan :

It's not up to me to decide to set up a commission of inquiry. However, we found many red flags in the management of the contract for the communications centre telephone system, including insufficient verification of invoices. I'm undertaking an audit on the management of that contract in particular, and I intend to report to Parliament about it in 2026.

Sébastien Lemire :

The government seems to be looking at AI as a solution to be more efficient. You mentioned that the CRA chatbot agent only answered two out of six questions correctly. Is that a concern?

Karen Hogan :

That's right, AI tools did provide more accurate answers than Charlie, the CRA chatbot agent. However, two out of six correct answers is a 33% success rate, which is better than what people can expect if they call in to ask general questions. That said, I encourage the government to improve all of its communication tools. Some people want to talk to an officer, while others are very happy to use automated tools. As I mentioned earlier, a lot of service improvements need to be made.

Sébastien Lemire :

In your report, you raise the case of a 90-year-old person who had trouble authenticating their identity. This happens to seniors, and there's no ideal solution, but would it be possible to set up a dedicated phone line for seniors or offer them in-person services to direct them to the right place, based on their needs? That would be a good way to adapt to a clientele that is often vulnerable to new technologies.

Karen Hogan :

We didn't address that in our assessment, but we looked at the phone lines for the northern region and for the three territories, and we found that calls using a northern area code were being prioritized and that the service standard was being met. I don't know how that could be applied to seniors, but it's important to mention that, although it's a long step, multifactor authentication is essential to protect taxpayers' personal information.

Sébastien Lemire :

Thank you very much.

[ English ]

The Chair :

We'll begin our second round, which will consist of members asking questions for between two and a half minutes and five minutes. We'll turn now to Ms. Goodridge. You have the floor for five minutes.

Laila Goodridge (Fort McMurray—Cold Lake, CPC) :

Thank you, Mr. Chair. Thank you to the team for being here. Congratulations, Ms. Hogan, on your five-year anniversary. In your report on child care, you say that the Liberals have fulfilled their responsibilities. When it comes to flexibility, there's no metric. In your report, you also state that families outside of the standard hours are struggling to find care. I'm just wondering how you can say they are meeting their responsibilities.

Karen Hogan :

I said that the federal funding has led to improvements in early childhood care and learning, but there is still time left to decide whether all the responsibilities have been met. The federal funding has helped reduce the cost of child care. Five provinces and three territories are already at $10 a day, which is ahead of the deadline of 2026. Additional spots have been created, but there's still a lot of work left to be done there. It was impossible for me to evaluate other areas, whether it came to accessibility or the quality of child care. While the funding has helped improve the situation, there's still room for improvement.

Laila Goodridge :

Do we have any idea how many kids are still without care?

Karen Hogan :

All I know is what the federal government received from the provinces and territories. I can highlight what Statistics Canada would tell you. In 2021, there were 2.2 million children aged five years and under, and more than half of them were in child care. That was at an average cost of over $30 a day. The fact that 112,000 spots have been created, which is less than half of the target, is why I raised the risk that filling the 250,000 spots or creating those spots might be very difficult to achieve.

(1050) Laila Goodridge :

Do you know how many of the new spots are actually filled?

Karen Hogan :

That's actually a piece of information that the federal government isn't gathering from the provinces and territories. In fact, they turned to another Statistics Canada survey to understand why parents may not be taking up the new spots.

Laila Goodridge :

Part of why I asked this is that the Auditor General of Ontario recently studied this and found that 27% of spots weren't being filled. That's very concerning to me. We are spending a lot of money. The Liberals keep boasting about how much money is being spent. We don't know how many kids are actually seeing the benefits of this.

Karen Hogan :

You raised something that I've been working on with some of my colleagues in the provincial auditors general offices. We felt that it was important to try to coordinate some of our work on topics exactly like this, where there's a lot of federal funding, but a lot of the heavy lifting happens in the provinces and territories. There will be two other provinces looking at this as well. I think it's important so that you can see the picture from the start to the finish: where the funding comes from and then how it actually happens.

Laila Goodridge :

Is there any standard information being collected across the provinces on this?

Karen Hogan :

There is some information being collected, but the government allowed every province and territory to provide it in whatever format they wanted. There's flexibility in the agreements. We recommended that to make sure they get consistent and standardized information.

Laila Goodridge :

I'm going to shift gears over to the first nations report. I found the information in that incredibly troubling. As the member of Parliament for Fort McMurray—Cold Lake, wildfire is something that is very familiar to me. You stated that not all provinces have wildfire agreements. Which provinces have wildfire agreements?

Karen Hogan :

There are currently five provinces that have wildfire agreements: British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. I think it's important to note that it doesn't mean that every first nation community in that province is signed on to that service agreement.

Laila Goodridge :

In my home province of Alberta, how many first nations are not covered under that agreement?

Karen Hogan :

I don't have that specific level of information. I'm going to see if perhaps Glenn can add something there.

Glenn Wheeler (Principal, Office of the Auditor General) :

In the province of Alberta, 25 of the 48 first nations are not covered by the agreement.

Laila Goodridge :

That's half.

Glenn Wheeler :

It's about half, yes.

Laila Goodridge :

Half aren't covered under the agreement, and the Government of Canada, the Liberals, only have agreements with half of the provinces. How many territories are covered?

Karen Hogan :

There are no territories that have agreements.

Laila Goodridge :

This is an abject failure.

Karen Hogan :

This is why we concluded that the progress on our recommendations from a 2022 report was unsatisfactory. There is a lot of work. I think that Indigenous Services Canada really needs to rethink how they approach engaging and working with first nations.

Laila Goodridge :

They're trying to get to these tripartite agreements between the province, the nations and the federal government. How many of those exist? It was announced in the 2019 budget.

