Moved second reading of Bill C-17, An Act for granting to His Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2026.

She said: Honourable senators, I am pleased to speak as sponsor of Bill C-17, appropriation act no. 3, 2025-26, which will provide funding as outlined in the Supplementary Estimates (B) tabled in the Senate on November 18.

As honourable senators know, appropriation bills are the series of reports that detail proposed departmental spending. Supplementary estimates contain updated and revised proposed spending at regular intervals throughout the fiscal year to allow government to continue to deliver programs. We’re talking a lot about budgets these days; that’s for next April 1. This is talking about this year and how we will get from here until the end of March.

Each year, roughly 130 federal organizations submit their planned expenditures, which are then consolidated by the Treasury Board and put into the Main Estimates. The Main Estimates provide a detailed breakdown of planned spending, accompanied by departmental plans, expected results and resource requirements over a three-year period. The Departmental Results Reports inform parliamentarians and Canadians about the results the government is achieving.

However, as we know, every expense cannot be predicted, and all activities of the day for the government cannot be predicted in advance. Priorities shift rapidly. We have seen quite a bit of that this year. Urgent needs, economic fluctuations, natural disasters or unforeseen global events often require swift responses. New programs or priorities announced after the Main Estimates sometimes require urgent funding, and without this kind of flexibility to allocate additional funding, the government would risk delaying essential services that Canadians need.

Supplementary estimates, such as these Supplementary Estimates (B), provide that flexibility. Together, the Main Estimates and supplementary estimates provide a comprehensive view of the government’s spending plans and adjustments. In the past, the Main Estimates would be prepared before the federal budget was introduced. This would result in many items in the budget not accounted for in the Main Estimates. Adjustments to estimated government departmental spending would have to be then submitted in Supplementary Estimates (A), (B) and (C) throughout the year.

Because the government has changed the timing of that federal budget being proposed in October, in the fall — well ahead of the new fiscal year — this will mean improvements for us. Perhaps we’ll have fewer supplementary estimates because we will have a better view of what is to come, given the timing of the budget. More budget measures will be included in the Main Estimates, which will allow us parliamentarians to better anticipate those public expenditures.

The bill before us today proposes spending updates and adjustments from 76 of those 130 departments and agencies reporting to government, including Crown corporations. Approval of $10.8 billion is what they’re seeking. That caused the National Finance Committee to ask all kinds of questions about what made up that $10.8 billion.

This proposed funding would address Canadians’ key priorities by supporting the Canadian Dental Care Plan, which provides coverage to more than 5.5 million Canadians, supporting major military procurement projects, strengthening emergency management in First Nations communities and supporting the education of Indigenous youth. It would be particularly useful to briefly review the important context affecting how the government makes its funding decisions.

Let us now look at the details of the Supplementary Estimates (B), 2025-26.

I will begin with an initiative that is truly life-changing for Canadians, and that is the Canadian Dental Care Plan. For too long, oral health has been treated as separate from overall health, and yet we know that the two are related. Furthermore, for many Canadians, cost is a significant barrier to accessing such care. In 2023-24, nearly one in four Canadians avoided going to the dentist because of financial constraints. Approximately one third of the Canadian population does not have any dental insurance.

One in four are avoiding seeing a dentist because of financial constraints, and one third of the population do not have insurance. These gaps have real consequences.

The Canadian Dental Care Plan is designed to close those gaps. It provides coverage for Canadians who do not have private dental insurance and whose household income is under $90,000. These are not luxuries but necessities.

That is why the largest allocation in Supplementary Estimates (B) is proposed for Health Canada, at $1.6 billion.

Why is there this increase? That’s an important question that our committee addressed with the bureaucrats. They said there was a much larger uptake than anticipated. Now, we are at 5.5 million people. It is anticipated that over the course of several years, it will reach 9 million. In fact, the costs were so much higher than anticipated — so many avoided going to the dentist initially that when they finally got the opportunity to go, they had issues they had been dealing with their whole lives. So those initial visits were actually very costly and necessary.

