EVIDENCE

Standing Committee on Government Operations and Estimates NUMBER 024 1st SESSION 45th PARLIAMENT Tuesday, February 3, 2026 Le mardi 3 février 2026 Standing Committee on Government Operations and Estimates CANADA [Recorded by Electronic Apparatus] EVIDENCE February 3, 2026 Committee NUMBER 024 NUMBER 024 NUMÉRO 024 24 03 02 2026 2026/02/03 15:30:00 House Of Commons Comité permanent des opérations gouvernementales et des prévisions budgétaires Standing Committee on Government Operations and Estimates OGGO Chair Kelly McCauley 1 45

(1530) [ English ]

The Chair (Kelly McCauley (Edmonton West, CPC)) :

Good afternoon, everyone. Welcome to meeting number 24 of the House of Commons Standing Committee on Government Operations and Estimates, the mighty OGGO. We are starting our study of Bill C-15 . We have the Treasury Board to start, and then we have PSAC. I just want to mention one thing. Our interpreters are here virtually today, so we just ask you to be careful with your speed of speaking and with talking over each other. I know it does happen, but just be aware that it's more of a problem when the interpreters are here virtually. Also, I'm going take about five minutes at the end to go over our

schedule around the Bill C‑15 study that's going to take us to the third week of February. We'll start. I understand you have a five-minute opening statement. Please go ahead.

Jenelle Power (Executive Director, Red Tape Reduction Office, Treasury Board Secretariat) :

Thank you, Mr. Chair and members of the committee. We appreciate the opportunity to speak with you today about regulatory sandboxes and the proposed amendments in Bill C‑15 . Regulatory sandboxes are a well-established tool used by governments around the world to evaluate emerging technologies and innovative practices in a safe, controlled manner. They permit regulators to temporarily exempt a specific organization from narrowly defined provisions of legislation or regulation so that a new product, service or process can be tested under supervision.

These exemptions are time limited, apply only to parts of the rules that impede testing and must protect public health, public safety and the environment. The purpose of regulatory sandboxes is straightforward. They help regulators gather the evidence needed to determine whether existing regulatory frameworks should be updated to safely and responsibly allow innovative products into the Canadian marketplace. As technologies evolve quickly, sandboxes give regulators a structured way to assess risks, to understand impacts and to determine what permanent regulatory changes may be appropriate.

The authority already exists within the federal system, with several ministers already having exemption authorities for the purpose of regulatory sandboxes. For example, the Minister of Transport may issue exemptions to regulation and legislation under the Canada Transportation Act to support innovation, provided that it is in the public interest and that the health and safety of Canadians are protected. The amendments in Bill C‑15 simply extend a similar limited authority to all ministers, subject to clear guardrails. I would also like to address some misconceptions in the public domain about these amendments.

Bill C‑15 would not allow ministers to exempt any person or business from any federal law for broad policy purposes. There are strict limitations to the exemption authority, restricting its use to testing a product, service, process or regulatory approach in a controlled setting for a limited amount of time. Exemptions could only be made to the specific provisions that prevent the regulator from running the test. Exempting entire sectors of an industry or fast-tracking entire major projects is not within its scope.

The legislation includes explicit transparency and accountability requirements, which will allow for continued oversight and will prevent executive overreach. Ministers must publish exemption orders and an explanation of the decision-making process while protecting confidential business information as required by law. Furthermore, the President of the Treasury Board must table an annual report in Parliament listing all exemption orders issued in the previous fiscal year, the rationale for each and the ministers responsible.

This oversight mechanism ensures that Parliament is informed and able to scrutinize the use of these authorities. Ministers could not use these provisions to exempt themselves or others from obligations under statutes such as the Conflict of Interest Act. The authority applies only to laws within a minister's portfolio and only for the purpose of testing and innovation under regulatory supervision. As with any ministerial decision, exemption orders remain subject to judicial review.

Sandbox testing is not intended to bypass important protections and lead to regulatory changes that compromise safety or environmental standards. The legislation requires that exemptions be in the public interest, that the benefits outweigh the risks and that implementation plans ensure the protection of health, safety and the environment. The purpose of a sandbox is to generate evidence so that regulators can make better-informed decisions about how to maintain—not reduce—these protections in a rapidly changing context. Finally, it is worth noting that the measures would not encroach on provincial jurisdiction.

The legislation itself restricts exemptions to federal statutes and regulations within the responsibility of the minister issuing the order. Moreover, the complementary policy on regulatory sandboxes directs ministers to support federal-provincial collaboration and to meaningfully consult indigenous peoples as part of sandbox development. Regulatory sandboxes are a valuable tool to help Canadians remain competitive while ensuring that our regulatory system continues to protect Canadians. They allow regulators to adapt safely, transparently and responsibly to technological change.

The amendments in Bill C‑15 introduce consistent guardrails, enhance accountability and strengthen government-wide due diligence in the use of this mechanism. Thank you. We would be pleased to take your questions.

(1535) The Chair :

Thank you very much. We'll start with Mr. Patzer for six minutes.

[ Translation ]

Marie-Hélène Gaudreau (Laurentides—Labelle, BQ) :

I have a point of order, Mr. Chair. I just want to remind you that the interpreters are doing an exceptional job, but there's a slight delay. However, if people slow down, as I am doing right now, I think we won't miss a single sentence or word. So this is an appeal to all of you. We can sometimes be more tired in the afternoon, so I'll remind you if you're speaking too quickly. Otherwise, it will be impossible for the interpreters to do all this in record time.

[ English ]

The Chair :

That was what I was covering at the beginning, but that's a good reminder. Thanks very much. Go ahead, Mr. Patzer.

Jeremy Patzer (Swift Current—Grasslands—Kindersley, CPC) :

Thank you to the witnesses for joining us today. I'm going to pick up on a couple things you just said, Mrs. Power. Did you say that they are going to report once a year on how often they are used? Could you elaborate on the reporting bit?

Jenelle Power :

It's required that once a year the President of the Treasury Board would have to produce a report. It would actually come to this committee. In the report, there needs to be every new regulatory sandbox authority that was granted in the last year and any ones that are ongoing. If it was granted two years ago but it's still in place, that has to be listed as well. Also, all the ministers who actually made the decisions need to be included in the report.

Jeremy Patzer :

Every single department will be reported back to this committee.

Jenelle Power :

Absolutely.

Jeremy Patzer :

These sandboxes were whose idea?

Jenelle Power :

The authorities have been sought for several years at this point. I think that consultations actually took place in 2023 in terms of trying to get the feedback to put them in place. Brennen might have more history that he'd like to share.

Brennen Young (Senior Director, Red Tape Reduction Office, Treasury Board Secretariat) :

Regulatory sandboxes have been in use in the financial technology sector for quite some time. They are starting to be used internationally a little bit more. Within the Canadian context and the federal context, the Minister of Transport and the Minister of Health got sandbox authority in 2019, so it dates back several years. We looked to expand the authorities to all ministers starting in a consultation in 2023. We have a number of stakeholders that support that this was a good idea. We continued to proceed with that. I think the use of this is something that we could probably date back 10 years.

Jeremy Patzer :

Are there reporting requirements in place already for those ministries you just listed or is this a new addition?

Brennen Young :

One of the things we're looking to do with this horizontal approach is create a playing field that is the same for all ministers. Right now, the authorities that have been granted can be used in different manners by different ministers. The conditions for each of the different authorities vary by legislation. This would create a similar set of reporting requirements for all ministers.

Jeremy Patzer :

Right now, though, does the Minister of Health—I forget which other ministry you said; I think it was maybe transport—currently have a reporting mechanism in place? If they started having this ability to do sandbox in 2019, was their reporting mechanism in place at that same time?

Brennen Young :

There are transparency requirements in the legislation that they must publish the orders they use for the exemptions or they must publish the changes to the

schedule they have, but there's no reporting back to Parliament.

Jeremy Patzer :

You guys are handling the red tape review as well. Is that correct? Does your work inform or relate to the comprehensive expenditure review that Treasury Board also has going on right now?

(1540) Jenelle Power :

It doesn't.

Jeremy Patzer :

That's completely separate. There's a promise to cap but not cut public service jobs, but now, all of a sudden, there are 40,000 public service jobs on the block. Has there been a memo circulated through your department talking about those job cuts?

Jenelle Power :

That's not within our purview. I can't comment on that.

Jeremy Patzer :

Is your department going to be impacted by these job cuts?

Jenelle Power :

I can't speak to that, unfortunately.

Jeremy Patzer :

What about something like the Impact Assessment Act and, by extension, the Major Projects Office? Is that something your office is reviewing?

Jenelle Power :

No, it's not. We would have conversations with the Major Projects Office around the red tape reviews because one of the horizontal reviews touches on some of their work, but they're a totally separate office from ours.

Jeremy Patzer :

Okay. Obviously, they put the Major Projects Office in place because there is too much red tape and there are too many barriers to getting projects done in Canada and they're trying to supersede that. Does your work inform that a little bit? Could you add a little bit more on what that relationship looks like?

Jenelle Power :

I don't think I can speak to what the Major Projects Office does. I can acknowledge that, yes, there are different efforts in place to try to reduce red tape. One of them is the regulatory sandbox. We have some other tools we use to look at areas within the government where we could make some improvements. However, I can't speak to the work they're actually undertaking.