Karen Hogan :

In 2022, we actually looked at agreements, and there were six emergency service agreements that had been put in place. None of them were tripartite. They were just moving to tripartite. They were dual-party agreements.

Laila Goodridge :

It's six years post-announcement in the budget, and there are still zero.

Karen Hogan :

Even more concerning is that there are fewer service agreements between 2022 and now. I think a service agreement provides clarity to first nations communities on what to expect in an emergency. Even if you're working toward something new, you could renew contracts that expire. You could put something in place to provide some clarity and certainty to first nations.

The Chair :

Thank you. That is the time, I'm afraid, Ms. Goodridge. Up next is Ms. Yip for five minutes.

Jean Yip (Scarborough—Agincourt, Lib.) :

Thank you, Chair. Congratulations to you and your whole team on this five-year milestone. What do you feel is your most significant impact?

Karen Hogan :

I have to admit that I don't think I was expecting that question today. Over the last five years, we've really changed within the organization and have tried to deliver reports that are easier for people to digest. Hopefully, you actually want to read them. They're not 8,000 or 10,000 words. We are covering topics that I think are so important to Canadians all across the country. We try to look at programs that cover masses, but then we also think about the population that needs it the most, those who are the furthest behind, and hopefully it would encourage the government to bring them forward first.

I feel that I have a lot left to accomplish in the next five years. I hope that Parliament will support me, and studying our reports is one of the best ways you can do that.

(1055) Jean Yip :

That's great. Now I'm going to just dive right in. We've heard from our constituents across the country that Canadians don't just want faster phone service; they want easier ways to resolve issues without needing to call the CRA. How does the agency's shift towards digital services, like extended chat hours and new account recovery tools, align with your recommendations for long-term service improvements?

Karen Hogan :

I think they are aligned. There are many individuals who want to speak with an agent, and then there are many individuals who are quite happy doing the self-service option. There's an opportunity to improve Charlie, the chatbot, as we saw that only two in six questions we asked—which were general in nature—were accurately answered, when other publicly available artificial intelligence tools were giving better answers. I think that our recommendation around improving tools....

It's not just automated tools but also the tools that agents have, so that once you reach an agent, the call can be more efficient and effective. We found that, on average, a call lasted about 17 minutes, but 30% of that time was spent on hold and waiting for someone to find an answer. Therefore, there are a lot of opportunities to improve some of the tools, and that's leveraging technology to make things better. I think the final recommendation we made was to divert or dedicate the calls that are about trying to access My Account.

My Account is a portal that was created so that everyone can self-serve when it comes to the Canada Revenue Agency. However, it's occupying the majority of the calls made to the call centre. If you could split those up and have some real technical support but then expertise on answering tax questions, I think it would improve the service.

Jean Yip :

I'd like to turn to the cybersecurity report. Why is it that 119 out of 204 federal organizations are not required to use the cybersecurity services offered by Shared Services Canada?

Karen Hogan :

I think it's important to say that there are some effective cyber-defence tools out there, and the cyber-defence sensors are one of them. It is a policy choice over which federal organizations are required to use the services offered by Shared Services Canada. Out of the 119 that are not required, some have voluntarily adopted some of the tools. They are known to be very effective. However, when we asked them why they don't use the tools, they cited a few reasons, one being a potential impact on their independence.

For example, if they were a Crown corporation using a tool offered by the government, it could impede their independence. They felt that there was limited ability to customize these tools, and they were also concerned about the maintenance and support that might be offered from other organizations. Now, I can tell you that I'm one of the most independent offices in the federal government, and while I am responsible for ensuring that I have good cyber-defences, I have adopted the cyber-defence sensors, because they are a layer over and above what I have already put into place.

I think that Canadians would expect that the federal government would do everything it could to protect their information and the government's information.

Jean Yip :

Given that some of the Crown corporations may feel like they want to protect themselves, how does that impact the coordination, then?

Karen Hogan :

I think that's one of the biggest gaps that we identified. While there are tools in place, there are some important gaps that exist in defences. Also, when not everyone in the federal family is using all the same cyber-defences, you have a potential vulnerability or weakness. In fact, the more people who contribute to feeding information about potential attacks, the more the cyber-defences of the Government of Canada are bolstered. I think something needs to be done to fix that fragmented approach.

Jean Yip :

Okay.

The Chair :

Thank you. Do you have a follow-up, Ms. Yip? If you don't, I can come back to any members later.

Jean Yip :

You can come back.

The Chair :

Thank you. Your time is up, but if you had one, I was going to let you go ahead. [ Translation ] Mr. Lemire, it's your turn to take the floor. You have two and a half minutes.

Sébastien Lemire :

Thank you, Mr. Chair. Madam Auditor General, as the Bloc Québécois has often said, we often see the best results when money is transferred directly to the provinces and jurisdictions are respected. With the child care program, Quebec led the charge. Obviously, as was mentioned, the federal program was inspired by what Pauline Marois did. Quebec met expectations. It was able to create more spaces than its demographic weight with the money transferred to it, namely 20,000 out of 110,000 spaces. In this case, it was a no-strings transfer, which we don't often see at the federal level. Was the program basically well managed as a result of this no-strings transfer?

(1100) Karen Hogan :

It was somewhat difficult for us to validate the results of the money transferred to Quebec because the terms of the agreement were unique compared to those of other provinces and territories. Quebec already offered child care services at $10 per day. Furthermore, all agreements with the provinces stipulated that the latter had the choice of deciding how the funding would be distributed and used within the province to improve access to affordable child care services.

I would point out that one of our recommendations is to use the terms of the agreements to allow the federal government to collect comparable information across the country, including Quebec. By comparing results and obtaining an overall picture of the situation, the federal government would be able to demonstrate that the money spent is truly an added value for Canadians. At this point, it is difficult to determine.