It is foreseen that over the next few years, those costs per individual will begin to come down. It is important to understand why it would be so much more expensive than originally anticipated.

I want to itemize the second-largest item in the Supplementary Estimates (B), which is defence.

You will recall that the Supplementary Estimates (A) were largely focused on defence, at $9.5 billion. It continues to be a priority in Supplementary Estimates (B). That is no coincidence: We are at a pivotal moment in our history. We face advanced weapons and technologies capable of reaching our shores, state and non-state actors willing to disregard international norms and a shifting world order that challenges long-standing alliances and compels us to rethink our role in the world.

Canada must respond decisively to these challenges, strengthen our ability to safeguard our territory and people and continue to work closely with our allies. This means becoming more resilient and better prepared for both military and non-military threats.

While these challenges are significant, they also present opportunities to innovate and to lead.

The government is meeting NATO’s defence spending target of 2% of GDP for this fiscal year. It is strengthening our presence in the North, a region that is essential to Canada’s sovereignty and that is becoming increasingly exposed to new risks. The government is also making significant investments in the Canadian Armed Forces, which is why the Supplementary Estimates (B) provide for a significant investment of $1.1 billion in planned expenditures for the Department of National Defence.

This includes almost $300 million for various multi-year defence investments, not only to enhance our national security and resilience but also to drive economic growth. There is also my favourite item in these supplementary estimates, which is the proposal for the River-class destroyer to replace — and I see our good senator across the aisle nodding appreciably — aging vessels and enhance Canada’s naval abilities. I can’t recall the last time we had this kind of a purchase to support our Canadian shores.

The River-class destroyer is a fast, manoeuvrable and long‑endurance class of warship capable of conducting operations, escorting larger vessels and defending against a wide range of threats. Because it is so versatile and capable, it can operate anywhere in the world either independently or as part of a task group. In fact, we’re going to have 15 eventually. This is just the beginning with those first three, so this amount of $215.1 million is important. It’s designed to be combat capable, enabling highly trained sailors to respond to any scenario with state‑of‑the‑art equipment.

I was so excited about this that I went to Staples and printed off a large photo so that you can see it. Because I can’t bring a poster into the chamber, the best that I can do is ask my colleagues to pass it around so that you can all have a look. I will pass it to my colleagues. After we’re through, I’m happy to pass this around to everybody in our house because it’s pretty awesome, and we’re going to be proud.

In the order of magnitude of numbers in budgets, billions and trillions and hundreds of millions are not a tangible thing that you can touch. This is tangible. The size of this ship is one and a half times the size of a Canadian football field. It’s just for the image. It makes you proud. It was well worth the trip to Staples.

It will be capable of conducting air, surface, subsurface and information warfare in patrol conditions or full-scale combat which, of course, we hope to avoid. In short, it will provide the ideal foundation for the navy of tomorrow, built to serve Canada and protect Canadians.

When looking at the estimates in their entirety for the Department of National Defence, it will be $46.7 billion, which is an increase of roughly $12.2 billion or 35% from the previous year, and it will happily meet targets that have been internationally laid out for Canada.

Honourable senators, these supplementary estimates also include significant investments to address historic harms and improve essential services for Indigenous Peoples.

The Department of Indigenous Services is seeking an additional $705.9 million for emergency management in First Nations communities, ensuring they have resources to respond and recover from natural disasters and other crises. This is another area where we spent time speaking with bureaucrats from Indigenous Services Canada, and we determined that they spent hundreds of millions due to all of the fires that we saw in the last season, reimbursing provinces and First Nations for the cost of taking care of these things. In addition, $154.6 million will be directed to elementary and secondary education, supporting better learning environments and better opportunities for Indigenous students.

Honourable senators, these measures reflect a commitment to reconciliation and to improving the quality of life for Indigenous Peoples. They address immediate challenges while investing in education and resilience for the future. Together, they form part of a broader effort to strengthen relationships and ensure that all communities have the ability to thrive.