Jeremy Patzer :

Outside of the trial concept of the sandbox, though, has there been any actual red tape that you've been able to reduce or get rid of in your time?

Jenelle Power :

There are few different avenues we pursue. There's regulatory co-operation, where we are exploring a number of ways we can better align our regulations with other jurisdictions that are like-minded, like the EU, for example. Also, the 60-day reports that took place in the summer, which were published in September, have numerous ways to reduce red tape in them. Nearly 500 items were identified—

Jeremy Patzer :

How many of those 500 have actually been cut?

Jenelle Power :

I'm sorry. I'm not sure what you mean by “have actually been cut”.

Jeremy Patzer :

I mean, figuratively speaking, the red tape. There are 500 items. How many of those have been removed? How many barriers have been eliminated?

Jenelle Power :

The reports were just published in September. There will be a public reporting on progress in the spring.

Jeremy Patzer :

Okay. Thank you.

The Chair :

Thank you, sir. Ms. Rochefort.

Pauline Rochefort (Nipissing—Timiskaming, Lib.) :

Thank you very much, Mr. Chair. Last week, I had the pleasure of speaking at the North Bay and District Chamber of Commerce. One of the questions I was asked was how the federal government is attacking red tape. It was actually fitting, because the Canadian Federation of Independent Business have a special week every year which they call Red Tape Awareness Week. It was last week. They say that the goal of the week is:

to raise awareness about the red tape challenges that currently exist with politicians and policy makers to encourage positive changes that will boost productivity, improve affordability, and create a landscape where small businesses can thrive.

I thought it was fitting today that we're going to be discussing what I guess is viewed as a regulatory innovation that tackles precisely the challenges as they were outlined by the chamber and the CFIB. As a first question, I'd be interested in better understanding how the regulatory sandbox will fit within the overall work of the red tape reduction office, a little bit in line with what Mr. Patzer was asking. Also, if you could explain what the office does, I would welcome that.

I'd also be interested in the work you're doing with the provinces, as we talk about building one Canadian economy and reducing internal and regulatory barriers. If you could touch on that as well, I would welcome your comments.

Jenelle Power :

We do talk to the Canadian Federation of Independent Business quite often, so we're very up to speed on all their work. In terms of the red tape reduction office, I've mentioned some of the big pieces we undertake, like the regulatory co-operation efforts to align with like-minded jurisdictions. That also extends to internal.... We're trying to work with the provinces and territories to align our regulations internally to make things easier. We were involved with the negotiation for the mutual recognition agreement that was signed in the fall.

The other piece of work that maybe hasn't been mentioned yet is that we are currently looking at all the tools that are in place to guide regulators in making regulations. We're looking at whether there are other ways we can make the system itself more efficient and allow for regulations to be made in a more agile and efficient way. I will say that the regulatory sandboxes are a really good tool for that, in that when an innovative product or process is tested with a regulatory sandbox, that information is meant to be used to inform a future permanent regulatory change.

It really is an advantage for the regulators, because they're able to test things out in a small environment, take that information they get from the actual practical application in a Canadian context, and hopefully make a more streamlined, efficient regulation in the future.

(1545) Pauline Rochefort :

Ultimately there will be better decisions and better regulations. Would that be correct?

Jenelle Power :

Absolutely. They'd be evidence based in a way they couldn't be otherwise.

Pauline Rochefort :

They're evidence based. Can you walk us through an example of how the implementation of a regular sandbox decision works?

Jenelle Power :

I would love to. I can give you an example of a regulatory sandbox that took place at Transport Canada. At Transport Canada, they have regulations currently in place around the transportation of dangerous goods, say, if you're moving dangerous goods by rail. Right now, it requires a paper document. This document has information about what is being transported and quantities, but also what to do in case of some sort of emergency or accidents and that kind of thing. As you can imagine, stakeholders find this to be a redundant process, in most cases. Very few businesses are running on paper these days.

Therefore, Transport Canada actually worked with stakeholders to put in place a sandbox where they tried using electronic documents and gathered information from stakeholders but also from enforcement agencies and first responders who might have to use it in the case of an accident. They've gathered that information, and they plan to use that to inform changes to the regulations in the future.

Pauline Rochefort :

That's an excellent example. With any of the decisions made to date—I guess that's with Health Canada and Transport Canada, where the sandbox has been allowed—have there been any negative outcomes through their work with sandbox regulations?

Jenelle Power :

There are no negative outcomes that we're aware of. They are pretty tightly controlled. The requirement to have regulatory oversight while still abiding by all the requirements for maintaining health and safety still applies. There is nothing I could report on.

Pauline Rochefort :

Thank you very much.

The Chair :

You have a minute and a half left.

Pauline Rochefort :

I'm good for now. Thank you.

The Chair :

Next is Madam Gaudreau.

[ Translation ]

Marie-Hélène Gaudreau :

Thank you very much, Mr. Chair. First off, I have to say that, as an entrepreneur, having the freedom to make decisions and become efficient is obviously welcome. I'm very aware of that. Since becoming a member of Parliament, I've realized that too often practices that may resemble those of the business world are introduced, but we're dealing with public funds. I've been very concerned for the past six years because the oversight or accountability measures haven't given me any evidence that what is being proposed here will be efficient, let alone an explanation of why this wasn't done earlier. I have a few questions because my brain wasn't keeping up at the beginning of the

interpretation. How will the government ensure that regulatory sandboxes are actually used for innovation, and not for the circumvention of existing rules?

Brennen Young :

I can answer that. In the bill, there are conditions that the minister must comply with if the minister wants to grant an exemption. For example, the exemption must be in the public interest; it must test a product, service or process, among other things; and most importantly, it must be for the purpose of facilitating the design or modification of a regulatory framework. It can't be for any other reason. It really must be to test a new regulatory framework.

The minister must also be of the opinion that the benefits outweigh the risks, so the minister must conduct an assessment to determine that it is indeed in the public interest. The minister must also be satisfied that there are sufficient resources to ensure regulatory oversight of the project. There must be an implementation plan to manage the regulatory sandbox. It's not in the bill, but you will see a policy on regulatory sandboxes in a document that was sent to the clerk. It's a cabinet policy.

There are all kinds of other conditions that regulators will have to meet when they make their implementation plans, such as consultations with stakeholders and indigenous peoples. There are also conditions related to transparency, how the public will be consulted, and how information will be communicated to the public. These are practices that have more to do with how the government operates and are therefore in the policy. What is in the bill is really about permissions and the process for granting exemptions.

(1550) Marie-Hélène Gaudreau :

I imagine that when preparing to make any changes, there will be a checklist of items confirming that the necessary work has been done, such as whether consultations have been held, and so on. Now, I would like to know about what happens regarding transparency and disclosure. For parliamentarians and people affected from a legislative standpoint, what is the mechanism? Is there a little box that indicates that, as a parliamentarian, I will be informed of what's going on? Personally, what I'm thinking about are abuses. I'm very concerned.

Brennen Young :

In that policy, regulators are required to carry out the consultations in advance. We have a mechanism called the forward regulatory plan. That plan is published every year and sets out the regulatory changes expected over the next two years. Regulators are supposed to include regulatory sandboxes in that plan, which is made public. Every time a minister uses an exemption, the information about that exemption must be published and made available to the public. Every year, the President of the Treasury Board will take all of these exemptions and provide this committee with the list of which exemptions were used and which ministers used them.

Marie-Hélène Gaudreau :

I still have a few seconds left. Honestly, I don't think it's enough to reassure taxpayers who have already been burned. Yes, we have the ability to act, but please, we shouldn't end up one year into the next two-year period without any warning about what's happening. I would hope that, given your expertise, you will have oversight mechanisms that will allow us to…. It's easy to bury this, in the real sandbox. Thank you, Mr. Chair.

[ English ]

The Chair :

Thanks very much. Mrs. Jansen, go ahead, please, for five minutes.

Tamara Jansen (Cloverdale—Langley City, CPC) :

Ms. Power, as I understand it, this new power of ministers to give regulatory exemptions for companies must be in the public interest. Does the bill define public interest in clear terms, yes or no?

Jenelle Power :

It's not defined.

Tamara Jansen :

Who is going to decide what is in the public interest?

Jenelle Power :

It's a commonly used term within this type of legislation, and the legislation is still—

Tamara Jansen :

Who defines it? That is my question. Who will define it?

Jenelle Power :

The minister would make the decision.

Tamara Jansen :

Is there a mandatory conflict of interest review written into the bill?

Jenelle Power :

No, it wouldn't apply to conflict of interest.

Tamara Jansen :

Can this new ministerial power be used to exempt a person or company from the Conflict of Interest Act or the Lobbying Act, yes or no?

Jenelle Power :

It's to apply to a regulatory regime and regulatory parties, so it wouldn't apply to conflict of interest legislation.

Tamara Jansen :

Is there a possibility that a company like Brookfield could be granted an exemption by a minister under this bill, yes or no?

Jenelle Power :

The decisions are all government-led, so it's still the minister and the government making the decision to grant the authority, not a business.

Tamara Jansen :

They will decide whether they can give an exemption under this. They can decide what's in the public interest.

(1555) Jenelle Power :

Within the guardrails that are there, yes, the minister has the authority to make the exemption.

Tamara Jansen :

Can a minister grant an exemption based solely on their opinion of what is in the public interest, just like we saw during SNC-Lavalin?

