Appropriation Bill No. 2, 2026-27
Third Reading
June 16, 2026
Moved third reading of Bill C-32, An Act for granting to His Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2027.
She said: Honourable senators, I am pleased to rise today — as opposed to last night at midnight — to speak at third reading of appropriation act no. 2, 2026-2027, better known as Bill C-32, which would provide supply for the Main Estimates. That is, we would authorize the government to spend a certain amount of money for the purposes laid out in the Main Estimates for 2026-27.
You might remember the interim supply bill, which we spoke about at the end of March: Bill C-24. That covered about a third of this year’s spending. Today, we are going to talk about another tranche of those Main Estimates, which would approve the remaining two thirds of those forecasted estimates.
The Main Estimates for 2026-27 presented a total of $502.8 billion in budgetary spending, $230.4 billion of which was voted, so that required Parliament’s approval. Another $272.4 billion is statutory spending required and provided for under law. Another $2.9 billion of non-budgetary expenditures is also presented.
Bill C-32 will complete the entirety of that $230.4 billion forecast in the Main Estimates, $86.4 billion of which was approved in that interim measure in March. We will talk about the remaining $144 billion today.
Honourable senators, the Main Estimates are a central part of the Parliament’s oversight of government spending. They outline the funding that each department requires to deliver their programs and services in the coming fiscal year — in the year we are in. We get to look at what they’re funding and whether it lines up with the priorities the government has laid out.
There is a total of $502.8 billion in spending, with $230 billion in planned voted spending, which is the spending that is not obligated by law, unlike the Canada Pension Plan, for example, which we don’t vote on every year. This amount reflects previous decisions about where to spend money, and it takes into account the reductions that are represented in the Comprehensive Expenditure Review that was part of Budget 2025, which resulted in a number of our questions.
As you may recall, in March, Senator LaBoucane-Benson tabled the departmental plans for the current fiscal year.
These plans outline the priority tasks that each department and government agency is required to carry out this year. What’s more, 130 of these plans specify the financial resources required for their implementation.
They provide an estimate of requirements, and as implementation progresses, these estimates become more precise — hence the supplementary estimates I will be discussing with you, probably later today.
Colleagues, we spoke previously about the change in timing with respect to when the government tables a budget. From now on, we’re going to see that budget in the fall as we did this year. Now, when we receive estimates in the new year, they will be more closely aligned with the budget document. They will have time to present more accurate forecasting and more accurate plans when that budget is delivered in the fall.
Now, for some detail, of the funds identified in the Main Estimates for 2026-27, $300.5 billion are transfer payments that the government makes to other governments, agencies, individuals, cities and towns, national programs where we partner with provinces to provide funds, Indigenous communities, non‑profit organizations and research institutions. They also include direct support to Canadians through various programs, like Old Age Security and Canada Student Grants. In short, a transfer payment is a federal government’s primary tool for working collaboratively across jurisdictions and sectors to deliver programs and services that Canadians rely on.
Operating and capital expenditures account for approximately $148.6 billion of expenditures, while public debt charges are about $53.7 billion. When comparing these expenditures to last year’s Main Estimates, there is an increase of 3.3% in planned budgetary expenditures. More specifically, voted expenditures have increased by $7.5 billion, while statutory expenses are up $8.4 billion. This includes $14.7 billion in new spending announced in Budget 2025.
It includes funding for defence, infrastructure and economic supports. Other measures in Budget 2025 currently under development will be brought forward through further supplementary estimates.
Let’s examine some of the most significant expenditures proposed in these budget estimates, starting with the Department of National Defence.
The last time we discussed the defence budget, the government announced that it had met the 2% target set by NATO and was now moving towards its target of 5% of GDP.
Last time, that received a lot of applause. It’s 2%, and we’re now working toward 5%. I’m laughing at the Chair of the Finance Committee here.
The government plans to continue safeguarding Canada’s sovereignty by rebuilding, rearming and reinvesting in the Canadian Armed Forces.
That is why these Main Estimates provide for over $48 billion in voted appropriations to support the Department of National Defence.
These investments will fund the acquisition of modern equipment, training and cooperation with international partners, which will work toward global stability and help ensure the safety of Canadians.
Colleagues, there is also $1 billion for the Treasury Board, which gives the government the flexibility to respond to unforeseen defence and security pressures.
Global Affairs officials appeared before the Finance Committee. They are seeking $7.2 billion. Most of this is being put toward advancing free trade negotiations, helping our businesses succeed in global markets and enabling Canada to demonstrate both to our citizens and the global community that we help during international crises. Another $112.4 million is required for the 2025 G7 Leaders’ Summit in Canada to cover the costs associated with hosting such an event, including security bills and other items whose invoices are now coming in or are due.