Sébastien Lemire :

We can see that federal bureaucracy has exploded in many programs. This is the case, among others, at the Canada Revenue Agency. When money is transferred to the provinces and territories, we see that they are able to provide the agreed-upon services. Do you think the government should consider this approach more, particularly for the Canada Mortgage and Housing Corporation’s housing programs, or even those of first nations, for which you have a report on service programs?

You mentioned housing, but among the obstacles you cited were often insufficient support to strengthen first nations’ capacity to deliver programs, as well as a passive and compartmentalized approach to supporting first nations. How can we ensure that funds are transferred so that services are provided as close as possible to citizens, which is often more effective?

Karen Hogan :

This is a complex issue. I have not looked at how to improve this across the country. I have really looked at first nations programs, as you mentioned. In general, when federal money is transferred to a province or territory, there should still be accountability so that the federal government can demonstrate to taxpayers that the money has been spent appropriately. I think this is a partnership that different levels of government need to establish and agree on. An unconditional approach is not always the best approach. However, it is necessary to consult with first nations and understand their reality.

At this time, the approach being taken does not take into account their unique situation. In my opinion, in order to move forward with reconciliation, the government must change its approach.

Sébastien Lemire :

Thank you.

The Chair :

Thank you very much. [ English ] Up next is Mr. Kuruc. You have the floor for five minutes, please.

Ned Kuruc (Hamilton East—Stoney Creek, CPC) :

Hello, and I would like to say congratulations on your first five years, Ms. Hogan. Hopefully your next five will be as good as your first. I'd like to start on the recruiting for the Canadian military. In exhibit 2, we see that out of 191,000 applicants, 103,000 were dropped—that's 54% of the total applicants—and only one in 13 applicants completed basic training. Your report said that the CAF doesn't know why these applicants were dropped. Why aren't they obtaining that data?

Karen Hogan :

That's an excellent question. We really wanted to know why they were falling off at certain points in the process, and the goal of our audit was to try to figure out how to help them improve or identify if there had been bottlenecks. I think one reason might be the time delay. The standard is supposed to be to treat an application within about 100 to 150 days, and we saw that it was almost twice as long. I would imagine that people—as they do with any job they apply to—abandon that pursuit because they find another employment.

Ned Kuruc :

I did find that, of the 191,000, almost 15,000 came on board, but that didn't meet the target. We still have a gap of 4,700. That is particularly scary because our CAF isn't equipped. What does it mean for our armed forces if we have a gap of 4,700 personnel?

(1105) Karen Hogan :

You're right. During the period of our audit, only one in 13 people who applied ended up starting basic training. I think it's important. You highlighted exhibit 2. There's other information in there that talks about over 50,000 applications that are still in the pipeline and being treated. That's why I think it's important for National Defence to figure out why people are dropping off. You can't make changes to your process if you don't know why people are abandoning it.

Ned Kuruc :

Thank you. I'd like to move on to the other military report. It's with regard to housing Canadian Armed Forces members. Your report shows that National Defence failed to meet housing needs. We're at least 5,200 units short. The ones that we do have are outdated spaces with no Wi-Fi. Some don't even have functioning sanitary waste systems. We also have stories that members are having to couch-surf. I think the low point is an

article that came out in 2022 that said they were being advised to go to Habitat for Humanity to find housing. I find that concerning. Do you want to elaborate on that?

Karen Hogan :

National Defence is not managing their housing in a way that will meet their needs or the needs of their members at all. I think what was concerning for me was that we saw the poor condition of so many housing units. I think you and I would not want to live in them. We shouldn't expect our Canadian Armed Forces members to live in them.

Ned Kuruc :

I think they said they were 60 years old, on average.

Karen Hogan :

There are two types of buildings. There are quarters, which are meant for basic training and temporary or transient housing. They're not supposed to be for the long term, although some people are living in those long-term. Then there are residential units, houses that are unfurnished. Some of the quarters are over 60 years old. One was built in 1930. When maintenance isn't being done—we saw that in about 25% of the cases regular inspections aren't being done—you don't know the needs for maintenance. That results in housing that's in poor condition. As you mentioned, we saw in buildings a lack of safe or potable water to drink, toilets that didn't flush and exterior walls that needed repair.

Ned Kuruc :

Do we have a number on how many new units were built since the audit?

Karen Hogan :

I don't have that number handy. What I can tell you is that over the audit period, there has been reduction in units available. It's clear that the plan needs to be adjusted in order to meet the needs. They need to consider more up-to-date information than what they're using in their plan, considering they want to recruit more than they currently have on the force.

Ned Kuruc :

I see also that 3,800 units will be built over the next 20 years. In response to this, we see that a friend of the Prime Minister , an RBC banker, has been appointed to this portfolio at close to $700,000 a year. My question is this: Is that what we need, or do the ministers just need to prioritize the Canadian military for the sake of our security and sovereignty and do their job?

Karen Hogan :

I think you're talking about the appointment to the procurement agency for National Defence. They would not be dealing with the building of housing units. The Canadian Forces Housing Agency is a special operating agency that deals with the building of units. They did receive $2.2 billion to fund a plan over 19 years. It's really too early to know whether or not that will be enough. I would encourage, as I have in other reports with National Defence, that they update their estimates on a regular basis with accurate information so that they have a better picture of what they need going forward.

The Chair :

Thank you very much. Up next is Ms. Tesser Derksen. You have the floor for five minutes, please.