Jenelle Power :

There are so many guardrails in place that it couldn't be based on opinion. It would have to be based on meeting all of the safeguards that we have in place that Brennen just mentioned.

Tamara Jansen :

Which guardrails are we talking about?

Jenelle Power :

There are a number of requirements. The minister has to determine that the benefit outweighs the risk, that it's in the public interest and that it will protect public health, safety and the environment. They can be used only with the intent to make a regulatory change in the future.

Tamara Jansen :

That's basically the reason SNC-Lavalin happened, because someone decided it was in the public interest, which it clearly was not. Can Parliament veto an exemption once it's granted, yes or no?

Jenelle Power :

Everything would come to this committee in the annual report, and then this committee would have the opportunity to review all the decisions that were made.

Tamara Jansen :

Will we have a veto once that exemption is granted?

Jenelle Power :

It's designed, like any piece of legislation, to be subject to judicial review.

Tamara Jansen :

Yes or no, do we get a veto? Once it's done, it's done; we can only look at the information, and that's it.

Jenelle Power :

Like any piece of legislation, there's parliamentary oversight to its usage, so this committee is one of the ways that oversight would be provided.

Tamara Jansen :

There's no veto.

Jenelle Power :

It's not set up exactly in that way, no.

Tamara Jansen :

The challenge we have as parliamentarians is how we decide what's in the public interest, especially because it's not defined in the bill. Why isn't it defined in the bill? Why wouldn't they have made it very clear what is in the public interest?

Brennen Young :

“Public interest” is a term that's used quite commonly in other pieces of legislation, and it's not defined in that legislation either. It was a drafting decision that this would not be the place to define public interest.

Tamara Jansen :

Would it make sense that, on behalf of Canadians, public interest would be defined so that we're not going to have any overreach on behalf of ministers who can make their own decisions as to what's in the public interest?

Brennen Young :

I can't comment on that. It's not defined in other pieces of legislation either.

Tamara Jansen :

I don't know if any of my colleagues have any other questions, but that's that's shocking to me, actually. I have one more minute. Does anybody want to take that minute? Go ahead, Mr. Patzer.

Jeremy Patzer :

Is the one-year reporting requirement standard across other similar developed nations that use sandboxes?

Brennen Young :

Different countries have different regimes. For example, in Japan, they have a blanket sandbox regime that cabinet gets to decide, and there are no reporting requirements at all. The reporting requirements that we put into this piece of legislation are actually a fair bit more transparent than what other countries with similar types of sandbox legislation have.

Jeremy Patzer :

Is there anybody who has a shorter reporting window, say, six months or quarterly?

Brennen Young :

Not that I'm aware of.

Jenelle Power :

If I could add to that, in addition to that annual reporting—I failed to add this earlier—any time a new decision is made by a minister, they're also required to make their decision public as soon as it's feasibly possible. They need to provide information about how the decision was made, what the decision was and then also make public the information on how stakeholders can give feedback on the decision. There's the interim, more immediate part that happens minister by minister, and then there's the overall one-year report that will come to this committee, which is done by the President of the Treasury Board.

The Chair :

Thanks very much. Ms. Khalid, go ahead please.

Iqra Khalid (Mississauga—Erin Mills, Lib.) :

Thank you very much, Mr. Chair. Thank you to the witnesses for appearing here today on an issue that is very important. In my 10 years as a member of Parliament, I am often asked why the government is so slow and why we aren't innovative enough to address the issues of our time, with artificial intelligence being one of the examples of our day. How do you think these sandbox provisions, the regulatory framework, help the government be more innovative and more responsive in a timely manner to the problems of the day that Canadians expect us to tackle?

(1600) Jenelle Power :

I do think sandboxes help in a couple of ways. Traditionally, to make a regulatory change, it can be quite a lengthy process, with 18 to 24 months being average. As I mentioned earlier, we are looking at the system itself. In the meantime, we're trying to find other avenues where we can make improvements. Regulatory sandboxes make it easier to get an innovative technology or process tested in the Canadian market in a more temporary, time-restricted way. It's a faster authority to give, but it's often also scoped in to just test it out and collect data.

Then, that information will be used in the future to make the permanent change in a much more effective way because you have that real-time data to make it.

Iqra Khalid :

Thank you. You said that you have done consultations with stakeholders. Can you describe the results of those consultations?

Jenelle Power :

Yes. As mentioned, they happened in 2023. For the most part, stakeholders were quite positive and excited about this potential as a way to be more innovative and more agile and to get things to the market more quickly. There were a couple of concerns raised around, for example, transparency and the ability to maintain regulatory oversight during the sandbox. Some of those concerns informed the guardrails and the policies that were put in place in response, so they really helped to ensure that any of those concerns had mitigating measures up front.

Iqra Khalid :

Thank you. Just talking about the limits on the duration—we're talking about the efficiency and effectiveness of these sandbox projects—how would a regulatory framework or a sandbox project be managed with time? How are the scope and the length of a project established? How do we know that we have enough data? How do we know when to stop it and move on to the next phase?

Jenelle Power :

Currently, there's a three-year maximum for the regulatory sandbox. That was really designed to be a bit of a middle ground—especially for some sectors that are quite complicated—to get a sandbox in place, to get a data collection method in place and to give enough time to test something without it going too long. It's really designed not to be really prescriptive because, as you can imagine, the realities of different sectors are quite different. Then there's a maximum three-year extension available, and that's really intended to allow a transition.

For example, if a regulator ran a sandbox for three years and decided that it was definitely how they wanted to do things, they could extend it to make it permanent without a regulator having to go back to the old way and come back to the new way again. We're trying to avoid any additional burden on industry as we do these.

Iqra Khalid :

Thank you. Lastly, I'll ask whether there are any exemptions to what gets tabled in the House by the minister or the President of the Treasury Board in terms of which regulatory sandboxes are used—out of national interest or things like that. When we're talking about transparency, how transparent is this process to Parliament?

Jenelle Power :

All regulatory sandboxes must be included in that annual report. If there are details about sensitive business proprietary information, those pieces might have to be removed, but all regulatory sandboxes will be included in the annual report.

Iqra Khalid :

Thank you. I appreciate that. Thanks, Chair.

The Chair :

We will go to Madam Gaudreau now.

[ Translation ]

Marie-Hélène Gaudreau :

Thank you very much, Mr. Chair. Let's go back to the definition of certain elements. First of all, of course it's nice to say that we'll be able to act quickly. There are unnecessary steps, so we can be pleased that we will essentially streamline the entire public service workforce. That's true. However, it's wishful thinking to say that we're going to make a 180‑degree turn with a machine that big. It's being said that it has to be done in the public interest, but there's no precise definition. “Public interest” can be very elastic.

We can certainly say it's in the public interest, but whose public are we talking about? How? To what extent? How will you determine, in a given case, that it truly is in the public interest?

Brennen Young :

It will be up to the minister to define what is in the public interest. It will also be important to take into consideration the fact that there are other conditions, such as the fact that the minister must be of the opinion that the exemption—

(1605) Marie-Hélène Gaudreau :

I want to make sure. Let me give you an example. During question period, we were talking about the high-frequency rail project. We need to ask ourselves what's going to happen. We talk about public consultation. We say the public was consulted—perhaps 20% or 40%—but it was done. If I understand correctly, the minister can say that it was done. On top of that, all the other little boxes get checked. In the end, there will be an annual report anyway. We'll get scolded later, but the damage will already be done. In any case, what we put in place temporarily will become permanent, as often happens in life. How can you convince Canadians that what is on the table is a good thing?

Brennen Young :

What happens with an exemption is that it can only be valid for three years, and it can be extended up to six years, if necessary. Without the exemption, the original regulatory framework would remain in force. The minister can obtain this exemption if all of the conditions have been met, that is, if it is in the public interest, if it is for the purpose of testing a product or service, and if we have the resources to carry all of this out.

Marie-Hélène Gaudreau :

The three‑year period closely coincides with the date of the next potential election. That's a lot. How do we reassure people? Moreover, I don't know how you'll do your job while getting red flags. It's always an afterthought. Can we beg for a structure? In this case, it remains unclear what lies in the public interest. In terms of conflicts of interest, you can agree to them. Of course, after three years, if you have made a few million dollars, you agree to receive a scolding and to pay a minimal fine. I can't believe that there isn't even any oversight. How will you sleep at night knowing the amount of leeway for decisions that may be valid, but that involve public funds?

Brennen Young :

For each exemption, the minister making the decision must publish the rationale and contact details. That way, the stakeholders who may be affected, who have questions or who wish to participate in the regulatory sandbox can contact the minister or the department to obtain this information or to ask to participate themselves. The exemption provides a way for the public to get involved in the process.

Marie-Hélène Gaudreau :

In closing, Mr. Chair, I would like my name included so that I systematically receive the reports and so that I'm already at the table to draw attention to the situation. We're talking about billions of dollars of public funds. Thank you, Mr. Chair.

[ English ]

The Chair :

Thanks. Mr. Gill, go ahead, please.

Harb Gill (Windsor West, CPC) :

Thank you, Chair. Thank you to the witnesses for coming. I share the same concerns that Madam Gaudreau has pointed out. There are some significant challenges with oversight here. It seems the sandbox idea is another term for “We don't like this regulation and we want to work outside of it.” Would that be a fair statement? They don't like the regulations.