Be assured that the members of the committee quizzed officials over the bills due to the United Nations; the Association of Southeast Asian Nations, or ASEAN, Secretariat; and the Organisation for Economic Co-operation and Development, or OECD.
Given the upheaval in the world today, the committee spent considerable time with Global Affairs regarding their spending and their comprehensive review reductions. Senator Oudar and Senator Hébert asked about Canada’s Africa Strategy. If the focus is increasing global activity, how do estimates align with these new opportunities? It gave officials a chance to speak about programs being supported here, such as funding for the OECD from their budget line and the CanExport program.
The Canada Border Services Agency, or CBSA, also appeared before the Finance Committee. Through these estimates, CBSA is receiving $3.1 billion. That’s an increase of 2.6% compared to last year.
Given our global focus, the CBSA has several critical priorities. A sum of $77 million will support the recruitment, training and deployment of 1,000 new CBSA officers and increase the stipend for all border services officer trainees. There will also be funds allocated to infrastructure at the Canada Border Services Agency College.
The CBSA also plans to expand many of its front-line operational teams to combat organized crime groups smuggling contraband in and out of the country, namely, firearms, fentanyl, stolen vehicles and inadmissible persons. This will also include joint efforts with federal and provincial law enforcement partners to tackle the rising number of violent extortion incidents in communities across the country.
It was good to hear that all the border services officers have been hired for the new Gordie Howe International Bridge in my own hometown of Windsor, Ontario. That’s 257 new officers who will be ready to go when the bridge is open.
The Chair of the National Finance Committee asked some very relevant questions about entry-exit management at the border. Officials talked about the improvements planned in this area through biometrics and greater digital modernization, as is the case in many other countries.
Canadian Heritage appeared before our committee, receiving a total of $1.9 billion in these estimates, much of it for grants and contributions. Considering what our chamber has been discussing lately, it is interesting to note that $234.3 million helps support communities affected by racism, hate or other forms of discrimination. It also supports work relating to Indigenous languages and the independent review of the Indigenous Languages Act. Additionally, $124.2 million will help Canadians access history and heritage, including the renewal of the Canada Strong Pass. We should tell all of our friends about that.
The Canadian Air Transport Security Authority, or CATSA, was also called before the committee. They report through Transport Canada and manage screening at 89 designated airports. They are responsible for pre-board screening, hold‑baggage screening, non-passenger screening and the Restricted Area Identity Card program. The allocation to CATSA in these estimates is $562 million. Their goal is to improve passenger wait times so that 95% of passengers wait less than 15 minutes. This is meant to augment security effectiveness and screening efficiency through AI-supported operations and biometric systems, among other things.
The Canada Revenue Agency appeared before the committee and explained why it was included in the Main Estimates. For example, $97 million has been allocated to administer additional measures to combat tax fraud, and $40 million has been allocated to administer tax fairness measures for global corporations.
Many of the questions had to do with how the CRA intends to improve its services, as noted in the Auditor General’s latest report. It is important to note that, since the CRA presented its 100-day Service Improvement Plan, an update has been posted on its website every two weeks, enabling us to track its progress.
The Department of Indigenous Services is working closely with its partners to improve access to quality services for First Nations, Inuit and Métis peoples. Most of the $23.9 billion in funding it’s requesting will go to programs and services to promote the well-being and self-determination of Indigenous peoples. This initiative is part of a broader effort to strengthen relations and ensure that all communities have the tools they need to thrive.
Let me touch on Employment and Social Development Canada, or ESDC. It is a big chunk of these estimates, and for good reason. ESDC helps Canadians participate fully in their communities, supporting their economic well-being as costs rise and making work safer and more inclusive. The department also helps people get the skills they need for today’s job market and supports those facing unemployment or financial challenges.
With this in mind, the department is seeking $13.6 billion in planned spending in the Main Estimates, with the vast majority earmarked for grants and contributions.
Together, grants and contributions help the government deliver programs more effectively and efficiently to communities and individuals. The Main Estimates also reflect the savings proposed under the government’s Comprehensive Expenditure Review. The government has made a clear commitment to spend less on government operations and invest more in the workers, businesses and infrastructure that will grow our economy and strengthen our country.
Organizations considered ways to work more efficiently, leveraging existing and emerging technologies, such as AI, where it makes sense. Some of the results of this review were presented in Budget 2025 last November, which identified savings across government of $13 billion annually by 2028–29. These cost-saving measures are expected to directly result in a reduction of approximately 16,000 full-time equivalents across the public service, including approximately 650 executive positions.