Kristina Tesser Derksen (Milton East—Halton Hills South, Lib.) :

Thank you very much, Mr. Chair. Thanks so much to the Auditor General and her team. Congratulations on your halfway point. I don't know whether to ask whether it was faster than you anticipated or much longer. Okay, it went faster. That means the next five years will go even more quickly. I want to start by talking about the child care report. This one touches home for me. I'm the mother of four children. They're older now, but I paid a lot of money in child care while I was going to school and working. I know the impact it has on Canadian families. I'm sure many of us in this room do.

Your report noted that overall, child care has become more affordable, in part due to federal funding. The $10-per-day child care goal has been met in five provinces, I believe, and the three territories as well. Do you have any idea, or can you speculate on, what the holdup is in the other half of those provinces that have yet to meet that goal?

Karen Hogan :

I couldn't speculate. I guess what I would tell you is that you're right that five provinces—Quebec, Newfoundland, Manitoba, Saskatchewan and P.E.I—have already reached the $10 per day. All three territories have as well. Some of them already had $10 a day before this all started. I think that's important to point out. I would perhaps point you to the Auditor General of Ontario's report, who looked at the results in Ontario, to get some more specific information on a province. It's clear that it takes the co-operation and funding from multiple layers of government and also parents.

I think what's concerning here is that many provinces have flagged the sustainability of this going forward. That's why we've recommended that the government needs to act now to get more comparable and comprehensive information across the country before they start making future funding decisions, or as they're making those future funding decisions, so that they can be well informed.

(1110) Kristina Tesser Derksen :

Yes, I noted that your report mentioned a lack of information due to uncertainty in provincial and territorial plans. That was an objective of the funding agreements, I believe. Is that right?

Karen Hogan :

The funding agreements had a few objectives. It was meant to improve the affordability of spaces and to improve the access, but it was also to look at the quality and the inclusive nature. In some of those areas, like access and quality, all the government did was look at plans. It's really difficult for me to know whether or not the funding is actually meeting its intended purposes, because the government can't say whether it is. That's why it's not just about missing information; it's about the right information, so you can speak to outcomes.

It's one thing to say that child care individuals are certified, but are they following training? That would be the next logical step. Some of that information is missing, to be able to speak to quality and access.

Kristina Tesser Derksen :

Since it's actually an objective in the funding agreement, is it a positive onus on the government to enforce the collection of that data, or is it something the provinces are supposed to be reporting regularly on their own?

Karen Hogan :

I think it's a joint onus. The provinces have signed on to a funding agreement and have agreed that they would make regular reporting, but then the onus is also on the federal government to make sure that reporting is comprehensive and accurate. For example, we saw good controls. Funding was withheld or the next tranche of funding was withheld when reports hadn't been received. Once they were received, the money then flowed to the provinces. What was concerning was the content of that.

For example, in one case, it talked about child care spaces for individuals age six and over, when this was supposed to fund five and under. It's just some of that accuracy. That onus is on the federal government, to make sure that the money is being used as intended.

Kristina Tesser Derksen :

The quality of the information that was being provided wasn't necessarily what we should have had. Do you have any ideas for how we can improve gathering that data and information? Is it more policy-based or culture-based?

Karen Hogan :

The existing funding agreements actually have clauses that call for the sharing of information. I think it's about sitting down with the provinces and agreeing on exactly what will come and sort of forcing a consistent approach across all of them about which buckets of information will be provided. We saw this during the pandemic. When the country needed information about individuals who had COVID, there was an agreement on what to send off. It wasn't always in a timely way, but at least it was possible. I am hopeful that the federal government can do that with the provinces and territories to get a better picture across the country.

Kristina Tesser Derksen :

Thank you. On the same report, I want to talk about something I just caught in your “At a Glance” section, which is the overall message. You talk a little bit about the equitability of access to child care spaces. There was a line that said, “those spaces may also not be equitably accessible to diverse or vulnerable families.” I note the use of your word “may”. I suspect this has to do, again, with the data collection and information sharing. Can you expand on why you have uncertainty about the equitability of the access to these spaces?

Karen Hogan :

I think this speaks exactly to the different

definitions used for accessibility across provinces and territories and also to the different approaches in reporting back. This is why having a consistent understanding and agreement with everyone would help. We found that the reporting was telling the federal government that there are more inclusive spots, but not whether they were even being taken up and who was occupying them. It's just some basic information that I think would be easy. The provinces have it. The day care centres have it. It just needs to make its way to the federal government.

(1115) The Chair :

Thank you very much. That is the time. We are now going to begin our third and final round. I'm going to be sticking a little closer to the assigned times, because I know the Auditor General does have an appointment after this. We're running just a little bit behind schedule, but not too badly. Mr. Stevenson, you will kick things off for five minutes, please.

William Stevenson (Yellowhead, CPC) :

Thank you. I'm going to go back to the CRA audit. As a CPA in public practice for 26 years, I had many occasions to sit on hold and waste lots of time waiting for CRA, especially when the service levels went down in the last few years. You have a lot of information in the report. Your report specifically showed how the number of agents ballooned in 2022-23, and then it has come back down. Did you see any reasons for the changing of the number of agents? Was that affected by the push to go to self-service with regard to My Account and online? Are there other reasons why the number of agents has decreased?

Karen Hogan :

Obviously, the number of agents and the tools they have directly impact the timeliness and the quality of service that's received. We asked the Canada Revenue Agency about the fluctuations in the number of agents, and it was based on their budget and the constraints over periods of time. The goal was to have people use more self-serve with My Account and the chatbot, but, as I mentioned previously, it resulted in more calls about accessing My Account.

William Stevenson :

In dealing with lots of seniors who are not going to be dealing with online services and people who may not be seniors but are not technically able to deal with those, they're going to be relying much more on these call centres. In some of the stats you had, you said that only 17% of the non-specific information was actually accurate and also that the annual training and analysis was about 30 minutes per agent. To me, that means there's virtually no training in there, which would lead to the quality of the calls. Is there any evidence that the CRA, in giving you all this information, has programs to...?