Honourable senators, the estimates are an important tool. They allow us to see how we’re spending people’s money. The government believes that the public and their elected representatives deserve the opportunity to scrutinize, and I can tell you that is what the National Finance Committee did. As always, I urge honourable senators and the public to take full advantage of information available through the estimates. It can also be accessed online at Canada.ca. GC InfoBase is another helpful tool that provides a clear and accessible view of government spending through helpful visual insights.

In conclusion, the bill not only provides clarity on how public funds will be used but also demonstrates that the government is responding to immediate needs, making the shifts and changes that they need as life happens.

I would like to thank the National Finance Committee because, for me, it was a terrific opportunity to watch them in action, diligently pushing and prodding those people coming from various departments to answer the questions of how they are spending people’s money. I also want to thank those departmental officials who came and did the best they could to answer those myriad of questions as well.

Thank you, and I look forward to the support of this bill.

I will take a question.

Thank you, senator, for the question. The large 15-vessel purchase is over $22 billion, which will be over many years. This additional $215 million is specifically for the first three vessels that are currently being built. That’s what that amount is.

In the Supplementary Estimates (A), we talked wholly about military spending and the additional $9.5 billion or so. That was for a whole range of areas in defence. Today, in the Supplementary Estimates (B), we’re looking for that $1.1 billion, and $215 million of which is related to this River-class destroyer.

I hope that’s clearer.

It is a pretty extensive list. I will hand it over to you shortly.

Because there were 76 agencies making submissions to include their requests, the list is quite extensive. The point of this 15-minute speech or so — I might have reached 20 minutes — was to try to highlight the largest expenditures, but there are other large ones. For example, more than $500 million goes to the public service insurance plans and programs because those costs have been rising. We have all faced that on a personal level, and the government has also faced it in the kinds of benefits we are providing to employees, for example, across government. That was another large amount. But we can certainly offer you the entire list of what makes up the total we’re requesting in the Supplementary Estimates (B). Those are the large ones I was expressing in this discourse.

I didn’t think that anyone would want to hear me speak for 45 minutes, but I will take that under advisement for the next round.

The Canadian Dental Care Plan is a work-in-progress, and we heard from bureaucrats, as the National Finance Committee members are aware, that we may hear from them again. The numbers that have come in regarding usage has changed. They did not expect to have a 60% increase in individuals applying and being eligible for that program. A great part of the increase was being overwhelmed by people actually applying and being subject to getting into the program and taking advantage of it. There are 27,000 dentists, oral surgeons and others involved who are delivering services. I think that, too, is a number that was much more than they anticipated, and that’s from coast to coast to coast.

As they come together, request more and see more take-up, it will be a program that they anticipate eventually serving 9 million Canadians. So far we’re at about a 5.9 million, and that’s just over the course of the first two years.

As I mentioned earlier, the initial costs are more than anticipated simply because people who might be 50 years old and have never seen a dentist have now suddenly come in and received all the very basic things.

Once that becomes regularized, they anticipate costs will go down.

I wonder if Senator Pupatello would take a question.

Yes.

This is a two-part question and is born of my being intrigued. Senator Pupatello, being familiar with the Senate Rules, did you know that the poster you held up would be considered a prop under our Rules? If you did know that, could you please share your rationale for doing so?

Yes, what I was trying to do, Your Honour, was not show it but simply pass it so that I wouldn’t be showing it. I am fully aware of the Rules, have been subject to the Rules in the chamber for a good part of my career and have managed to avoid breaking them. I am happy to pass you the photo because you would be impressed with what these things look like.

Would Senator Pupatello take a question?

Yes.

Thank you very much. This is on dental care costs. It is understandable why the initial outlay has arrived in a costlier fashion. Dental care is charged at market rates. It’s not like universally insured health care where there’s negotiations with the province — or is it?

From a perspective of curiosity, are you aware of whether the Canadian Dental Care Plan has also made agreements with different dental practices to contain costs?