Jenelle Power :

No, they're actually designed specifically to only exempt from very specific regulations or pieces of legislation that prevent the test. The test has to be in place in order to inform a future regulatory change.

Harb Gill :

This is what I don't get. You have a regulation for three to six years whereby you could exempt somebody. Why have the regulation in the first place then? Why not get rid of it?

Jenelle Power :

Unfortunately, the reality is that the system is quite complicated at this point.

Harb Gill :

Yes, I agree. It's too complicated.

Jenelle Power :

You're right. This is one way to figure out how we can safely simplify. New innovation—

The Chair :

Excuse me for a moment. I have a point of order. Mr. Bittle.

Chris Bittle (St. Catharines, Lib.) :

Mr. Chair, I'm going back to your original point not to speak over each other. I know we're really excited about regulatory reform here and—

The Chair :

I appreciate your concern, but the clerk and I will keep an eye on that with the interpreters. I appreciate that. The time is starting again. Go ahead.

Jenelle Power :

I have totally lost my train of thought; I will be honest. Oh, yes, the problems—

(1610) Harb Gill :

There are too many regulations.

Jenelle Power :

Yes, okay. Sorry. I'm back. The federal system does have 3,000 regulations. This is a way to more efficiently figure out how new innovations, new processes could be used to actually reduce that red tape. It's not to get around it; it is to work to effectively improve the system.

Harb Gill :

I would disagree with that assessment. Nevertheless, how do you decide, or who comes to the minister? Do you put out a tender to say, “We are setting up the sandbox and who wants to come play in the sandbox”? How does that happen? Does the minister find his buddies and say, “All right, guys, we have this project coming up, and we have the sandbox for you to come play”?

Jenelle Power :

The sandboxes would really be designed based on a problem that's identified—a process we're trying to improve or a new technology they're trying to bring into the market. It would often be regulators themselves who identify ways to improve the system. If there was an industry solution or technology to be tested, they would have to work with the regulators to set it up. It's still the regulators giving the advice and the minister who's making those decisions.

Harb Gill :

The regulators are employees of the ministry they are responsible to.

Jenelle Power :

Yes.

Harb Gill :

Ultimately, the minister is in charge.

Jenelle Power :

That's correct. It's their authority.

Harb Gill :

Hence it's the complaint or the concern that Madam Gaudreau has with regard to oversight. The fox is guarding the henhouse, so to speak.

Jenelle Power :

There are a number of transparency measures baked in, as I mentioned, around the annual report, and the ministers have to make all of their decisions public.

Harb Gill :

I'm sorry to interrupt, but we've had way too many scandals over the past 10 years to believe that any of that actually works.

Jenelle Power :

I can't comment on what's happened in the past, but this is how this is designed.

Harb Gill :

That wasn't your fault. I'm not blaming you for it, obviously. Nevertheless, is AI one of those things you're also using to implement these various ideas of a sandbox?

Jenelle Power :

A sandbox could be used to test out AI, for sure. It's a really good use case. It's actually the way.... A lot of regulatory sandboxes in other countries are set up to test AI specifically. That's a very good option if we wanted to use it and try it in a small, controlled way to see if it would be a good idea to use that AI in a broader way in the country.

Harb Gill :

Will that have an impact on the number of regulators you have in, let's say, ministry X?

Jenelle Power :

I can't speak to what might happen in the future. I can just tell you what it's designed to do right now.

Harb Gill :

Currently, the government is trying to reduce the number of workers they have in the federal government. That's the question I have. How is that going to have a projected impact? You must have some idea since this is what they're trying to do.

Jenelle Power :

I can't speak in terms of numbers of impacts in the future. There have been some regulatory sandboxes, but few ministers have these authorities now. It hasn't been a widespread authority.

Harb Gill :

Are you consulting with unions that are involved in various ministries? Do they have a say in this, in the sandbox?

Jenelle Power :

The minister and the department are still required to undertake consultations of any impacted groups when they do these exemptions, so it would be up to them to determine their interaction with the union.

Harb Gill :

Therefore, it's entirely up to each ministry to decide whether they want to consult with the unions or not.

Jenelle Power :

We give guidance. We encourage collaboration with jurisdictions that are impacted, with other stakeholders and with indigenous peoples, but they have to decide what is best in their situations.

The Chair :

Thanks. We'll finish up with Ms. Rochefort.

Pauline Rochefort :

Thank you very much, Mr. Chair. Do I have five minutes again?

The Chair :

You do.

Pauline Rochefort :

Okay. Maybe I'll put in layman's terms how I understand it, and you can confirm whether I understand it correctly. To a certain extent, a regulatory sandbox is to ensure that when a regulation comes out, it fits. It doesn't need to be modified. It doesn't need to go back to the drawing table and be redone. It doesn't need to take six years, as you pointed out; it can be done faster. As part of this process, from what I understand, you identify the various stakeholders that are impacted or concerned, and you bring them to the table. They all participate. It's not a check box.

They work together at developing a regulation that people will agree on and that will fit Canada, in other words. Would that be, in layman's terms, a good description of a regulatory sandbox?

Jenelle Power :

I think that's a very fair description. You're right about working with the stakeholders. There are many ways in which this allows for more of that data collection and conversation before there's a permanent regulation. The regulators have quite close relationships with the partners and stakeholders in their sector, so they can manage this very well and use those relationships to get effective information.

(1615) Brennen Young :

May I comment?

Pauline Rochefort :

Yes.

Brennen Young :

Thank you. Again, I'd like to underline that a lot of the best practices you're talking about are codified in the policy on regulatory sandboxes that the regulators will have to follow. All these consultations, for example, and the type of analysis we would want regulators to undertake are part of this policy. It is there, and they would be required to follow it.

Pauline Rochefort :

Going back to Madam Jansen, there was a good question. I appreciate the question about the public interest. As I was listening to that excellent question, I was reflecting that it would perhaps depend on the situation, context or regulation. I guess “in the public interest” would not necessarily be the same, based on whatever it is we're examining or studying. Would that also be a fair conclusion?

Jenelle Power :

I think that's fair. Obviously, the legal experts doing the drafting provide their expertise on what the best wording is, but the reality is that different sectors might use this. Agriculture is going to be very different from transport or bringing a new medication to the market under Health Canada. They're very different realities. The legislation did have to be crafted to ensure that those realities were taken into account while not creating additional barriers or red tape to using it because we were too prescriptive in how it was written.

Pauline Rochefort :

We read a lot about Canada's productivity. They compare us with the United States and how, sometimes, we're slow as a country to bring innovation forward. In a certain sense, I view this framework as one that provides Canada with an ability to move a bit faster. Would that also be a fair statement?

Jenelle Power :

Absolutely. It definitely provides an easier way to get innovative products and processes to market faster, get them tested and get that permanent regulation made. It's not the right tool for every situation, though.

Pauline Rochefort :

No.

Jenelle Power :

We have multiple tools in the tool box, but this is one very good tool we could use.

Pauline Rochefort :

I mentioned that this is innovation within the government to some extent, but it is becoming increasingly a practice in the United States and across the world. I was surprised to find regulatory frameworks in other jurisdictions. You talked about Japan and the United Kingdom, and the list can go on. It's in private industry and Canada's financial sector. There are all kinds of examples out there. Would that also be a fair statement?

Jenelle Power :

Absolutely. There are quite a few international examples. Some countries apply them quite broadly, like we're doing, so that all sectors can take advantage of and use these authorities. France, Germany, the U.K. and Mauritius all have these broad authorities. Then there are a number of countries that specifically target AI with their use, so something like the EU, which has 27 member states.... There's also Brazil and Colombia. Lots of countries are taking advantage of this approach.

Pauline Rochefort :

I would say, as we come around this table, my sense is that we're all in favour of Canada's moving faster. I can't see anyone not being in favour of that, but I can certainly appreciate some of the concerns. One I have that I'd like to ask about is—

The Chair :

You can have just one question.

Pauline Rochefort :

—if a minister can supersede a conflict of interest requirement, for example.

Jenelle Power :

No. First of all, a minister can grant an authority only to the legislation and regulations under their own portfolio. Second of all, for the conflict of interest, for example, that would be the President of the Treasury Board, and an exemption under that authority wouldn't fit within the guardrails that are baked into the legislation. As I mentioned, to make a future regulatory change, all the pieces that are required to make a regulatory sandbox—not just a broad exemption—wouldn't meet those criteria, so you could not make an exemption under the Conflict of Interest Act.

[ Translation ]

Pauline Rochefort :

Thank you.

[ English ]

The Chair :

Thanks very much. We are going to suspend in a couple of seconds to bring in our new witnesses. Before you go, I have a couple of questions, if you don't mind. On the exemption under public interest, will the justification of the public interest or the evidence behind granting it be published as well, as part of the other publications that you've stated will be public every year?

(1620) Brennen Young :

Whenever a minister makes a decision to—

The Chair :

I'm sorry. We're really short of time. It's a really straightforward question. Would the justification be—

Brennen Young :

They would have to justify the rationale for their decision-making.

The Chair :

Will it be published with the other reports, though?

Brennen Young :

The minister responsible for the exemption would be the one to publish the decision for the rationale.

The Chair :

Is it required to be published, that justification for public interest?

Brennen Young :

Yes.

The Chair :

Perfect. Publicly, yes?

Brennen Young :

As part of the exemption order, yes.