This is part of the government’s larger goal of reducing the public service to around 330,000 public servants by 2028–29. The reductions are being managed with fairness and compassion, relying on attrition and voluntary departures to the greatest extent possible, which is the framework governing workforce adjustments if there is less work, if a program has ended, if work is relocated to another site or if services are being delivered in a different way.
Federal organizations are required to follow established workforce adjustment processes set out in the National Joint Council Directive on Workforce Adjustment and in collective agreements or, in the case of executives, career transition measures. These instruments set out clear processes and support measures for employees who may be affected or, eventually, laid off.
That said, the government is leveraging all available tools to limit involuntary departures, including the Early Retirement Incentive, which we heard about last March. The Early Retirement Incentive is part of Budget 2025 and offers eligible employees the opportunity to retire without incurring a penalty for early departure.
Honourable senators, I would like to conclude by once again mentioning GC InfoBase. This website offers an accessible and comprehensive overview of government expenditures and departmental plans, providing a forward-looking account of planned spending, performance expectations and program priorities for individual organizations. If GC InfoBase were a movie, it would be Oscar-winning for its ability to clearly delineate government spending. It is the envy of peer governments. It presents complex financial data in a visual and intuitive way — cinematically, really.
I hope all honourable senators take full advantage of the extensive information that is available, which can also be accessed online at canada.ca.
Senators, I trust you will vote in favour of Bill C-32. Let’s let the government get on with its work.
Thank you.
Honourable senators, I thank Senator Pupatello for her presentation. She saved me the trouble of unpacking the $104 billion.
I rise today to speak at third reading of Bill C-32, Appropriation Act No. 2, 2026-2027. This is an appropriation bill, a bill that authorizes the government to spend. As parliamentarians, we know that an appropriation bill is never trivial because it’s actually a vote of confidence in the government’s management.
It’s a vote of confidence in the government’s ability to manage public funds and be accountable. Having heard the witnesses who appeared before the Standing Senate Committee on National Finance over the past few weeks, I have to say that I am still deeply concerned about a number of things, not just about the level of spending, but about something more fundamental: the fact that it’s becoming harder and harder to get clear answers on the use of these funds.
Senators from all groups asked valid questions on multiple occasions. How will results be measured? How will funds be monitored? What oversight mechanisms are in place? What kind of adjustments will be made when the goals aren’t met?
All too often, the answers were the same: “The details will come later;” “The terms are still being worked out;” “The indicators will be specified at a later date;” “The regulations will follow;” “The mechanisms will be defined after the fact.” Yet we’re being asked for funding today.
That is precisely where the problem lies.
Here is my first observation: The government is asking for more money while doing less to measure its results. The 2026–27 Main Estimates ask Parliament for authorization to spend more than $502 billion. Less than 10 years ago, that amount stood at approximately $258 billion. Federal budget expenditures have nearly doubled in less than a decade. Voted expenditures approved by Parliament have risen from approximately $102 billion to more than $230 billion over the same period.
Given the magnitude of the sums involved, the requirements in terms of transparency and accountability should increase accordingly. The government claims to want to be more transparent, and it claims to want to improve results and strengthen accountability, yet some of the testimony we heard in committee tells a different story.
From the representatives of Global Affairs Canada, we learned that several performance indicators had been eliminated or amalgamated, that certain targets had disappeared and that some measurement mechanisms had been simplified, all of this at a time when the department is faced with unprecedented geopolitical challenges. At Canadian Heritage, several performance indicators are not even meeting the targets set by the government itself. At the Department of Finance, some indicators that were previously used for measuring fiscal performance have been removed from the departmental documents.
As for Health Canada, we learned during our study of the appropriations that just 197 inspections of personal production of cannabis for medical purposes had been carried out. Ninety-three inspections, or about half, found a clear risk to health or a risk of cannabis being diverted to an illicit market. That’s about half. When I asked how many inspectors were assigned to do these inspections, the Health Canada representatives couldn’t provide an answer. That is exactly what troubles me.
The department couldn’t tell us how many inspectors are assigned to a program where about half of the inspections found a clear risk to health. That means the department has no idea how many inspectors or what level of priority should be assigned to this public health issue.
I have a second observation: The mistakes of the past continue to cost taxpayers billions of dollars. The spending we are examining today can’t be analyzed without taking into consideration what we learned during our study.
Let’s start with Phoenix. Over $5 billion has already been spent on this project — $5 billion, colleagues. Yet problems persist. Hundreds of thousands of transactions are pending. Public servants are still being paid incorrectly. At this point, nobody can tell us for sure how much this administrative saga will end up costing.
Let’s look at pandemic programs. The Canada Revenue Agency admitted to our committee that some $11 billion doled out under emergency measures may never be recovered — $11 billion. That’s more than the annual budget of several federal departments. When senators asked how much of the money could realistically be recovered, the answers were discouraging, to say the least. In other words, colleagues, that money has gone up in smoke.