Thank you for the question. I’m not aware of the long-term organization. The group managing the program is considering or watching carefully what the provinces do — for example, regarding individuals who already have coverage — ensuring these claims come in after using a provincial program and hoping that there are other programs in place that this program won’t replace, which would significantly increase the national cost for us.

They are looking at a number of things as it develops. The message from those who appeared before the committee was that they are surprised by the take-up, impressed that so many Canadians need the service and believe that those costs will, over time, come down and be more appropriate.

However, that initial launch has been expensive, and people recognize that it was more than anticipated, which is why they’re coming back.

No one questioned the necessity of the program or thought it was a poor idea. They just need to manage those expenses, which they anticipate, over time, will come down.

To follow up on that, it’s about time we realize that dental health is health. I can use World War I and World War II statistics and tell you that we lost more soldiers to dental disease than were wounded or killed in action. When we are looking at the health of Canadians, this is very important.

However, I hope that there is close control over this program and that Canadians don’t become complacent and think this is the same as universally insured medical care. Would you agree?

I completely agree with those comments. Depending on income level, the level of support changes. Many people don’t have the income to pay up front. If they receive an unexpected large bill, which many of us may well have had, they don’t have $500 to pay the bill, so a system has been created where the dentist provides the service and is then reimbursed. They have had to think about how people will approach the service.

Most importantly, folks are helping people to utilize the system, letting them know there is a program that can be applied for and that if yearly income is under $90,000, there will be some level of support — potentially 100%. That is important. It’s not luxury. They are not having bonding done to whiten their teeth. These are necessities, things like cavities, repairs, dentures — things people need to survive. The research is there to suggest affiliation between heart disease and not taking care of your teeth. All of these things are well known now, and it seems timely that we are doing this. We should be very happy that people are taking up this program.

Honourable senators, I rise to speak as critic to Bill C-17, which is the government’s third appropriation bill for this fiscal year. I would like to thank my honourable colleague Senator Pupatello for her comments.

Honourable senators may recall that we approved two appropriation bills prior to the summer adjournment in June. Appropriation bills were approved for the Main supply and Supplementary Estimates (A). Appropriation bills, once approved by Parliament, provide government with the money it needs to operate. So far this year, appropriation bills, including this bill when it is approved by Parliament, will have provided government with the authority to spend $242 billion.

In addition to appropriation bills, government also receives authority to spend under numerous other legislation. For example, the Financial Administration Act provides government with the authority to pay interest on government debt. Old Age Security benefits are paid under the authority of the Old Age Security Act. Generally speaking, slightly less than half of government spending is authorized by appropriation bills and slightly more than half is authorized by other legislation and is called statutory spending.

The Supplementary Estimates (B) document, or the Blue Book, as we commonly call it, which was tabled in the Senate last month, outlines $242 billion in spending approved by appropriation bills and $264 billion approved by other legislation for a total projected spending to date of $506 billion, which is $74 billion less than the $580 billion estimated in the budget.

We still have three months left in this fiscal year, so I expect that the remaining $74 billion will most likely be approved by the next appropriation bill or by other legislation. However, it should be remembered that the budget included $20 billion in new budget initiatives this year, and we have yet to see these included.

It will be interesting to see if government spending this year exceeds the $580 billion estimated in its budget and whether they include funding for the $20 billion in new budget initiatives.

In previous years, government included a section in its estimates document which compares the spending outlined in the estimates document to the expenditures in the budget.

However, this information was not provided this year. Officials told us that at the beginning of the year, they didn’t have a budget; however, there was a budget tabled on November 4, and it disclosed projected expenditures of $580 billion for this year. That information should have been used to provide the comparison between the estimates document and the budget.

In this bill, 76 departments and organizations are requesting authority to spend a total of $10.8 billion. The Department of Health is requesting $1.6 billion, the only organization to request more than $1 billion. Six other entities are requesting more than $500 million. These are Indigenous Services Canada; Crown‑Indigenous Relations and Northern Affairs; Foreign Affairs, Trade and Development; Immigration, Refugees and Citizenship; Treasury Board Secretariat; and VIA Rail Canada.

