Budget 2025 Implementation Bill, No. 1
Second Reading
March 10, 2026
Honourable senators, I rise today to speak to Bill C-15, An Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025.
I will begin by stating the obvious. At 600 pages long, Bill C-15 once again illustrates a recurring challenge: the overuse of omnibus bills.
Over the years, governments of various political stripes have recognized the problems posed by such bills. Stephen Harper argued that Parliament should not be called upon to pass legislation where a number of unrelated measures are bundled together in a single bill.
Justin Trudeau pledged that his government would avoid the practice of introducing large omnibus bills that make parliamentary scrutiny more difficult. These commitments reflected a fundamental democratic principle: Legislation should be structured in such a way as to allow Parliament to review it properly.
However, Bill C-15 contains provisions that go well beyond simply implementing the budget. When diverse, complex measures are grouped together in a single bill, the Senate faces a practical dilemma. Our committees must attempt to examine multiple areas of public policy — budgetary policy, regulatory reform, environmental protection, competition rights, and many others — within very tight time frames. This structure limits the depth of the review that Canadians expect from our chamber of sober second thought.
If Parliament wants genuine accountability, legislation must allow for clear scrutiny, clear debate, and clear responsibility for the policy objectives it implements.
For these same reasons, I can only cover a few points. I choose to focus on issues regarding the socio-environmental polycrisis unfolding before us and its impact on the proposed government budget spending.
In Budget 2025, the government promised a “generational shift.” It declared that climate action is not just a moral obligation but an economic necessity. It also committed to “. . . make capital investments a national priority to build Canada Strong.” These, dear colleagues, are very ambitious promises.
As legislators, we know that budgets are not judged by their rhetoric; they are judged by their architecture and their potential to attain measurable objectives.
As I mentioned in a previous speech regarding the budget, there are major changes in the way the budget is presented. Some raise concerns.
Despite the use of old and new formulas, many newly proposed mechanisms risk weakening transparency and accountability at the very moment when Canadians expect more of both. The Parliamentary Budget Officer, or PBO, confirmed this concern.
Canada faces enormous challenges: climate instability, global economic disruption, rising inequality and geopolitical uncertainty.
Meeting this moment requires — yes — modern fiscal policy that recognizes that economic prosperity, social well-being and ecological stability are not competing objectives. They are interdependent. A modern budget must, therefore, do more than stimulate growth. It must strengthen the foundations of prosperity itself, measured by modern indicators that are more adequate than the GDP.
GDP growth alone does not capture the real drivers of prosperity. The GDP measures the flow of money through an economy: what is spent, produced and rebuilt. However, it does not tell us whether that activity improves the well-being of people or the health of the systems that sustain life.
In fact, the GDP can grow in many circumstances that reflect profound human tragedy.
Let me give you an example. Since the beginning of the war following the Russian invasion of Ukraine, certain sectors of Ukraine’s economy have shown increases in measured GDP driven by military production, international aid flows and reconstruction spending. Yet no one would suggest that war represents genuine prosperity.
The exact same phenomenon occurs after extreme weather events. We rebuild homes, roads and infrastructure, increasing economic activity and, therefore, GDP, even though society is merely recovering from these losses.
This illustrates a fundamental limitation of GDP: It measures economic activity, not economic progress, and it cannot distinguish between expenditures that build well-being and those that simply repair damage. If we rely solely on GDP as our compass, we risk mistaking the costs of crises for signs of prosperity.
Despite our high-level decision-making status as a G7 nation, we remain uninformed about the state of the planet and mostly unaware that humanity has transgressed seven of the nine planetary boundaries identified by scientists. The ecological systems that support life — and the economy of every nation on Earth — are under increasing stress. This is not an abstract environmental issue. It is an economic risk that is materializing at high speed in Canada. There were $9.1 billion in insured losses due to extreme weather events in 2024; our wildfire suppression costs alone exceeded $1 billion annually; and in Ontario alone, air pollution has been estimated to cost over $500 million per year in direct health costs and $374 million annually in lost productivity. Yet we say we care about productivity and competitiveness.
In this budget, we see a growing tendency to reframe subsidies as investments. This shift in language may appear technical, but it has more significant implications. An investment implies that public funds generate measurable returns for society, whether in economic productivity, environmental resilience or social well‑being. A subsidy, by contrast, is public support provided to sustain an activity that may not be economically viable on its own.
When subsidies are relabelled as investments without transparent evaluation of their returns, two risks arise. First, Parliament’s ability to assess fiscal choices is weakened. Second, Canadians may believe their tax dollars are financing the future when they may instead be prolonging dependence on the past.