Finally, the Department of Finance confirmed that debt servicing costs increased by $4.7 billion — $4.7 billion. That money is not being used to build hospitals, strengthen our borders or improve our infrastructure. It is being used just to pay interest.
My third observation is that the Alto project raises even more questions than it answers. The government is now asking for over $700 million more for this project. Overall estimates for the project now range between $60 billion and $90 billion. That is a difference of $30 billion. That gap alone is greater than the annual budget of many federal departments. It would place Alto among the most expensive infrastructure projects in Canadian history.
International experience, however, calls for caution. Studies of major rail projects show that cost overruns are the rule rather than the exception. Several international analyses report average cost overruns ranging from 40% to 45%. If a similar overrun were to occur in the case of Alto, we would no longer be talking about a project valued at between $60 billion and $90 billion, but rather potentially over $100 billion.
At the June 10 meeting, I asked Transport Canada’s representatives a very simple question. I asked what specific mechanisms would govern the funds transferred to Alto. I asked whether there was an agreement, a monitoring protocol or a document clearly defining the responsibilities or the accountability mechanism. The answer was surprising. They said no. There is no memorandum of understanding between Transport Canada and Alto.
Honourable senators, when a project is expected to cost between $60 billion and $90 billion, the very absence of a formal memorandum of understanding should give us all pause. This same problem keeps coming up. The oversight mechanisms will come tomorrow, but the government is still asking for resources today. Our role isn’t to approve spending in the hope that answers will eventually come. Our role is to get answers before authorizing spending. That is a basic principle of good governance.
Colleagues, I’d now like to address a more fundamental issue. I’ve been getting the impression over the past few months that the government has increasingly been asking Parliament to grant it powers that traditionally belong to the legislative branch. So I asked the Library of Parliament to review all government bills introduced since the start of the current Parliament and identify those that grant additional powers to a minister and suspend statutory provisions. I found 23 such bills — 23 out of 38. That is nearly two-thirds. Indeed, the results are telling.
Of the 38 government bills introduced to date, 23 grant new powers to a minister or to the Governor-in-Council to make decisions by order-in-council. In other words, in nearly two out of every three bills, the government is asking Parliament not only to enact legislation, but also to grant it more powers.
I’m not saying each of those powers is unjustified. Under Bill C-15, a 638-page omnibus bill, the government granted all ministers the power to create “regulatory sandboxes.” Under Bill C-5, the Minister of Environment was granted the power to designate certain projects, even if they don’t meet the usual designation criteria. Under Bill C-8, the Minister of Industry and the Governor-in-Council can issue directions to telecommunications companies through orders or regulations. Under Bill C-31, the minister responsible has exclusive authority to acquire supplies and services related to national defence and national security.
Again, the problem isn’t necessarily each of these powers taken individually. The problem is the pattern. There’s a pattern of more decisions referring to regulations, orders and discretionary powers. We should at least be vigilant about monitoring this pattern. Are we witnessing the gradual abdication of Parliament’s oversight and monitoring role? I’m genuinely worried.
Colleagues, the problem with Bill C-32 is that it’s part of a context where the government is currently requesting approval to spend more than $502 billion under the various appropriation acts, even though it frequently struggles to clearly show what results it’s achieving with the funds it’s already been granted.
We heard from knowledgeable witnesses and officials acting in good faith, but we also heard incomplete answers. We saw that accountability mechanisms have been weakened, and delegating authority to make decisions by order-in-council is not going to improve that situation. We saw that billions of dollars have been lost or mismanaged.
Basically, the government is asking us to trust it. However, trust can’t be forced; it has to be earned. When a government asks for more money — over $500 billion this year — more power and more discretion, then it must be prepared to agree to more oversight.
As senators, our role is not to rubber-stamp the government’s requests. Our role is to ensure that Canadians get the answers they are entitled to before their money is spent.
After examining this bill and after listening to the witnesses who appeared before the National Finance Committee, I find that too many of my questions remain unanswered. As a result, I will not be supporting Bill C-32, and I encourage my colleagues to do the same.
Are honourable senators ready for the question?
Is it your pleasure, honourable senators, to adopt the motion?
All those in favour of the motion will please say “yea.”
Some Hon. Senators: Yea.
The Hon. the Speaker pro tempore: All those opposed to the motion will please say “nay.”
Some Hon. Senators: Nay.
The Hon. the Speaker pro tempore: In my opinion the “yeas” have it.
Do we have an agreement on a bell?
Honourable senators, we have agreement on 15 minutes. The vote will occur at 4:16 p.m. Call in the senators.
