Thank you, Mr. DeMarco.

I will turn first to our audit of registration under the Indian Act. Registration gives First Nations people access to vital services such as on-reserve housing, financial support for post-secondary education and health benefits not covered by other programs.

We found that Indigenous Services Canada poorly managed the registration process. The department averaged almost 16 months to make a decision on complex registration applications, exceeding its six-month service standard. Even on applications prioritized for reasons such as medical emergencies, the department took on average about 10 months to deliver a decision.

Indigenous Services Canada has the mandate to gradually transfer registration responsibilities to first nations communities, working with community-based registration administrators and trusted source organizations that help people apply for registration. However, we found that funding for trusted sources was unpredictable and unstable, and that the funding formula for community-based registration administrators had not changed since 1994.

Registration under the Indian Act plays a central role in recognizing first nations people under Canadian law. It gives access to important services and benefits, but people are waiting far too long for decisions.

Our next audit examined the Department of National Defence's project to replace Canada's aging CF-18s with advanced CF-35A fighter jets. We found that the estimated costs of the future fighter capability project have significantly increased, and the project faces several risks that could jeopardize timely introduction of the new fleet.

The Department of National Defence originally estimated that the project could cost $19 billion. The audit found that this figure was based on outdated information, and that by 2024, the projected costs had increased to $27.7 billion, almost 50% more than the original estimate. This figure does not include essential elements needed to achieve full operational capability, such as certain infrastructure upgrades and advanced weapons, which would add at least $5.5 billion to the total estimated cost.

The audit also revealed other important risks, including a potential shortage of qualified pilots and delays of over three years in the construction of two new fighter squadron facilities for the CF-35s. The resulting need to develop interim facilities solution will further increase infrastructure costs.

Maintaining a strong fighter-jet capability contributes to the safety and security of Canadians. This large multi-year project requires active and ongoing management to control risks and costs to ensure the timely rollout of the CF-35 fleet.

Our next audit looked at the federal government’s efforts to right-size its office space to minimize costs and free up underused properties for potential conversion into affordable housing. In 2017, Public Services and Procurement Canada, or PSPC, estimated that half of the government’s office space was underused and planned a 50% reduction by 2034.

Our audit found that PSPC had made little progress in its efforts over several years to reduce its office space. The department estimates that the office space reduction will result in savings of about $3.9 billion over the next 10 years. However, it achieved less than a 2% reduction from 2019 to 2024, mainly because of a lack of funding.

The Canada Mortgage and Housing Corporation, or CMHC, supported by Housing, Infrastructure and Communities Canada, is mandated to transform surplus federal office properties into affordable housing through the federal lands initiative.

The audit found that while CMHC was on track to meet the initiative's 2027-28 target to secure commitments to build 4,000 new housing units, the target is based only on commitments, and that only 49% of units will be ready for occupation by 2027-28. Public Services and Procurement Canada and federal tenants need to accelerate their efforts to reduce the office space they occupy and contribute to increasing stock for housing that is sustainable, accessible and affordable.

Our final audit examined the government contracts awarded to GC Strategies Inc., an Ottawa-based information technology staffing company.

From April 2015 to March 2024, 31 federal organizations awarded 106 contracts to GC Strategies. We found that federal organizations frequently disregarded government procurement rules meant to ensure fairness, transparency and value for Canadians.

For example, federal organizations are responsible for assessing the level of security required for a contract and for verifying that the people doing the work have the necessary security clearance. The audit found that, in 21% of contracts examined, organizations lacked documentation to show that they had confirmed security clearances.

The audit also found that federal organizations disregarded government requirements to monitor the work performed by contractors. The organizations frequently did not have evidence to show who performed the work, what work was done, or whether the people doing the work had the required experience and qualifications.

The findings of this audit echo those of previous audits that also showed deficiencies in how public servants applied federal procurement rules.

This report does not include any recommendations, because I don't believe that the federal government needs more procurement rules. Rather, organizations need to make sure that public servants understand and follow existing procurement rules.

Mr. Chair, this concludes our opening remarks. We would be pleased to answer any questions the committee may have.

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