Of the $10.8 billion being requested in this bill, $1.4 billion, or 13%, is for personnel costs across a number of departments and organizations.

When this bill is approved, government will have approval to spend $66 billion on personnel costs this year, which is $4 billion higher than the amount approved at this time last year. The recently released Public Accounts of Canada indicate that personnel spending last year was $76 billion, which was 6% higher than the $72 billion spent the previous year.

Based on The Fiscal Monitor for August, published by Finance Canada, personnel spending between April and August of this year increased 7.8% compared to the same period last year. However, Treasury Board data indicates there are fewer employees in the public service this year when compared to last year. Despite the reduction in the number of employees, personnel spending continues to increase.

Given the growth in spending on professional and special services, government made a commitment to reduce costs in this area. Last year, with the approval of Supplementary Estimates (B), government had the authority to spend $22.7 billion on professional and special services. This year, when this bill is approved, government will have authority to spend $28.2 billion, a significant increase of $5.5 billion.

The recently released public accounts for the last fiscal year indicate that professional and special services were $19.6 billion last year, up from $17.8 billion the previous year, an increase of 10%. However, Finance Canada’s The Fiscal Monitor for August indicates that $6.6 billion was spent on professional and special services between April and August of this year, compared to $6.46 billion during the same period last year, an increase of 2.4%. It remains to be seen whether spending for the entire 2025-26 fiscal year will remain at a level comparable to last year.

Of the $10.8 billion being requested in Bill C-17, the Department of National Defence is requesting $36 million, which is net of an increase of $1.1 billion and $1 billion transferred to other departments. Departmental officials were asked why $1.1 billion was being requested by the department, yet $1 billion of the department’s funding was being transferred to other departments. Officials testifying at our Finance Committee said they could offer no explanation and indicated they were actually surprised by the extent of funding being transferred.

Once we approve this bill, the Department of National Defence will have authority to spend $46.7 billion, which is a significant increase when compared to the $35.6 billion that had been approved at this time last year. This increase of $11 billion is attributable to the government’s commitment in June to provide $81.8 billion over five years, on a cash basis, to rebuild, rearm and reinvest in the Canadian Armed Forces.

Honourable colleagues may recall that we already approved $9 billion of the $81.8 billion in June in the Appropriation Act No. 2. I expect that the remaining $72 billion will be requested in future appropriation bills.

Given that the government’s 2024 defence policy and the department’s 2025-26 departmental plan both outline spending, it is unclear how the $81.8 billion announced in June and included in Budget 2025 relate. For example, the Departmental Plan 2025-26 outlines spending of $35.6 billion this year, yet the department will have the authority to spend $46.7 billion once this bill is approved. There’s a mismatch of numbers.

The government has also indicated that, with the increased funding, it will meet its 2% NATO target by the end of this fiscal year and the 5% of GDP target under the revised NATO framework by 2035. With regard to the 5% target, the budget states that government will invest 3.5% of GDP by 2035 in core military needs, such as supporting the Canadian Armed Forces and modernizing military equipment and technology. To meet the remaining 1.5%, the federal government expects that currently planned spending by all levels of government — federal, provincial, territorial and municipal — will meet the remaining 1.5%.

The Parliamentary Budget Officer, in his testimony before our committee, told us that in terms of meeting the 2% target for this year, “. . . it will be close . . . .” However, with regard to meeting the 5% target, he said, “ . . . it is unclear at this point.” He said that immediately following the budget, he sent an information request to the Department of National Defence, because it was unclear to him how much of the $81 billion announced in Budget 2025 was new and how much was incremental. In his information request to the Department of National Defence, the Parliamentary Budget Officer specifically asked for clarification as to how Budget 2025 measures compared with existing spending projections, and how much of the funding represents new resources rather than reallocations within existing plans. To summarize, he said, “At this point, there is not a clear path in getting to the 5% target.”

Of the $10.8 billion being requested in Bill C-17, $1.6 billion is being requested by Health Canada for the Canadian Dental Care Plan. Parliament had already approved $3.2 billion for the dental care plan in the Main Estimates in June, and this request of $1.6 billion will increase funding for this year to $4.8 billion.