You're saying they don't have the tools, so what do they actually have that is going to increase the quality of these agents, going forward?

Karen Hogan :

I agree with you. I remember that I could help my dad with his tax return, but he always preferred calling the Canada Revenue Agency to get an answer, so I can appreciate that many people want to call and speak to someone. They had quality evaluations, and those quality evaluations highlighted either gaps in information or—

William Stevenson :

That's just for statistics. That doesn't say how they are actually training them to get them there.

Karen Hogan :

What's missing from there is that there was very little actionable feedback given to an agent or an agent's supervisor, and as a result there was very little training.

William Stevenson :

There was almost no training, then.

Karen Hogan :

We made a recommendation about triaging the calls: If it's about My Account, put it in one area. There is a different set of training and skills needed there, versus if it's about tax questions and meeting your obligations. There's a different set of skills and tools needed there. We hope that will help improve the service going forward.

William Stevenson :

Going back to that, is there any evidence that they are addressing the timing of these calls? We have lots of statistics, but, as I learned from a stats professor in university, “there are lies, damned lies, and statistics.” Having the statistics doesn't mean anything if they're not going to actually do something about it and have an ability to help their agents do it. From your analysis, was there anything in there to indicate that they're actually going to try to adjust these by giving their agents the tools?

Karen Hogan :

I agree that you can make statistics tell just about any story. That's why it's important to always balance the statistics that you look at. I'm going to point to the evaluation for the agents. Less than 10% of it placed importance on the accuracy and completeness of a response. When you set that out, the culture you set out is not one focusing on getting the answer right, but one focusing on adhering to schedules or meeting call volume. Fundamentally, they need to start there. What you measure ends up in results, so you need to measure accuracy and place more importance on accuracy.

(1120) William Stevenson :

You just made a point about the culture. Would you say that there's a lack of culture to address meeting taxpayers' rights?

Karen Hogan :

That's a tricky question to answer, because the Canadian tax system is a voluntary system in which the onus is placed on you, me and everyone else in the country to provide accurate information in our tax returns. The Canada Revenue Agency's responsibility is to support taxpayers in doing that. What we found is that taxpayers are waiting too long and are not getting accurate responses when they call.

The Chair :

Thank you very much. That is your time, Mr. Stevenson. Up next is Mr. Housefather for five minutes, please.

Anthony Housefather (Mount Royal, Lib.) :

Thank you very much, Mr. Chair. Thank you, and happy anniversary. I really appreciate your work. When was the last date at which you collected information for this audit?

Karen Hogan :

Do you mean the Canada Revenue Agency audit?

Anthony Housefather :

Yes.

Karen Hogan :

Our audit period ended on June 30, but we concluded that we had all of the information we needed in October.

Anthony Housefather :

As part of this, you didn't track the 100-day plan the government has now put into effect. Is that right? Any benefits from that would have come after that date. Have you been able to observe, since then, any appreciable changes that have happened as a result of the 100-day plan that you are satisfied with?

Karen Hogan :

You're right. The 100-day plan was issued after the end of our audit period. I am aware of it and I have looked at it. That's why I said earlier that the 100-day plan, in combination with the actions in response to our recommendations, will, I hope, improve service time and service quality.

Anthony Housefather :

One of the things I found bizarre was about Charlie the chatbot—which is a great name. You said, “We found that Charlie provided accurate answers in only 2 out of the 6 questions we asked it, while the other public web-based conversational artificial intelligence tools answered 5 out of 6 questions accurately.” How is it that the government's specialized tool for the CRA is worse than the average tool that anyone can access anywhere?

Karen Hogan :

It's an excellent question to ask the Canada Revenue Agency. Charlie the chatbot was only populated with general personal income tax information, so when we asked questions about business taxes, it had a hard time because of how it was designed. It's about whether or not they plan on expanding that and completing the population. I think that would be a great question for the Canada Revenue Agency.

Anthony Housefather :

Definitely. I'm sure we'll all ask it. That's in paragraph 36, and you said the recommendation for it was in paragraph 43, but there's nothing that I found in the recommendations that seemed to suggest they needed to revise this tool. You talked in general about how they need to make information more available, but should they change this tool? Should they eliminate Charlie the chatbot and find another conversant chat tool that will do a better job, or is it simply a matter of them needing to upload more information into this existing tool to allow it to have more comprehensive answers?

Karen Hogan :

Our recommendation really focused on improving the accuracy and timeliness of responses. It's not right for me to say to the Canada Revenue Agency they should eliminate or enhance Charlie. That's a management decision. No matter what tool they choose, they have to consider that some Canadians want self-service and some want to speak to an agent, so they need to improve the quality and responsiveness of both.

Anthony Housefather :

I agree with that. Personally, I totally prefer not talking to a person. I prefer getting information online, but I get that there are people like your dad, and probably my parents, who want to talk to an agent. Can I go to the cybersecurity report for a second? One of the things that, again, baffled me was the number of federal organizations that are not subject to Treasury Board policies and are thus not required to implement all of the cybersecurity services the government offers.

For example, you found that 43 federal organizations, representing 36% of all federal organizations that are not bound by Treasury Board policies, are not using CSE's cybersecurity defence sensors. Isn't it deeply problematic that we have federal government organizations that are not availing themselves of the tools the government makes available to protect us from cybersecurity attacks?