Fiscal transparency requires that we distinguish clearly between supporting emerging solutions — through innovation, creativity, productivity and competitiveness — and prolonging the legacy of sunsetting systems because if everything becomes an investment, then nothing is truly evaluated as one.
Problems arise when we modernize budgets without modernizing the metrics. I’m looking to my dear Senator Marshall.
Budget 2025 also introduces changes to how the government presents fiscal operations. While modernization is, of course, welcome — who doesn’t like modernity? — the current framework risks obscuring the fundamental question: What outcomes are we actually financing?
Many leading economists are moving towards well-being budgets, climate-aligned fiscal frameworks and natural-capital accounting. Healthy ecosystems, resilient infrastructure, social equity and climate stability are not peripheral concerns but economic assets. If our fiscal framework fails to measure them, it misallocates capital on a national scale.
Canada has the capacity to lead in this area, but leadership, colleagues, requires clarity, not ambiguity.
Bill C-15 has weakened provisions designed to address greenwashing. In 2024, Parliament took important steps to protect Canadians from misleading environmental claims. The Competition Bureau was clear: Greenwashing harms competition because it misleads consumers and distorts markets.
When Canadians spend more on products that claim environmental benefits that do not exist, they lose money and confidence in the market. Walking back this protection risks sending the wrong signal at the wrong time. Bill C-15 rolls back last year’s amendment, which requires “. . . adequate and proper substantiation in accordance with internationally recognized methodology . . . .” What was wrong with that? Now, by removing “. . . in accordance with international and recognized methodology . . .” the new provision is broader and vaguer, increasing the risk of differing interpretations by courts. We are not doing our job and are letting judges solve these issues.
Perhaps the most serious concern in Bill C-15 lies in Part 5, Division 5, which amends the Red Tape Reduction Act. These provisions introduce what the government calls legislative sandboxes. Yes, we heard that, in principle, regulatory experimentation can be valuable. Yes, in principle, they can encourage innovation. But which innovation — artificial intelligence, renewable energy or the past sunsetting sectors? That’s the problem. I’m well placed to know that innovation often requires testing new ideas, but the mechanism proposed here goes far beyond targeted experimentation. It will allow ministers to exempt individuals, companies or even government entities from the application of federal laws and regulations with only a limited list of exclusions.
More than 100 legal scholars, human rights experts, labour leaders and civil society organizations have warned Parliament that these provisions risk concentrating extraordinary discretionary power in the executive branch.
The other chamber has adopted amendments presented by the opposition parties introducing certain guardrails. Fundamental laws, including the Canada Labour Code and the Canadian Environmental Protection Act, are not clearly protected.
Regulatory flexibility must never come at the expense of democratic accountability or fundamental protections for workers, communities and the environment. The new requirement for a 30-day consultation period is a step in the right direction, but the legislation does not clearly define who must be consulted. Who should be consulted — local communities, Indigenous governments, workers, environmental health experts or those who may bear the consequences of regulatory exemptions?
All must have a seat at the table. Consultation cannot be symbolic. It must be meaningful, inclusive and transparent. This point raises another high litigation risk.
Bill C-15 reflects a broader strategic hesitation around the global energy transition. As I mentioned before, in 2025, global investment in the energy transition reached $2.3 trillion. Canada was at the bottom of the list of countries where these funds landed. Yet we have our Prime Minister going south, east and west for money to be invested in Canada. I wish he could also ask our pension plans, banks and insurance companies to believe in Canadians.
Yet with Venezuelan and Iranian regime change — driven by U.S. action — and its impact on oil and gas prices, we all know that energy security has become a strategic priority across the world. Countries are racing to attract investment in renewable energy, storage technologies, clean manufacturing and resilient infrastructure.
Canada should be leading this race. We have extraordinary advantages: abundant renewable resources, excellent institutions and a highly skilled workforce. Yet our policy signals remain inconsistent, hesitant and sometimes contradictory or confusing. The investment tax credits in Bill C-15 are modest when compared with the scale of transformation under way globally.
I’m sorry to interrupt, Senator Galvez. The time allocated for your speech has expired. Are you asking for five more minutes?
Yes, please.
Honourable senators, is leave granted?
Our role is not simply to approve or reject bills. Our role is to highlight risks, strengthen accountability and protect the public interest.
Moving forward, this chamber can still ensure accountability in several ways. We can demand transparent reporting on the use and outcomes of legislative sandboxes, require clear evaluation criteria for public investments and subsidies, strengthen the oversight of tax credits and fiscal instruments, and ensure that consultation processes include those most affected by regulatory exemptions.