The Chair :

Thanks. How many people are in the new red tape office, please?

Jenelle Power :

We can't share.... I don't think we can speak to the numbers.

The Chair :

What are you trying to hide? You don't know or you won't tell me?

Jenelle Power :

We can't speak to staffing and those sorts of pieces.

The Chair :

Maybe you can get back to us, then. Is that something you can do?

Jenelle Power :

Yes, we can follow up.

The Chair :

That's wonderful. Thanks very much. Do you have strict directions about red tape reduction? One of the things in government that goes back a long time is the one-for-one rule. I'm always curious and I'm wondering how your department will handle it. If it's one for one, before you bring in a new regulation, you're obviously going to have to find an old one to eliminate. If you're going to eliminate it, why are you waiting for a new one to come in? That is not you specifically, but the bureaucracy. Why does it take us having a new regulation before we go hunting for an old one to eliminate? What is being done to eliminate this raft of stifling regulations on our economy?

Jenelle Power :

The one-for-one rule is meant to help manage regulatory burden and prevent it from increasing, but it's not the only time that regulators look to remove unnecessary regulations.

The Chair :

Maybe you can get back to us on how many regulations have been axed in the last year and in the year before. I have a lot more questions, but perhaps I can provide them in writing to your office and go from there. Thank you for being with us. We're going to suspend for five minutes to bring in our new witnesses. Thanks very much.

(1620) (1625) The Chair :

Welcome back, everyone. Thank you for your patience. We're starting round two with some guests from the Public Service Alliance of Canada. Welcome to OGGO. I think this is your first time with us. We've had PSAC in the past. I understand you have a five-minute statement. The floor is yours, please.

Sharon DeSousa (National President, Public Service Alliance of Canada) :

Good afternoon. Thank you for inviting me to appear as part of your study on Bill C-15 . I'm grateful to be joining you today from the Anishinabe Algonquin territory. I thank them for allowing us to be here today and for being the custodians of this land. As a visitor to this land, I commit myself to put truth, reconciliation and decolonization at the centre of our work. I also want to take a moment to wish everyone a happy Black History Month. My name is Sharon DeSousa and I'm the president of the Public Service Alliance of Canada.

PSAC is Canada's largest federal public sector union, representing over 180,000 federal public service workers who deliver vital services that make Canada more resilient, inclusive and responsive to the needs of its people. However, the recent budget threatens the ability of the public service to provide these services. The decision to slash the jobs of 30,000 workers who deliver critical programs hurts workers, families and communities across the country.

In the last two months, nearly 10,000 PSAC members across the federal public service received workforce adjustment notices warning that they might lose their jobs. People across Canada are being kept in the dark on how these service cuts will impact them. Cuts to public services aren't what people want or what Canada needs. This is why I'm asking the federal government to stop these reckless cuts and to work with PSAC and other unions to find other cost savings that don't involve slashing our critical services and cutting thousands of jobs.

I'd like to turn my attention to two issues that I believe are of interest to this committee. The first, commonly known as “25 and out”, will make changes to the Public Service Superannuation Act, allowing public safety workers to retire with dignity after 25 years of service without penalty. For decades, PSAC has been fighting to see this change made so that frontline border services staff, firefighters and other public safety officers are treated the same way as those at other law enforcement agencies across Canada. This is a long-awaited change for workers.

It finally recognizes the commitment and sacrifices these workers make every day to keep Canada safe. We're glad to see the forward movement on this issue. Despite this progress, there are still workers who are being excluded from this program. Fisheries and wildlife officers, park wardens and others have not been deemed eligible for equitable retirement despite having clear public safety responsibilities. Once this legislation has passed, we ask for a review of this program with the intention of having it apply to these excluded groups.

The second issue I would like to address is the proposed early retirement incentive. To manage cuts to the public service, the federal government has announced a new early retirement incentive, or ERI, that would allow eligible employees to retire early without penalty. To date, as many as 68,000 public service workers have received notice of ERI's existence, but no other information. Under our collective agreement with Treasury Board, the employer has an obligation to make every effort to ensure that any reduction in the workforce is accomplished through attrition.

PSAC understands that ERI can play a role in preventing involuntary layoffs. However, similar incentives already exist as part of the workforce adjustment appendix that is embedded in our collective agreements. The appendix was won through hard-fought negotiations at the bargaining table and it must be respected. ERI does not provide the same entitlements as what is already established in our collective agreements, such as lump sum payments based on years of service, and it risks implementing a weaker employment transition process than was previously agreed to. This is not acceptable.

Any early departure program shouldn't sidestep the employer's contractual obligations and must be integrated into the current negotiated process.

(1630) Bill C-15 will enact significant changes for public service workers. Pension reform has been a long time coming, and we congratulate the government on moving this forward. PSAC is ready to work with the federal government to improve the ERI program. Thank you.

The Chair :

Thank you very much, Ms. DeSousa. We'll start with Mr. Patzer. You have six minutes. Go ahead, please.

Jeremy Patzer :

All right. Thank you very much, PSAC, for being here. We appreciate your taking the time. Just off the top, are you expecting any layoffs at agencies, such as CBSA?

Sharon DeSousa :

We do not know what the plan is for most departments or agencies. We receive notices when the decision is made. There's no consultation. I would say, though, that notices have been received.

Jeremy Patzer :

Are any of those for frontline employees, such as border agents?

Sharon DeSousa :

We have people in various positions. What I can tell you is that the frontline officers don't work in silos. They have a team of other workers in administration and also support staff who enable them to do their jobs. I'll turn to my colleague, Liam, to see if he'd like to add anything.

Liam McCarthy (Director, Negotiations and Research Branch, Public Service Alliance of Canada) :

There have been some cuts to frontline workers certainly, especially in some areas. At IRCC there would be a lot of immigration processing, for example. There have been significant cuts there, where a significant backlog exists. It is possible that we'll see further cuts at places like CBSA and even the Department of National Defence. On net, I think they will grow, but it is possible that we will see cuts at the same time as places are expanding. I've even heard some reports that there are some positions being cut in areas where they're also engaging terms in the same kind of employment facility. At any rate, there's a number of different things happening at the same time.

Jeremy Patzer :

I mean, 1,000 new CBSA personnel or employees is the promise from the government. Correct me if I'm wrong, but I think it is the position of the union that those should be frontline employees, border agents, who should be hired, and not such a broad term used for who they're hiring. It's the frontline employees we actually need more of. I have heard a lot of concern from constituents about the lessening of border services and also the potential closures of border crossings. Are you hearing any of those concerns? Are you concerned about any of that going forward?

You're kind of getting a mixed signal: Oh, we're hiring 1,000, but then we're giving layoff notices. Are you concerned about the potential for any border points of entry to be closed?

(1635) Sharon DeSousa :

Thank you for that question, because there are ports that have been closed. In terms of some of the smaller ones in the Prairies, I can tell you that this has an impact on communities. For instance, I'll just say that in rural Saskatchewan, where people are trying to get their goods across the border, they have to detour and go farther in order to cross the border. I can also say that in terms of frontline workers, yes, there is a dire need. There hasn't been staffing up. We're talking about going back to Stephen Harper's time. There is a dire need. There's also competition for those same officers.

RCMP is recruiting as well. You were talking about the Department of National Defence. Where do these recruits come from? They're from the same category of people. It takes a lot more for them to go through Rigaud, which is the training program. If there's one piece that they do not pass, guess what? They're kicked out of the program. There's a recruitment and retention issue. There's a small group that you can actually pull from. Keep in mind that your provincial and municipal police services also recruit from the same group. It can't be done in isolation.

As I mentioned, you need the support workers to assist them as well.

Jeremy Patzer :

We heard in the previous hour about the sandbox provisions for regulations to be potentially changed or repealed, depending on the outcome of the sandbox time. Are you concerned at all about technologies or applications coming into force that would actually cause the replacement of a person working at a border crossing in favour of a piece of technology? We know that there's the Chinook digital system, but are you concerned about there being any changes coming that would allow somebody to not physically be present but to just roll up, scan an app and then come into Canada? Are you concerned about that?

Sharon DeSousa :

I think if this government is really talking about security, you cannot depend on any kind of program or AI. You have to have a border service officer. The training they have is invaluable, and I can tell you that AI won't detect things that a human being will. My concern is that we've already started. When we saw those machines come into the airports and started being used, we already lessened our security.

The Chair :

You have 10 seconds.

Jeremy Patzer :

That's good, thanks.

The Chair :

Ms. Rochefort, please.

Pauline Rochefort :

Thank you very much. Hello, it's nice to meet you. What has been your experience to date with the special benefit? I guess it was only available to Correctional Service Canada employees who worked in federal correctional facilities. Would that be correct?

Sharon DeSousa :

That is correct. A similar provision is provided through provincial and municipal police services and firefighters.

Pauline Rochefort :

That's good to know. Thank you for sharing that. Is that a benefit that...? To what year does it date? Do you know?

Sharon DeSousa :

I can't comment on that. I'm looking to my colleague, Liam.

Pauline Rochefort :

I'm just interested in knowing if that's a benefit that you advocated for. I'm not sure if we'd define it as a benefit or....

Sharon DeSousa :

The provision “25 and out” is a long-standing provision to recognize the situation frontline workers are put in—the stress, the mental health impact and the exposure to carcinogens. For instance, I'll speak to our firefighters. If you look at a lot of retired firefighters, by the time they reach the age of 65, or after 35 years of service, you will see that the impact on their mental health as well as the exposure to these toxins have in fact shortened their life expectancy. A lot of those I'm aware of have developed cancer or have passed away within a very short period of time.