(1125) Karen Hogan :

Who's required to use these sensors is a question of policy. The defence sensors are really strong and have proven to be effective. I think what's important is that it's not the only layer of defence. The sensors are a layer you put on top of the cyber-defences you already have. Out of the 119 organizations that don't have to use it, you're right that about 64% of them are. They've opted in and seen the value. One of the gaps that we've highlighted is exactly this. Having this fragmented approach to cyber-defences puts the government somewhat at risk.

Any good cyber-defence is about having as many people as possible feeding it. If everyone reports potential phishing attacks, all you're doing is improving and bolstering the defences. If the whole federal family partook in it, we would improve the defences of the Government of Canada's networks and systems.

Anthony Housefather :

I totally agree. I have one last question, Ms. Hogan. Did anyone from any of these departments that chose not to use the tools provide a good reason for why they didn't avail themselves of the opportunity to use them on top of what they already had?

Karen Hogan :

We asked a few of the organizations that weren't using it—some of the departments and agencies, and some of the Crown corporations—and they gave us a few reasons. The first, for some, was that it might potentially impact their independence. For example, if you're a Crown corporation, there's the need to stay at arm's length from the government. They were also concerned about the limited ability to customize these sensors to meet their needs. They also had concerns around the support and maintenance that might be offered by Shared Services Canada.

What I can tell you is that the Office of the Auditor General is one of the most independent organizations in the government. I have cyber-defences and use the sensors on top of those, because I believe every Canadian expects every federal organization to do everything it can to protect their personal information or information about the government.

Anthony Housefather :

I totally agree. Thank you.

The Chair :

Thank you, Mr. Housefather. [ Translation ] Mr. Lemire, you have the floor for two and a half minutes.

Sébastien Lemire :

Ms. Hogan, with regard to recruitment for the military, you raised the issue of diversity. Do you have any data on recruitment among francophones?

Karen Hogan :

We do not have this data, as I do not believe it is collected by the Department of National Defence.

Sébastien Lemire :

Do you have any data on recruitment in Quebec compared to other provinces?

Karen Hogan :

I’m sorry, but we don’t have that information. I suggest you contact the Department of National Defence. That would be the best place to get that information.

Sébastien Lemire :

Thank you. In Abitibi-Témiscamingue, the Canadian Armed Forces recruitment office closed in 2015. My brother was in charge of it, and I salute him. At one point, there were more than 120 members of the forces in the region. Since then, it has been neglected. Even the headquarters of the 9th Engineer Squadron is now in Montreal. You don’t mention it, but would it be normal to have regional recruitment centres be closer to the places where recruitment is taking place? In your report, you say that you found that only one in thirteen candidates was recruited. Perhaps the problem lies in the form of communication.

Rather than relying on a website, would it be more effective to have face-to-face exchanges where guarantees are offered and people are treated as individuals?

Karen Hogan :

Attracting people to the Canadian Armed Forces is not a problem. Thousands of people apply every year. However, only one in thirteen people begin basic training. There are several reasons for this. For example, it could be the processing time for applications. Even if people apply in person, they still have to wait for their application to be processed afterwards. What is more concerning, in my opinion, is the fact that the Department of National Defence does not know why people drop out of the process. It cannot change it if it does not know why people are dropping out. I do not know if Mr. Lombardi would like to add anything.

(1130) Gabriel Lombardi (Principal, Office of the Auditor General) :

I just want to mention that it wasn’t only in Quebec that the number of recruitment centres was reduced a few years ago, but across Canada. So that would be a good question to put to the Department of National Defence.

Sébastien Lemire :

I believe there is a direct link between the presence of a recruitment officer to liaise with potential recruits and the likelihood of those recruits enlisting. Thank you.

The Chair :

Thank you very much. [ English ] Next, we have Mr. Deltell, who is allowing me to take some of his time off the top. I would like you to have a chance, Auditor, to make some comments on the follow-up program for first nations. This document is remarkable because it is so unique. Could you please explain to the committee why you felt it necessary to table such a document, which is outside of the regular audits that your office normally tables for Parliament?

Karen Hogan :

I think this was me trying to lead by example and do something different. I felt that, instead of coming back after many years and following up on a topic by saying that many of our findings remain, or reissuing recommendations, I would stop and take a look at six audits in important areas that impact first nations communities. These are things that most Canadians take for granted, such as having access to safe drinking water, health services and good dental care.

I wanted to make a point, mid-mandate, of seeing whether any progress had been made, so that, hopefully, by the time I get to the end of my 10 years, I can talk about how the government has rethought its approach to interacting with first nations communities, and whether this has resulted in some meaningful change. If we remember that the goal of Indigenous Services Canada is to transfer everything to first nations communities, they need to start thinking about different ways to do that.

The Chair :

Thank you very much. [ Translation ] Mr. Deltell, you have the floor for three and a half minutes.

Gérard Deltell :

Thank you very much, Mr. Chair. Ms. Hogan, since you tabled your document in the House of Commons, there has been a lot of reaction across Canada. Your report highlights a major problem that affects the most vulnerable people, such as our seniors and low-income individuals who do not have access to an accountant who knows the rules and regulations by heart, like Mr. Stevenson. In short, your report highlights major flaws in the Canada Revenue Agency. First, when you call, four times out of five, they don’t provide the right information, and that’s when you reach an agent.

In fact, last June, in 95% of cases, we were unable to reach one. What message do you want to send to Canadians in this regard?

Karen Hogan :

I hope Canadians see that I understand their frustration. In our tax system, while taxpayers are responsible for filing their tax returns, I think it’s very reasonable for them to expect to be able to speak to Canada Revenue Agency agents in a timely manner and receive accurate information. Given the money that is spent on communication centres, Canadians expect better from the Canada Revenue Agency.

Gérard Deltell :

How can we explain such a decline over the last 10 years? It has always been a concern, but not to this extent. How could things have declined so dramatically in 10 years?

