Appropriation Bill No. 3, 2022-23
Second Reading
June 14, 2022
Moved second reading of Bill C-25, An Act for granting to Her Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2023.
She said: Honourable senators, I’m pleased to rise today to introduce the appropriation act for the 2022-23 Supplementary Estimates (A). Through this supply bill, the government is requesting Parliament’s approval of the planned spending proposals that are detailed in the Supplementary Estimates (A).
During each supply cycle, the appropriation bill acts as a vehicle through which payments from the Consolidated Revenue Fund are authorized for government programs and services. The voted amounts in these supplementary estimates represent maximum “up to” ceilings or estimates. It is therefore incumbent on me to remind honourable senators that it is not out of the ordinary if these amounts are not fully spent over the course of the year. The actual expenditures are listed in the public accounts, which are tabled after the end of the fiscal year.
As this chamber will remember, the estimates are part of a series of documents, comprised of the Main Estimates, supplementary estimates, departmental plans, departmental results reports and the Public Accounts. These documents provide important information and help us, as parliamentarians, scrutinize government spending.
The reality is that Canadians have the right to know how public funding is spent. Honourable colleagues, that is a key aspect of our parliamentary system. Documents such as Supplementary Estimates (A) provide the Canadian public with a detailed and transparent breakdown of how taxpayers’ money is used. They also help hold the government accountable for its spending.
Honourable senators, the Supplementary Estimates (A), 2022-23 were tabled in the Senate on May 31. With these Supplementary Estimates (A), the government continues to invest in Indigenous communities, the health and well-being of Canadians and their security, while also recognizing the importance of supporting international partners who share our democratic values.
As you well know, the supplementary estimates provide information on additional spending requirements that were not sufficiently developed at the time of the tabling of the Main Estimates or that were subsequently refined to reflect recent changes. As a whole, they provide information on $8.8 billion in new voted spending for 26 federal organizations. They also provide information on an additional $860 million in planned statutory budgetary spending.
Colleagues, these planned expenditures will support a variety of critical priorities, including support for Indigenous children and families, public health, support for Ukraine’s defence and measures to address climate change.
For context and awareness, it is helpful if we break down spending found in the estimates for the current fiscal year. The 2022-23 Main Estimates presented $397.6 billion in planned budgetary spending to deliver programs and services to Canadians. This consisted of $190.3 billion in voted expenditures and $207.3 billion in statutory spending already authorized through other legislation.
With Supplementary Estimates (A), the estimates to date for 2022-23 amount to $407.2 billion, including $199.1 billion in planned voted expenditures and $208.1 billion in forecast statutory expenditures. This represents a 4.6% increase in planned budgetary voted spending over the 2022-23 Main Estimates.
As honourable senators will be aware, there is a difference between voted and statutory expenditures. Voted expenditures require annual approval from Parliament through an appropriation bill like the one before us today. Statutory spending, on the other hand, is approved by Parliament through legislation other than an appropriation bill.
With that being said, allow me to provide a breakdown of some of the major items in these estimates.
The government is focusing on priorities that are important to Canadians, including $3.6 billion to support priorities for Indigenous communities; $1.4 billion for existing and emerging for COVID-19 treatments; $853 million to support Canada’s response to the invasion of Ukraine; and $323 million to encourage the use of zero-emission vehicles.
Notably, five organizations are each seeking $500 million or more.
These include the Department of Indigenous Services, which is seeking $2.2 billion; the Public Health Agency of Canada, which is seeking $1.5 billion; the Department of Crown-Indigenous Relations and Northern Affairs, which is seeking $1.4 billion; the Department of Public Safety and Emergency Preparedness, which is seeking $823.6 million; and the Department of National Defence, which is seeking $500 million.
Let me further detail these supports.
First, I want to speak to supports for Indigenous Canadians and their communities. Honourable senators, as part of our ongoing journey towards reconciliation, the Government of Canada is committed to making necessary investments to settle claims and support the infrastructure and services that are vital to Indigenous communities’ physical, mental, social and economic health and well-being.
Together, the departments of Indigenous Services and Crown-Indigenous Relations and Northern Affairs are proposing $3.6 billion in new spending in these estimates. This includes $2.1 billion to implement compensation agreements relating to First Nations Child and Family Services and Jordan’s Principle programs, including immediate initial reforms in child and family well-being programs and infrastructure; $900 million for negotiated specific claim settlements; $146 million for partial settlement of Gottfriedson litigation; $130 million for the Federal Indian Day Schools Settlement Agreement; $99 million towards addressing the ongoing legacy of Indian residential schools; and $75 million announced in Budget 2022 to support affordable housing and related infrastructure in the North. When combined with the funding in the Main Estimates, the Department of Crown-Indigenous Relations and Northern Affairs plans on spending approximately $3.3 billion on specific claims.
Colleagues, these investments are not only necessary but vital to help towards reconciliation.
Canadians from coast to coast have experienced various natural disasters brought on by climate change.
The science is clear: These destructive events will become increasingly more common.
As the government works to achieve its climate plan goals, it also realizes that Canadians who have been affected by natural disasters need support and relief.