(1640) Pauline Rochefort :

Was early retirement something you negotiated for Correctional Service Canada years ago?

Sharon DeSousa :

It was many years ago. I'll turn it over to Liam to speak to it a bit more.

Liam McCarthy :

I believe it was around 26 years ago that PSAC would have negotiated it for basically everybody who works in corrections offices and parole offices across the country. We've been advocating ever since then for it to be expanded to a number of other occupations, because the Income Tax Act was initially amended to allow that expansion across jurisdictions. It named firefighters and other public safety occupations. We've been trying to get the federal government to play catch-up ever since.

Pauline Rochefort :

This is a direction that you support. You understand the rationale, and you're able to defend it. Moving forward with the implementation, are you comfortable with communicating and engaging with your members in discussing the various early retirement options or workforce adjustment programs that are available to them?

Sharon DeSousa :

I need clarification. Are you referring to “25 and out” or the early retirement incentive?

Pauline Rochefort :

I'm referring to “25 and out”.

Sharon DeSousa :

On “25 and out”, I can tell you without a doubt that our members want pension reform and have been lobbying hard for it. I don't think there's one MP who hasn't heard from us in regard to this. I think it's long overdue, and I will tell you that it will help with recruitment and retention.

Pauline Rochefort :

It's good news for your organization and for all the members.

Sharon DeSousa :

Yes.

Pauline Rochefort :

I'm good with that. Thank you so much.

The Chair :

Next is Madam Gaudreau.

[ Translation ]

Marie-Hélène Gaudreau :

Thank you, Mr. Chair. Ms. DeSousa, I'll tell you something, because I'm quite concerned. I'm delighted that, after 26 years of fighting, you have prevailed. Moreover, I'm trying to draw a positive correlation between workforce reduction and service improvement. The maintenance of our current services is inefficient. I'm telling you. I've been a member of Parliament for six years, and things have gone from bad to worse in recent years. Some days, I feel like a branch of Service Canada. That's to say nothing of the pandemic. This afternoon, I feel like a branch of the Canada Revenue Agency.

In addition, as the veterans affairs critic, I'm the gateway to helping the department. How is this possible? We understand that we can have tools to help with speed and efficiency, but how is this possible? We're talking about 30,000 people in the public service. Does this mean that, ultimately, the number of potential contracts awarded outside the government will grow exponentially? Where do you stand on this?

[ English ]

Sharon DeSousa :

I can say to you without a doubt that the work isn't going to go away. We've seen this happen under various governments. What has resulted is longer wait times, issues where people are not getting the services they need, and then a band-aid solution is created. They hire a bunch of terms, casuals, to bridge that service, and we end up in the same place. Cutting right across the top does not work. What you need to do is look at each and every single program and what you need for it to be successful.

We saw this recently at Canada Revenue Agency when they got rid of a whole bunch of terms who worked in call centres and then indeterminates. The result was a 4% service.... It was 4%. This is the agency that brings the money into the country. There's a problem when cuts happen across the board and there's no coordination. They're done by the deputy heads. That is my concern right now, because what will end up happening.... A multitude of notices are going out. People don't have information. They're expected to compete for jobs, but what are the jobs they'll be doing?

We won't find out until after the fact when the dust settles. That's not a good way to manage.

(1645) [ Translation ]

Marie-Hélène Gaudreau :

I would like to point out that I didn't talk about all the immigration cases. Since members of Parliament were no longer able to manage the immigration cases, the House of Commons authorized a group of MPs—10 of us—to access a telephone line to try to understand where things stood with the process. There are 10 of us MPs who paid for this out of our budget, which is really quite limited. We have a resource that replaces the department and that gives us privileged access to people's cases. The cases could involve family reunification, and the delays are considerable. This situation is unprecedented.

Lastly, I would like to know what type of consultation should take place as part of a radical workforce adjustment or an allocation or streamlining process but also as part of regulatory sandboxes, where conflicts of interest aren't considered serious. In terms of the public interest test, even if it's only around 1%, it's in the public interest. Should you be consulted? Have you been consulted?

[ English ]

Sharon DeSousa :

There has been no consultation with any of the unions. I would say that you'd want to consult with the workers doing the job first to find out what their day-to-day is but also to consult with your stakeholders, because there's community that has investment in the decision-making. We talk about IRCC and the cuts there. I can tell you that, right now, we're looking at about 3,600 cuts to immigration, and more are on the way. The numbers have increased. This is just one department. I'll talk about the Canadian Food Inspection Agency. They're getting rid of 20%.

They weren't staffed up during former prime minister Harper's time. There was a reduction, and nothing has happened. These are the people who take care of our food safety. Three research centres will be closed, in Guelph, Lacombe and Quebec City. There is something wrong in how this is being managed. Just look at Health Canada and the cuts that are currently happening to the regulatory operation and enforcement branch.

The Chair :

Thank you very much. Mrs. Jansen, go ahead, please.

Tamara Jansen :

Thank you. This bill, as I understand it, expands early retirement options to government workers, including frontline roles like border service officers and correctional officers. This is at a time when Canadians are asking for stronger borders and safer communities. Mr. McCarthy, do you believe that these incentives will lead to experienced frontline personnel leaving early and reducing our operational capacity?

Liam McCarthy :

That's one of the challenges with the way the early retirement incentive appears to have been rolled out. It's not clear what the scope is. About 68,000 people received letters telling them they might be eligible. We don't know what that means. It would make more sense if it were the same universe as those areas that were being cut so that it would mitigate some of those challenges. There continue to be quality problems for CBSA. It takes a fair amount of time and training at Rigaud to become fully trained.

Instead, they give a significant amount of duties to student workers at the Montreal, Toronto and Vancouver airports. They may only get a couple weeks of training, so there's a real concern about the level of quality there. The government could also be doing more in the areas in which it said it will invest. It's not doing everything it can to retain employees in areas being cut to move them into other areas that it's looking to expand. There are significant opportunities to retain a lot of talent there. People are already security cleared, which takes a long time.

The Department of National Defence especially is going to have a real challenge in that way. The government is not doing all it can to make sure there's a seamless transfer within such a large employer so that talent is retained.

(1650) Tamara Jansen :

We keep hearing that we're going to hire another 1,000 CBSA officers because of the crackdown on smuggling. I live on the border and I'm stumped. We're going to hire 1,000, but we're going to lay off 68,000. How does that work? When you say 68,000 letters, is that just CBSA or is that everybody?

Liam McCarthy :

Those are people who are actively part of the superannuation plan and could potentially retire early based on the provisions of the early retirement incentive. The challenge for us is it starts off making it sound like you're entitled to it, but then the fine print says your department might not give it to you. It seems arbitrary. We still don't know what it is, and it's overlapping with these somewhat complicated workforce adjustment layoff processes at the same time. One of our biggest concerns is that people might make the wrong decisions. It's not clear who will actually be accepted.

It's not clear whether people, in some of those areas where they're saying they're going to expand, will actually have the opportunity, even though they've been given letters suggesting they might be entitled to such a thing.

Tamara Jansen :

You've maybe already answered this question, but I'm still going to ask it. First of all, early retirement packages let people leave earlier without the usual pension hit. That's what I understand from this, but that money doesn't come out of thin air. It comes from the public pension pot, which is funded by taxpayers and future workers. Do you have an estimated cost for these early retirement packages? Has anybody mentioned anything?

Liam McCarthy :

The estimate in the budget was $1.5 billion. For the early retirement incentive on its own, the money would come out of the joint contributions from workers and the money that's accumulated in the pension plan. That's different from the last set of cuts we saw under Harper. Normally, when an employer is looking to lay off a large number of employees, there's money that is transferred into the pension plan, if they're giving early retirement incentives, in order to shore it up. You pay out some money to people to mitigate them losing their jobs.

Here, the pension is in such a good surplus position that the government has decided to raid that surplus to pay for it, as opposed to the Harper government, which kicked in, I think, about $3 billion in the last year—

The Chair :

I'm sorry, but we're past our time. We'll go over to Ms. Khalid for five minutes.

Iqra Khalid :

I have a question with respect to the PBO. It published a report last week, which stated that in the majority of cases, the savings that would be realized with these measures would have “minimal or no impact on service levels.” Can you help me in reconciling where that disconnect is? As Madam Gaudreau also said, if the levels of staff right now in these frontline service providers, like IRCC and CRA, are already not doing that great.... In fact, I have anecdotal evidence where people are actually sending people, our constituents, to MP offices to get service instead of doing their jobs at the front lines.

How do you reconcile the PBO's report versus what you are saying versus what we're seeing on the ground? That question is for Mrs. DeSousa, please.

Sharon DeSousa :

First, I want to say this. It's remiss of me not to say it, but it's been almost 10 years since the government contracted out our pay system, Phoenix, to IBM. It's cost taxpayers over $5 billion.

(1655) Iqra Khalid :

I don't think that's aiming at the question that I've asked.