Karen Hogan :

I think we should still acknowledge that improvements have been made since 2017, such as the fact that callers can know where they are in the queue. Even if, during my audit, that information was not always accurate, people could still choose to use self-service options or to stay on the line, which is better than the situation was in 2017. In addition, answers to certain questions have improved. However, the answers to basic and general questions about taxation are not yet accurate.

In my opinion, the cause of this problem is a lack of tools and a lack of emphasis on the importance of providing accurate and comprehensive answers. It comes from the agency's culture and from how agents are evaluated.

Gérard Deltell :

Thank you very much for your perspective on this issue. The culture that has been established over the past 10 years means that the first victims are the most vulnerable people. After that, the agency itself will become a victim of that culture, as it will lose the trust of Canadians when they pay their taxes. Rebuilding that trust will be hard. Mr. Chair, I'd like to move the following motion:

That, in light of serious concerns raised in the Auditor General’s report on the Canada Revenue Agency’s Contact Centres indicating significant failures to provide timely and accurate information to Canadians regarding taxes and benefits, the committee immediately undertake a study on this audit; The study examines the extent to which these failures have affected taxpayers and benefit recipients, particularly low-income Canadians, seniors, and families relying on timely benefit payments; The committee hold its first meeting on this study on Thursday, October 23, 2025; and Officials from the Canada Revenue Agency, including the Commissioner of Revenue, the assistant commissioners responsible for services, and relevant senior officials from the call centre and benefits branches, be called as witnesses for that meeting, alongside the Auditor General of Canada.

(1135) The Chair :

Has your motion been sent to our clerk?

Gérard Deltell :

Yes.

The Chair :

Okay. [ English ] The clerk has received it. It is being sent out. What normally happens.... This is a matter-at-hand motion. It is in order. We're going to pick this up, but before I excuse the witnesses, I'm just going to take the temperature of the room. I know this is something that has affected all our offices and, of course, Canadians at large and, as the auditor pointed out in a previous discussion, probably every person in this room. If there's broad acceptance to move this motion....

The government members, the Liberal members, have one more slot to ask questions, and I don't want to needlessly deprive them of that if we find agreement quickly. If I find that we don't, and there's a debate, I will excuse the Auditor General and her team, because I know they have other items on their

schedule today. Are there any people who would like to speak to this motion? I see Mr. Osborne. [ Translation ] Then it will be Mr. Lemire's turn. [ English ] Mr. Osborne, you have the floor, please.

Tom Osborne :

Thank you, Mr. Chair. Our vice-chair may want to speak to this as well, but I have not yet seen this motion. We haven't had time to look at, review or examine the motion. I'm always hesitant to speak...you can't speak in any sort of educated way to something you have not seen.

The Chair :

Okay, we can come back to you. A copy has been sent to your P9 account if you want to refer to it. In the meantime, I'll go to Monsieur Lemire.

[ Translation ]

Sébastien Lemire :

Mr. Chair, it goes without saying that the Bloc Québécois supports this motion. Under the circumstances, we see the urgency of responding to this issue, which is becoming very topical. So I think it is our committee's duty to act quickly.

[ English ]

The Chair :

Very good. I will turn to Ms. Yip. I will go back to Mr. Deltell afterwards, just in case. I don't want to move things so quickly. I want to give all members a chance to review the motion before we vote on it. Ms. Yip, you have the floor.

Jean Yip :

I agree with my colleague here and Mr. Osborne that we need time to review the motion. We're here to ask questions of the Auditor General on the release of these new reports.

The Chair :

Mr. Deltell, I'll turn back to you. If you want to say anything on the motion, you can. You don't have to. You can keep it short, or you can go on about what you think is the importance of the motion.

[ Translation ]

Gérard Deltell :

I think everyone can see, after Ms. Hogan's testimony and the documents that have been tabled, that there is an urgent need for action, as my colleague Mr. Lemire so aptly said. The trust of Canadians is at stake. Beyond the mistakes that may have been made in the past, beyond the ambitions of the current management, the reality is that, four times out of five, the information provided is not the right information. That's troubling. Not everyone has access to accountants. I believe that our first duty as parliamentarians is to ensure that all Canadians are treated properly.

Those who can't afford to pay an accountant need to be treated properly. This is urgent. The document is scathing. That's not to mention that, at other times, the current minister pointed out that he was aware of the situation. So this is not new. Today's discussion is just confirming what every member of Parliament knows. All MPs, regardless of their riding, region or political party, are constantly receiving calls from people who are troubled by what is happening at the Canada Revenue Agency. This is not new. This motion did not come out of the blue. That goes without saying.

What we want is to get to the bottom of things. I'm absolutely convinced that my colleagues on the government side agree with us that we need to get to the bottom of this issue, that the officials need to come and testify and explain their situation. That's what democracy is all about. I urge my colleagues to support this motion.

(1140) The Chair :

Thank you very much, Mr. Deltell. [ English ] I'm going back to Mr. Osborne for remarks.

Tom Osborne :

Thank you, Mr. Chair. I see two issues with this. One is that, in full transparency, I would like to have seen the text. It was obviously written. We did not see the text. We're asked to make a decision blindly, which I have a concern about. The other concern is that this is eating into our time to ask questions. Is this something we can deal with at our next meeting? We have another meeting in two days. That would give us time to review this. I'm not saying we're against it. We all want what's best here, but we have not yet seen this.

The Chair :

Thank you very much. We now call the question on the motion.

Tom Osborne :

I'm sorry. I'd like to have time to review the motion. Is it appropriate to ask that we do this on Thursday? We may all very well be in favour of this.