Last month, the Minister of Health announced that “. . . close to six million Canadians are now covered under the Canadian Dental Care Plan . . .” at an average cost of $800 a year. Six million Canadians at $800 a year results in the $4.8 billion in funding requested for this year.

The Canadian Dental Care Plan was enacted by Bill C-31 in 2022 and Bill C-47 in 2023, so it is a fairly new program. In June 2023, the dental care plan was estimated to cost $13 billion over five years and $4.4 billion annually thereafter. Specific to this fiscal year, 2025-26, the estimated cost at that time was $3.2 billion, which is significantly less than the $4.8 billion now being estimated.

Officials told us that the department is expecting costs to level out at $4.1 billion annually by 2030. Departmental officials also told us that of the 6 million Canadians eligible under the dental care program, 2.4 million people have actually received care, and the department is estimating the actual cost for this year to be $4.32 billion.

To track and understand the cost of the program, the department needs to determine the actual average cost per person for each fiscal quarter.

Officials also told us that a financial controls audit was undertaken and completed earlier this fiscal year. Overall, they said there was a positive outcome. However, given that the dental care program is a new program and actual costs are now exceeding the estimated costs of the program, the department should undertake or request an independent audit of the program.

Once this bill is approved, the Department of Health will have approval to spend a total of $12.2 billion. Last year at this time, the department had approval to spend $9.5 billion. This is a significant increase.

To meet its 15% savings target over three years, Health Canada says that activities selected for reduction have consistently shown low demand, overlap with other jurisdictions or sectors or provide minimal health benefits. Given the increasing costs associated with the Canadian Dental Care Plan, the department is going to be challenged to implement its reduction targets.

Of the $10.8 billion being requested in this bill, the Canada Revenue Agency is requesting $185.6 million, bringing their total spending approved by appropriation bills to $5.3 billion. In addition to this $5.3 billion, the agency also has authority under other legislation to spend another $5.6 billion, of which $4.2 billion is estimated to be the final Canada Carbon Rebate to be paid this year.

The agency’s total spending authority so far this year is $10.8 billion, compared to $21.3 billion last year, a decrease of $10.5 billion. This decrease is attributable to the cancellation of the consumer fuel charge.

Budget 2025 indicates that the Canada Revenue Agency will wind down units that are no longer required, such as the Digital Services Tax and the Canada Carbon Rebate, and use some of these “savings” to “. . . improve services, strengthen compliance, and reduce tax debt.”

It is anticipated that these “reinvested savings” will have an estimated positive impact of $1.1 billion annually from 2028-29 onward, which will contribute to the government’s projected savings of $60 billion over five years.

With regard to debt collection, taxes owed to the government have been increasing each year. Gross taxes receivable as of March 2025 was $244 billion, up from $230 billion the previous year and significantly more than the $111 billion recorded in 2015. Taxes receivable, or taxes owed, has been increasing faster than tax revenues.

The government, in its budget, recognizes the need to address the backlog of tax debt by indicating that modernizing government operations at the Canada Revenue Agency “. . . will free up resources . . . to address the backlog of tax debt.” In addition, the agency, in its 2025-26 departmental plan, acknowledges that “tax debt continues to grow.” The departmental plan also quotes factors that resulted in the cessation of collection activities with respect to tax debt — I was never aware of that — and goes on to say that “the Canada Revenue Agency strives to increase the resolution of the tax debt.”

Given that the agency is being given significant additional money to improve debt collection, the agency should be reporting how their tax collection rate has improved as a result of the additional resources provided. Canadians and parliamentarians would benefit from reporting that would connect the additional resources provided with the improved tax collection.

The Treasury Board of Canada Secretariat is requesting $926 million, of which $595 million is for the public service insurance plan. The public service insurance plan includes health and dental care benefits, as well as disability and life insurance, for active and retired employees, and their eligible dependents. Costs have increased over the past number of years, and Treasury Board has indicated that funding for the public service insurance plan is expected to further increase due to a number of factors, such as the rate at which benefit plans are accessed, an increase in the cost of new medical technologies and an increase in the number of plan members.