Sharon DeSousa :

If I could just finish, I'll say that we know, at the end of the day, when we contract out work, the work doesn't change. Are there improvements needed with the service levels? Yes, without a doubt. However, you need to look at the service; you need to streamline and you need to figure out where and what needs to be done. We haven't been resourcing certain departments. We haven't been putting in the infrastructure, the money or the time. The expectation is output. I would say that you have a contracted study that's talking about cost savings, but what do they know, really, about processing? The Government of Canada takes care of its people.

Iqra Khalid :

I don't have a lot of time left and I don't think you're really understanding what I'm trying to get at. I'll just pivot a little bit here. What systems does PSAC and its smaller component unions have to ensure that your members are able to raise their concerns about any grievances or workplace measures that really hit at the efficiency standards that we're trying to achieve?

Sharon DeSousa :

PSAC is here to protect our members' rights within the workplace and make sure they're healthy and safe. In terms of various issues in the workplace, we have union reps who deal with those issues with the employer, if there are issues. The service levels are the responsibility of the employer and, when consulted, we are happy to provide input into their day-to-day processing. However, the union is not there to do the work of the employer.

Iqra Khalid :

Do you not proactively work with your members to make sure they're provided with the proper resources from their employer? I'm trying to understand what the recourse steps are. Let's say I'm a member of your union. How much in fees would I pay, by the way, on a monthly basis?

Sharon DeSousa :

That would depend on your classification and where you work.

Iqra Khalid :

Can you give us a ballpark figure?

Sharon DeSousa :

We have members who would pay a minimum of $40 or higher. It's difficult to say. To answer your question, first of all, it's our role to make sure you have what you need to do your job effectively and safely in the workplace.

Iqra Khalid :

My question is, how do you do that? What kinds of mechanisms do you have in place to proactively say there may be an issue and then say what you are going to do to help support the public service? I just want to know what role you play. Is there an executive committee that sits? Is there a complaint body that takes on active complaints from members? Help me understand how that works and what role you play in making sure that the public service is well represented and that their grievances are dealt with.

Sharon DeSousa :

When there are issues in the workplace, we have what's known as union-management consultation committee meetings. If there's a problem with the onboarding of a group of people—because it would be groups that are trained—we may provide notification that there are problems in certain areas. The ultimate responsibility is the employer's. It's their responsibility to make sure it happens. We advocate, and we enter into formal communication with the employer if it's required.

Iqra Khalid :

That's understood. I really want to focus on the public—

The Chair :

I'm sorry but we're past time. Do you have a quick question?

Iqra Khalid :

No, it's a long one. I'll send it in writing.

The Chair :

That's perfect, or perhaps Ms. Rochefort can do it. Next is Madam Gaudreau, please.

[ Translation ]

Marie-Hélène Gaudreau :

Thank you, Mr. Chair. Ms. DeSousa, I wrote a “yikes” for national defence during the discussion on seamless transfers and preparing for what comes after. I sit on the Standing Committee on Veterans Affairs. We hear a great deal about the increase in defence spending, even though some veterans, many of them, don't have what they need in terms of access to services. It's truly frightening. I understand that, when we're a minister, or even when we form the government, we're just passing through. We represent the electorate of the time. That's our democracy. The position of deputy minister is more permanent.

I gather that information must be provided beforehand to show newcomers how things work or how they should be. I think that people often think of the minister, but the department is the deputy minister. I wonder. The minister in question didn't consult you. However, what about the deputy minister of each department, who has the right to make decisions in a legitimate and unbelievable manner? Were you consulted?

(1700) [ English ]

Sharon DeSousa :

There were no consultations done with the union. What we did proactively is provide a document on how to do cost savings within the federal public service and look at alternative ways that the government can do it.

[ Translation ]

Marie-Hélène Gaudreau :

We're running out of time. However, I would like to ask you whether you can provide the data in your possession. I know that you have a number of things that you could give us. That would be useful, because I need data. I meet with public servants who tell me that they have plenty of skills. However, unfortunately, their skills aren't being fully used. Do a high percentage of public servants feel this way, yes or no?

[ English ]

Sharon DeSousa :

I would say so.

[ Translation ]

Marie-Hélène Gaudreau :

Thank you.

[ English ]

The Chair :

Thank you very much. Next is Mr. Gill, please, for five minutes.

Harb Gill :

Thank you, Mr. Chair. Thank you to the witnesses for being here. To correct the record, PBO did not claim that there's not going to be any impact to the cuts. It was the departments that were making the cuts that made that statement. Is that correct?

Sharon DeSousa :

I would look to my colleague.

Liam McCarthy :

Yes. That definitely makes more sense.

Harb Gill :

Okay. It makes more sense.

Liam McCarthy :

I would add that this is the same kind of wishful thinking we had around Phoenix when it was suggested that even though they were cutting 1,500 compensation advisers at the time, there would be no impact on services. I think this is the same type of wishful thinking regardless of who is saying it.

Harb Gill :

The second question I have is, do you have any control over rules or regulations written by any department that your employees or your fellow workers are supposed to be enforcing? Do you write policy, in other words, as PSAC?

Sharon DeSousa :

In terms of PSAC, our members do not write the policy. We enforce it.

Harb Gill :

Exactly. Thank you. I come to this from 30 years of being a public servant as well. I didn't write policy; I simply enforced it. From your perspective, what practical changes could the government make right now with regard to rules or regulations to manage costs without breaking morale and losing the expertise or hurting Canadians?

Sharon DeSousa :

Thank you for that question. It's quite easy. It's simple. First of all, embrace remote work. I say this because we have expensive leaseholds and buildings that needed to be retired long ago. There are major problems there. We know that's the next phase of work, if you were to embrace it. People are more productive and are able to do that. I would also say that right now the government has a lot of contracts. They contract out a lot, and they do subcontracting. We could do it cheaper in-house without a doubt. Do I believe that restructuring is needed to look at the programs?

Yes, but you need to look at it on the basis of how we deliver the services and what's required instead of looking at just cutting from the top.

Harb Gill :

When those permanent positions are cut and consultants are brought in, what does that do to the morale for folks at PSAC?

Sharon DeSousa :

I can tell you that our members' mental health is suffering. There's a lot of chaos out there. We're talking about those 68,000 letters that were sent out. By the way, I got one, so I can tell you what it says. It does not explain what it is: You have this entity sitting there that's an option, but you don't know what it is. Then, you receive a letter. There may be 12 jobs that are affected, but there are 200 people receiving letters. Does that make sense? Also, in order to get early retirement, it has to be through the deputy head. They have to okay it.

This is something they want, so why are they putting something in front of them, creating fear and impacting people's mental health? It just doesn't make sense. It's creating a toxic work environment.

(1705) Harb Gill :

It seems they want to send you packing, send you home, but you're not leaving any time soon, it seems. When a public servant leaves and the job isn't filled, what happens to the work the next day? From what your members are saying, is the workload actually reduced when the position disappears, or is the same amount of work being done by fewer people?

Sharon DeSousa :

The same amount of work is being done by fewer people, and it develops a backlog. What ends up happening is there has to be a solution. The solution is that they're going to focus on getting rid of a part of the job position, blitzing it and putting resources to it. They hire term employment, casuals, to come in, but it takes time to train them, and so the backlog continues to grow. Then they look at other options, such as contracting out or privatization, which is more costly.

Harb Gill :

How is that impacting the end recipient, the Canadian on the phone or attending your office? What happens to him or her?

Sharon DeSousa :

They wait. They wait, and they suffer. I will tell you, we've seen the lineups down the road for passports. We've seen employment insurance benefits not being provided. We saw it when two Veterans Affairs offices were closed. We've seen how this works. I'm just disappointed because we could do better.

Harb Gill :

I know that AI is being used, or looked at, significantly by the government to look for or find efficiencies to reduce the workload. Are your members being trained, consulted or protected as AI is introduced? Are these tools being rolled out first, with workers expected to absorb the risk and the public blowback if things don't go—

The Chair :

We are past our time. Perhaps we'll have one more short intervention after that, and we can get a response then. We'll go to Ms. Rochefort, and then we're going to do three two-and-a-half minute rounds to finish up.

Pauline Rochefort :

I went to look at your website to read your charter, and it is very clear that you strive to enhance your members' quality of life. You have been at the forefront of a variety of significant and successful campaigns. Today we just spoke about the expanded early retirement for operational services employees, and congratulations on that. That is significant, yes. Coming back to the issue of early retirement, ERI, as you call it, you mentioned there had been no consultation, but, at the same time, there was an election.

Canadians have mandated the government to return the federal public service population to a more sustainable level. That formed part of the campaign issues that were discussed. Do you view the workforce adjustment provisions that are proposed as being in keeping with your charter, in which you speak about quality of life?

Sharon DeSousa :

There are two parts to this. First of all, there's a mechanism in our collective agreements that our members fought for and negotiated, and it's very clear. It's transparent and fair, so there is that. I can guarantee you that no one voted on election day to say they want early retirement incentives and to use a surplus out of our pensions to fund it. In terms of looking at this from a larger perspective, I understand that decisions have to be made, but they don't have to be made by sacrificing the worker or the service. The question is, how do we move this forward in a good way?

How do we consult and make sure there's minimal impact on the public? At the end of the day, it will be those who reside in Canada and who depend on those services who will be impacted.