The Chair :

Unfortunately, when the question is called, the vote is called. The motion was put before the committee. I heard what you said about taking it to another day, but the motion is before the committee. In fact, the motion calls for this committee to address the CRA matter on Thursday. That's basically the gist of the motion. (Motion agreed to: yeas 8; nays 0)

The Chair: I will now go back to government members. There is one slot remaining for five minutes. Mr. Osborne, you have the floor for five minutes.

Tom Osborne :

Thank you, Mr. Chair. I'm going to ask a couple of questions, and I'll allow my colleague to ask a couple of questions as well. This is for Ms. Hogan, the Auditor General. I'm concerned with the fact that fewer than 10% of people who apply through the recruitment process actually make it through the process. Is it as simple as having more recruitment officers to follow up with these individuals? Certainly, I would think that some individuals, over the course of time, if they have not been followed up with, may simply fall off the radar. If they were followed up with by recruitment officers, they might in fact continue to go through the process.

Karen Hogan :

There are two parts to the answer to that question. One of them is that National Defence and the Canadian Armed Forces do not know why more than 50% of the people abandon the recruitment process after they start. I think they first need to do a better job of collecting that information, because they can't improve or change something if they don't know why people are abandoning it. One of the other things we could highlight, however, is that the recruitment process takes way too long. It should be about 100 to 150 days, and it's taking about twice as long.

It's reasonable to assume that with that length of time, many people have perhaps moved on to find another job, and that happens no matter where you apply. With National Defence, we saw them reaching out, but when an individual didn't communicate back after a couple of months, they did declare the application voluntarily withdrawn. There are a lot of things that impact this, including the process to apply. It's very manual.

It's not very automated, so there's an opportunity to improve the tools that support recruitment, in addition to looking at why recruitment is resulting in only one in 13 people making it to basic training.

(1145) Tom Osborne :

My second question has to do with the manual input, as opposed to automated input, and the fact that these systems are not connected. That's also a concern. Have you looked at the complexity of connecting these systems and having a more automated system? What is required of National Defence to do that?

Karen Hogan :

I have to admit that I don't think we expected to see that many systems involved in tracking, training and recruitment. I would summarize it overall by saying that the process lacked automation and could really benefit from some electronic forms and better leveraging of technology. We saw that the army, the navy and the marines each tracked their own professional training, so you didn't have a global picture to understand why. In fact, on some bases they did it individually as well. There's a real opportunity to get a global picture across National Defence, and I do know they are trying.

They put in a new comprehensive system for training, but they didn't make it obligatory, so not many bases were using it. They have some of the tools, but they're just not using them, so they could leverage technology better.

Kristina Tesser Derksen :

I'm going to take the last few minutes of my colleague's time. This is a broad question about your report and the follow-up programs on first nations. I noted a theme in your report. In a number of paragraphs, where you were talking about the nursing stations, for example, and the “lack of sustained management attention”, it appeared that previous recommendations were acknowledged by the department and that initial actions were put in place. There were assessments done and studies initiated, but then things just trailed off and fell off the radar, and next steps were not properly taken.

Can you comment on what you see as being the core problem that's leading to that type of lack of progress with respect to implementing the recommendations?

Karen Hogan :

This was an opportunity for us to sit back and look at six reports, and ask, “What are the themes, and what do we think are some of the root causes?” My office has been looking at indigenous matters for a very long time. We identified four barriers. I don't think it's an exhaustive list of barriers, but there are four important ones. The one you raise, the lack of sustained management attention, is a big one. There is this flurry of activity after we table reports, and there are action plans.

You brought up a great example, where some surveys are done, some information is gathered, and then the attention to this just dissipates over time. I wonder if it is a combination of the public service and the political arm agreeing on where to go but not redirecting resources or making sure there's funding to carry this through all the way to the end. That sustained focus is essential. There's a lot of turnover in the public service at times, and that could also see things just falling off the way. I would highlight quickly the other three. There's lack of clarity around service levels.

It's important that everyone knows what to expect, and then you can drive towards meeting that outcome. The passive and siloed approach the public service takes is a big contributor to the lack of progress. It really isn't going to get those small communities moving forward, especially those that need it the most and are further behind. That is directly linked to helping increase the capacity in first nations communities, not just technical skills but the capacity to access these programs.

I think that if those three are really tackled and looked at in a way different from the traditional way, we will hopefully see some improvements.

Kristina Tesser Derksen :

Thank you.

The Chair :

Thank you very much. I want to thank the Auditor General and her team for coming in today. Give me just one second, Monsieur Lemire. I'll just thank our witnesses. I'm going to excuse them, and then I'll hear you before ending the meeting. I know Ms. Hogan has a busy afternoon. Thank you very much. It looks like we'll see you on Thursday on the CRA report. You are all excused. In the meantime, I'll turn to Monsieur Lemire.

[ Translation ]

Sébastien Lemire :

Thank you, Mr. Chair. I want to give the Auditor General a chance to comment on the cost of auditing Crown corporations. To do so, I would ask her brief questions on behalf of the committee. Do those costs seem reasonable? Are the amounts set out in the budgets sufficient to carry out audits? No questions have been asked about that, and it hasn't been discussed. Would the Auditor General like to add any comments?

(1150) [ English ]

The Chair :

Would you like to comment, Ms. Hogan? I'm sorry about that.

Karen Hogan :

No, it's okay. [ Translation ] I have to publish this report every fall. As for the cost of annual audits of Crown corporations' financial statements, the amounts set out in the budgets enable me to complete those audits and the financial audits of the three territories. I'm working very hard with all the staff in my office to improve our processes and make better use of technology, at the government's request, to provide you with more information for better accountability.

Sébastien Lemire :

Thank you very much, Ms. Hogan.

The Chair :

Thank you very much. [ English ] We'll see you back here on Thursday. The meeting is adjourned.