The secretariat’s departmental plan for this year estimates that the cost for this year will be $4 billion, $4.2 billion next year and $4.4 billion the following year. The departmental plan also indicates that the cost of the public service insurance plan was $10.9 billion last year, and the increase was mainly attributable to a $6.425-billion actuarial shortfall in the public service superannuation account.

Given the significant and increasing costs of the public service insurance plan, the Parliamentary Budget Officer was asked whether he had examined the cost trajectory of the public service insurance plans and programs, and if comparisons exist with other jurisdictions. The Parliamentary Budget Officer indicated that this would be a significant undertaking and would require a committee motion to authorize him to undertake such a project. The committee’s motion was approved on Tuesday, and we are now looking forward to the report from the Parliamentary Budget Officer.

Crown-Indigenous Relations and Northern Affairs Canada is requesting $1.385 billion, of which $944 million is related to agricultural benefits claims and federal Indian day schools settlements. As the Parliamentary Budget Officer stated in his report on Supplementary Estimates (B), Indigenous-related claims are a major driver of the federal provision for contingent liabilities. The government’s contingent liabilities have increased considerably in recent years and has significantly increased the deficit in some of those years. Of particular concern to me is the lack of information provided to parliamentarians and Canadians, and the impossibility of determining transactions that increase and decrease the number of contingent liabilities being recorded in the government’s financial statements.

Although the government’s financial statements report the net annual change in contingent liabilities, the Parliamentary Budget Officer recently confirmed that parliamentarians do not have access to the underlying flows that would show how much of it reflects newly recognized liabilities versus settlements or extinguished obligations.

Despite the magnitude of contingent liabilities and their significant impact on increasing deficits, the government has provided very little information on them. In 2022-23, an increase in contingent liabilities increased the deficit by $26 billion. Except for this $26 billion, the government would have recorded a deficit of $9 billion rather than a deficit of $35 billion. In 2023-24, government reported a deficit of $61.9 billion. Included were expenses of $16.4 billion attributed to an increase in contingent liabilities. Except for this $16.4 billion, government would have recorded a deficit of $45.5 billion rather than $61.9 billion.

The government has recognized the impact that contingent liabilities have had on the deficit, and discussed the issue in its 2024 Fall Economic Statement that was tabled one year ago in December. It committed to convening a working group of experts to advise on the government accounting of future potential contingent liabilities and said that the working group would inform the presentation of contingent liabilities in Budget 2025, which we were expecting in March or April.

Unfortunately, Budget 2025, which was tabled last month, provided no update, except to repeat last year’s commitment, stating that:

Actions are underway to manage this uncertainty through improved visibility and oversight on large areas of contingent liabilities . . . .

It went on to say:

In addition, experts are also being engaged on how to improve public communication of contingent liabilities.

As a bare minimum, the government could improve oversight by merely providing the annual increase in contingent liabilities as well as the annual decrease rather than the net amount. That would provide a step in the right direction, pending the delayed reporting of the “expert” working group.

To conclude, honourable senators, this bill will give government approval to spend $10.8 billion of the $580.9 billion in projected expenditures for this year. This works out to 1.8% of expenses. Our committee held two meetings and heard from the Parliamentary Budget Officer and officials from five government departments. There were four hours of hearings, after which we began our study of the budget implementation act.

In closing, I would like to thank our chair and deputy chair, Senators Carignan and Forest, for their leadership. I also extend my appreciation to my committee colleagues for their excellent questions. Thank you also to our committee clerk, our analysts and all staff who ensured that our meetings ran smoothly.

Thank you, honourable senators.

Are senators ready for the question?

Is it your pleasure, honourable senators, to adopt the motion?

Some Hon. Senators: Agreed.

An Hon. Senator: On division.

(Motion agreed to and bill read second time, on division.)