In short, we must ensure that the promises made in Budget 2025 are measured, monitored and, ultimately, delivered.
At this defining moment, we must choose whether our fiscal policies will prepare Canada for the future or simply extend the patterns of the past. Our future is bright, but it will only be bright if we finance it wisely, govern it transparently and build it sustainably.
Thank you, meegwetch.
Honourable senators, I rise to speak to Bill C-15.
Bill C-15 outlines an ambitious agenda for the government. In fact, the government tells us that its new budget initiatives will cost $20 billion in this fiscal year, $22 billion next year and $48 billion the following three years.
New budgets are not cheap.
These costs will contribute to a record-setting $78-billion budget deficit for this year, the highest deficit ever recorded by a Canadian government, with the exception of the pandemic years. It’s a significant increase from last year’s deficit of $36 billion. Not only is there a significant increase in the deficit for this year, but future deficits are decreasing only very slightly. There is no pathway to a balanced budget.
Equally concerning is the government’s inability to stick to their spending forecasts, as spending keeps being revised upward.
While Budget 2025 promises fiscal restraint, history has shown us that the government fails to deliver on its fiscal commitments. Each projection for spending over the past several years was increased when the subsequent fiscal plan was released. Budget 2022 estimated that spending for this year would be $493 billion. In Budget 2023, the government increased it to $522 billion and then to $551 billion in Budget 2024. Now, it is $581 billion in Budget 2025.
Deficit projections have also increased with each budget. Budget 2022 projected an $18-billion deficit for this year, rising to $26 billion the following year, increasing again to $39 billion the next year, and now, in Budget 2025, it has increased to $78 billion.
Budget 2025 was released on November 4, and, since that date, there have been several announcements and initiatives, the costs of which have not been included in the $78-billion deficit. While the cost of the tax cut provided in Bill C-4 appears to have been included in the $78-billion deficit, other initiatives — such as Bill C-19, the Canada Groceries and Essentials Benefit Act, and the newly announced electric vehicle subsidies — do not appear to have been included in the calculation of the $78-billion deficit. Both of these initiatives will increase the deficit by $3 billion and $1 billion, respectively, this year unless initiatives already included in the deficit do not materialize.
Other initiatives, such as the increase in military spending, will further increase the deficit. Last month, the Parliamentary Budget Officer released a report that indicates that the government’s commitment to meet the NATO 5% commitment by 2035 will require significant spending and borrowing. He estimates that the impact on the deficit is expected to be $3 billion next year, increasing to $63 billion by 2035.
And there are other costs that may affect the deficit. Build Canada Homes and the other new entities to be created as part of the Defence Industrial Strategy will all have an impact on the government’s deficit.
Given these additional costs, it appears that the fiscal projections provided for guidance by the government in Budget 2025 are not credible yet again.
Unfortunately, the government has not provided any regular updates to its fiscal plans since the budget was released in November. Other financial documents, such as the estimates documents and the monthly publication The Fiscal Monitor, do not provide a complete picture of the government’s finances. In fact, some documents that had been provided, such as the reconciliation of the estimates documents to estimated expenditures as per the budget, were not provided in Supplementary Estimates (B) nor in Supplementary Estimates (C) for this year.
While the government forecasted in November a $78-billion deficit for this year, Minister Champagne, when asked in the Senate last week what the revised deficit is for this year, did not — or maybe could not — provide a response.
It is now March, and the fiscal year-end is a few days away. Does the government not know what its deficit is for this year? We are so close to year-end. A government that has control of its fiscal house should have an idea what its deficit is.
One of the key elements of the budget was a new financial presentation that divides all spending into either operational or capital. The government says it will balance the operating budget in three years and shrink the deficit-to-GDP ratio over the next few years. These two commitments, it said, would be the government’s new fiscal anchors.
However, the Parliamentary Budget Officer says that the government’s definition of capital spending is overly broad and that, according to his definition, the operating budget will not be balanced over the next few years.
With respect to the second newly established fiscal anchor, the Parliamentary Budget Officer says there is only a very slight chance — 7.5% — that the deficit-to-GDP ratio will decline every year between 2026 and 2030.
These issues have yet to play out, and we shall see what the government says in its spring fiscal update and its audited financial statements.
That brings me to Division 38 of Part 5 of this bill, which is proposing an increase in Canada’s debt ceiling to $2.541 trillion. Under the parliamentary authority framework enacted in 2017, parliamentary authority to borrow is granted through the Borrowing Authority Act and through Part IV of the Financial Administration Act. These pieces of legislation allow the minister to borrow money up to a maximum amount approved by Parliament. We refer to this maximum amount as the “debt ceiling.” That’s what the government is asking the approval of Parliament to increase.