Pauline Rochefort :

Those are good points. At the same time, there are limited options, as you pointed out. I was just reminded of an

article I recently read in a Canadian human resources periodical, which spoke about workforce adjustment programs and early retirement programs. They're considered a more humane approach. Years ago, I was involved in administering an early retirement program in my organization. There was a public discourse. At the same time, I found that when I spoke one-on-one with employees who were opting for the voluntary early retirement initiative, they were, in fact, supportive. I was surprised. Do you feel there's a double discourse out there among your members, from a public union perspective? Maybe the members feel differently.

(1710) Sharon DeSousa :

Right now, I think our members are confused. They don't know what their rights are. That's the real issue we have here. We won't know what's involved in the early retirement incentive until actual language is developed. My concern is the fact that we have that chaos out there. If people would like to retire, that's a personal choice. The real focus has to be on what work is being left behind and what service is not being delivered.

Pauline Rochefort :

At some point, you will have a role to play in communicating with your members. Are you organizing yourselves to be in a position to support and equip your members with the necessary information?

Sharon DeSousa :

We are without a doubt. I can tell you that we've developed an animated video—

A voice: [ Inaudible—Editor ]

Pauline Rochefort :

That's a member of the union, I think.

Sharon DeSousa :

—that explains workforce adjustment and the rights of our members. We've had telephone town halls. We have trained every single one of our activists to have those conversations. We have a whole portion of our website on this. We have national and regional town halls. We have done everything in our power to make sure our members know their rights prior to making a decision.

Pauline Rochefort :

They're being informed about their rights. You're doing a good job of that.

Sharon DeSousa :

Thank you.

Pauline Rochefort :

Many members eligible for early retirement may hold senior or specialized positions. I'm interested in what risks you see to service delivery or institutional knowledge. What measures would you expect the federal government to put in place to ensure that those risks are managed responsibly?

The Chair :

You have about 25 seconds for the answer.

Sharon DeSousa :

At the end of the day, it's the deputy heads who have control in terms of who will receive an early retirement incentive or a notification. It's the deputy heads who are responsible for managing that risk.

Pauline Rochefort :

I want to mention that 12% of targeted early retirements are senior executive positions, I believe.

Sharon DeSousa :

That's right.

The Chair :

Thanks. We'll go back to Mr. Gill for two and a half minutes. Then it's Ms. Khalid for two and a half. We'll finish with Madam Gaudreau for two and a half.

Harb Gill :

I apologize to Ms. Rochefort for jumping in. I've been a union member for 30 years, so I couldn't help it.

[ Translation ]

Pauline Rochefort :

That's fine.

[ English ]

Harb Gill :

I'll go back to the original AI question, Ms. DeSousa. Your members are being trained. Is that fair to say? Are they being consulted and protected as this AI is being rolled out? Are the tools being rolled out first, and then they look at any efficiencies? If things don't work out, who's taking the blame if there's blame to be assigned? Are your folks—the public-facing people—getting the blowback?

Sharon DeSousa :

Regarding artificial intelligence, it depends on the department. Various tools have been introduced. I'm all in favour of making our members' jobs easier, but the tools cannot replace the person. That's our perspective. What I can tell you, in terms of consultation, is that we have been notified as to what some of those tools are. In some cases, departments have, in fact, just introduced them. Are they co-developed? Is there feedback? It varies from department to department and agency to agency.

Harb Gill :

If you had to guess a percentage, what would you say is the amount of consultation that's happening or not happening?

Sharon DeSousa :

Oh, boy, that's a tough one. Like I said, it depends on the department and agency. Percentage-wise, I couldn't give you that because it varies so much. There are some that are very consultative and others that aren't. That's problematic.

Harb Gill :

Who has been most consultative, and who has been the least consultative?

Sharon DeSousa :

Oh, boy. I'll use Phoenix as an example. We attended meetings and told them there were problems with the Phoenix program. We were in meetings for years. They kept delivering presentations. We provided feedback with the issues. They launched it in 2016. We told them there were still problems. They got rid of the backup data, which meant that we had no system to go back to. Like I said, it depends on the department and the agency. That would be, probably, the worst of them all.

(1715) Harb Gill :

You said that it cost us $5 billion.

Sharon DeSousa :

It was $5 billion plus, because we're still not finished.

Harb Gill :

Thank you. I'll give up the rest of my time.

The Chair :

Ms. Khalid.

Iqra Khalid :

That was very generous of you, sir. Despite there being real disagreements, as you've outlined, among the public service, your office and the government, do you think there are areas where the government and PSAC are aligned to better provide support to your members and to the public service as well?

Sharon DeSousa :

Without a doubt, I can tell you that we have been presenting different ideas and have been providing feedback. In some cases, that feedback is taken, and in some cases, it's not. It's the employer who has the right to manage, after all. We would like to work together for the betterment of not only our members, but also all who reside in Canada, because that's the ultimate client. We want to do better. The question is, what is true consultation? That's the real problem. We are told information. There's a lack of consultation.

Iqra Khalid :

I appreciate that. You have different jurisdictions across the country. You are federal. Do you also work with provincial counterparts or provincial public service in terms of best practices or things to watch out for so that you can learn from each other, etc.?

Sharon DeSousa :

Without a doubt, yes. We do have members who fall under provincial and territorial legislation. When the federal government acts, we see a domino effect provincially and territorially. We do have other affiliates that we work closely with.

Iqra Khalid :

Thank you. Those are all the questions I have.

The Chair :

Thanks, Ms. Khalid. Madam Gaudreau, please go ahead.

[ Translation ]

Marie-Hélène Gaudreau :

I'll quickly go back to the decision‑making flowchart. I've never had a job in a department. My only experience is in business and in managing my own money and doing what I want with it. However, being a member of Parliament means working with public funds and deciding how to use them wisely. This brings me to the subject of our discussion, which is regulatory sandboxes. Unless you tell me otherwise, a deputy minister has a great deal of power and control over the ability to allocate and make proposals. The minister can, by decree, opt out of some of the measures that we're talking about today.

How does this affect the current workforce? Not only is there little or no consultation, but they don't know whether they'll keep their jobs. Moreover, they're wondering how much say they have in what happens. If there are cuts, are they supposed to think that this is just how things go?

[ English ]

Sharon DeSousa :

We know from working in the federal public service that there is a political vision, a political priority that's done, and that transitions down through the various ministers and then to the department heads, without a doubt. Over the last little while, we've decentralized the decision-making. That means departments and agencies are often working in silos. There is no consultation happening across the board. What makes it difficult is the departments and agencies, for example, have more autonomy, and then there isn't that safeguard.

Using the national, for instance, the Treasury Board Secretariat and the Public Service Commission should have oversight over the departments. In the past, we were able to do this type of consultation by dealing with the Treasury Board, and they would be able to look at the full public service as a whole and see the impact to it. They would be able to say, “Okay, there's a vision here.” Now you don't have that.

(1720) [ Translation ]

Marie-Hélène Gaudreau :

Thank you.

[ English ]

The Chair :

Thank you very much. Before I excuse you, if you don't mind, I'll ask a couple of quick questions. Were the 68,000 letters you mentioned that were sent out about early retirement a requirement of your collective agreement, or was it a policy decision to blanket it out?

Sharon DeSousa :

That was a policy decision.

The Chair :

Okay. I think you mentioned 40,000 jobs. Do you have a breakdown of contracts and indeterminates, and how many are expected to be through attrition?

Sharon DeSousa :

It's 30,000 jobs over the next three years. There were 10,000 that happened in 2024. They looked first at the term employees, and then they looked at indeterminates. In terms of the future and the next three years, we're not given that visionary piece. All we're given is 48 hours' notice of when to expect notices that will go out to our members.

The Chair :

Okay. Thank you very much. I appreciate the responses. You are excused. You're welcome to hang around for five minutes while we talk about our upcoming schedule, but I assume you have better things to do. Thank you for being with us today. Colleagues, this will be very quick. Before we excuse ourselves, on Thursday, we have the Information Commissioner. For the last half an hour or so, we're going to go in camera for a discussion on how we wish to proceed with all the information we got from our Bill C-15 study and how we want to present it to FINA. We will discuss that among ourselves informally in camera.

On February 10, in the first hour, we have the President of the Treasury Board on this issue, and then Mr. Guzman is back with us with Secretary of State Fuhr for that delayed study. On Thursday, February 12, we're back on Bill C-15 , like today. The first hour is going to be with Minister Lightbound and his officials. On the 24th, we will wrap up the Bill C-15 study with the president of Canada Post. There's another issue.

If you remember the letter that came from FINA, as well as the motion that was passed, it asks that we hold a meeting about “ethical, accountability, and transparency implications of Division 5” of the Red Tape Reduction Act, “including issues related to regulatory authority, governance, public oversight, and integrity in federal administration”. I do not know who wrote that. What they've asked of us is separate from today's meeting. That was part of the motion.

I'm going to suggest that we do it in the second hour of February 12, and that for this study, each party put forward one witness they would like in this one hour. Is that clear? Excellent. You could get back to us by February 5. I think that's all we have for now.

An hon. member: Is it for the end of day on the 5th?

The Chair: It's for 3 p.m. Wonderful. If you wish, we can resend the letter that explains it. I'll be honest. I'm not sure why FINA separated the ethical accountability specifically from today's meeting, but it was written into the motion as well. I imagine that if there's no desire to look at this specific issue, we could have unanimous consent to withdraw that part, but it was in the motion that was passed and presented by Ms. Rochefort. We can look at that next week. Thanks everyone, I appreciate it. We'll get everyone out six minutes early. We're adjourned.