The Financial Administration Act also allows the minister to borrow in excess of this amount under limited circumstances for specific purposes, such as a natural disaster.
Last October, the government announced it was implementing a new way of budgeting called the “capital budgeting framework,” which would make capital investments a national priority. The new framework would be applied to the federal budget, and the budget would be split between capital spending and day-to-day spending. There has been much discussion and criticism of the government’s proposed capital budgeting framework. However, regardless of how the government splits its expenditures or its deficit — we call it “splitting dice” in accounting — the increasing debt will indicate the true extent of government borrowing.
The extent of the government’s debt can be measured in two ways. The first is the debt ceiling, which has been approved by Parliament. It increases in intervals, usually in periods of three years. The other number is the actual debt, which increases as the government spends.
The initial debt ceiling was established in 2017 at $1.1 trillion, giving the government the authority to borrow up to this amount. Four years later, in 2021, it was increased to $1.8 trillion. Three years later, in 2024, it was increased to $2.1 trillion. And now, less than two years later, the government in this bill is proposing to increase it to $2.5 trillion.
Just to put these numbers in context, in June 2024, the debt ceiling was approved at $2.1 trillion for a three-year period up to March 31, 2027. But just 18 months later, in November 2025, in the new budget, the government is asking Parliament to approve another increase of $415 billion in the debt ceiling, which would raise it to $2.5 trillion.
The government estimates that total debt by March 2027 would have exceeded the approved ceiling established in 2024 had there not been a contingency amount included in the ceiling.
In June 2024, the government had estimated that total debt as of March 2027 would be $2 trillion, but 18 months later, the government estimated that the debt on that same date has now increased by $68 billion. And the government’s debt ceiling has increased to $1.4 trillion, more than doubling over an eight-year period.
The debt of enterprise Crown corporations is also expected to increase significantly, from $376 billion as of March 2026 to $518 billion as of March 2029, increasing its debt by a third. The government says that this increase reflects the projected financing needs of enterprise Crown corporations. We shall probably hear more about this in the spring fiscal update.
Actual debt shows the same increasing trend line. The government’s debt 10 years ago was $918 billion; by 2019, it was at $1 trillion; by 2022, $1.5 trillion; and then to $1.8 trillion by 2025. We shall soon have the actual debt numbers for 2026, and I know it will be $2 trillion. Over a seven-year period, Canada’s actual debt has doubled.
The increase in Canada’s debt is astonishing. By continuing to borrow, it raises the issue of generational fairness.
The increase in the government’s debt has also resulted in increased debt-servicing costs for the government, which will crowd out spending on more economically and socially productive programs. Ten years ago, debt-servicing costs were $21 billion. This year, they are expected to be $55 billion, increasing to $71 billion in 2028-29 and $76 billion in 2029-30. The problem with these estimates is that the government’s projections are unreliable, and history has shown that debt‑servicing costs are almost always higher than the estimates.
A review of estimated debt-servicing costs for this year, 2025-26, over the past five years will indicate that Budget 2021 estimated $39 billion. Then it went to $46 billion in Budget 2023 and now $55 billion this year.
To put this $55 billion in context, the government expects to collect $54 billion from the goods and services tax this year, the same amount it is estimated to spend on debt-servicing costs, but next year, the amount to be collected in GST will not be sufficient to pay our forecasted debt-servicing cost.
David Dodge, a former governor of the Bank of Canada and a former Deputy Minister of Finance, authored a paper in 2020 in which he discussed the cost of increasing debt. He suggested that one of Canada’s fiscal anchors should tie the cost of debt-service charges to annual government revenues. Specifically, he recommended that debt-servicing costs not exceed 10% of annual government revenues.
At the time of his paper, Budget 2021 estimated that debt‑servicing costs for this fiscal year would be 9% of government revenues, below the 10% limit. Unfortunately — but not surprisingly — Budget 2025, released in November, indicates that public debt-servicing charges for last year were 10.5% of government revenues and are now expected to be 11% of government revenues in this fiscal year. For 2028-29 and 2029-30, the government is projecting public debt-servicing costs to be over 12% and 13%, respectively, of government revenues. Honourable senators, we are going in the wrong direction.
To conclude, the government is spending record amounts of money and assuming record amounts of debt to protect and transform our industries, strengthen our economy and empower Canadians. Let’s hope we aren’t disappointed. Thank you.
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.)