These supplementary estimates provide $823.6 million in funding to reimburse provinces’ and territories’ costs for disaster events that occurred across the country over the last decade.
Funding will cover costs associated with the 2016 wildfires in Fort McMurray, Alberta, and the 2017 wildfires in Saskatchewan and British Columbia; the 2017 ice storm in New Brunswick; the 2017 spring floods in Newfoundland and Labrador and in Quebec; and, more recently, the 2020 spring floods and heavy rainstorms in Manitoba.
These funds will go to the Disaster Financial Assistance Arrangements, which provide provincial and territorial governments with federal support to help cover response and recovery costs.
Honourable senators, these Supplementary Estimates (A) also propose funding for one of Canada’s staunchest allies, Ukraine. Indeed, Canada stands shoulder to shoulder with Ukraine and its people. As honourable senators well know, the government has already taken several steps to provide support. Canada has sent humanitarian and military aid to Ukraine since the invasion began and is taking measures to support displaced Ukrainians as they arrive in Canada.
These Supplementary Estimates (A) include approximately $853 million for Canada’s response to the invasion, and $500 million is proposed for military aid, including non-lethal and lethal equipment, weapons and associated training, maintenance and management.
Support isn’t just about weapons and equipment. Indeed, $352.7 million is proposed for special immigration measures for Ukrainian refugees. These measures include chartered flights, temporary hotel accommodations, application processing, a dedicated hotline for immigration questions, settlement and income support.
Honourable senators, I commend the work the government has been doing in helping settle displaced Ukrainians. A special pathway was created to facilitate the immigration process by eliminating many of the usual visa requirements. The Canada-Ukraine Authorization for Emergency Travel, or CUAET, helps Ukrainians and their family members come to Canada as quickly as possible and provides them with the opportunity to work and study while in Canada.
Ukrainians may apply for a three-year open work permit at the same time, and most of the usual requirements associated with a visitor visa or work permit will be waived. The government understands that Ukrainians who come to our country may have a lot of uncertainty about their future. They are looking for stability as they get back on their feet. This is why Ukrainians who are already in Canada have the option to extend their visitor status, work permits or study permits so they can continue to live and work or study in Canada temporarily.
Honourable colleagues, on a different front, Canada continues to be engaged in a fight against the COVID-19 pandemic.
We have come a long way and learned a lot. We know that taking precautions like wearing a mask helps reduce transmission. We also have vaccines and therapeutics that are helping stave off severe illness.
But we know that we cannot get too complacent. It’s important to remain vigilant with this ever-changing and mutating virus.
That is why the Supplementary Estimates (A) propose $1.8 billion to support the government’s response to the pandemic.
As honourable senators will note, this builds on the $9.7 billion in planned spending for COVID-19 measures, including the economic response plan, that was in the Main Estimates 2022-23. This includes $1.4 billion for the Public Health Agency of Canada to procure additional COVID-19 treatments to meet the needs of provincial and territorial health systems.
As the Canadian entertainment industry recovers from the pandemic, $150 million from these estimates would go to Telefilm Canada to extend the Short-Term Compensation Fund for Canadian audiovisual productions until March 31, 2023. There is also $102.5 million for the pan-Canadian Sero‑Surveillance Consortium for studies to determine the extent of COVID-19 infections and immune responses in the Canadian population. Finally, $100 million is earmarked for the Department of Finance to improve school ventilation.
Senators will note that this was proposed statutory spending found in Bill C-8, the Economic and Fiscal Update Implementation Act, 2021, which received Royal Assent last Thursday.
Honourable senators, taken together, the proposed investments contained in these supplementary estimates will help move us forward as we make our way out of the pandemic and, as we do, the government’s commitment to transparency will remain steadfast. The Government of Canada is committed to making it easier for parliamentarians and Canadians to hold it to account for its spending decisions. For example, the Government of Canada’s InfoBase is an interactive online tool that presents a wealth of federal data in a visual way.
The ability to exercise oversight is one of the most important roles that parliamentarians can play on behalf of our citizens. To do this well, parliamentarians must have access to accurate, timely and easy-to-understand information on government spending. GC InfoBase provides that information. It contains the main and supplementary estimates, along with other data related to government finances, people and results.
Publishing expenditure datasets on such digital tools is central to providing parliamentarians and Canadians with more information on where public funds are going, and how they are being spent. I want to point out that the government welcomes feedback on its documents and processes.
In conclusion, honourable senators, the bill I have the honour to introduce today is important to implement the government’s commitment to the health and well-being of Canadians and other key priorities. The 2022-23 Supplementary Estimates (A) show that the government is responding to immediate needs while continuing to make long-term investments that benefit all Canadians.
Before concluding, please let me once again thank all the members of the Standing Senate Committee on National Finance for their thorough and important work. Now, honourable senators, I urge you to support this bill. Thank you.
Honourable senators, I would like to begin by thanking Senator Gagné for her comments on Bill C-25. As the critic of the bill, I have a few other comments.
First of all, Bill C-25 is supported by Supplementary Estimates (A), and it is requesting $8.8 billion in voted expenditures, so that’s requesting parliamentary approval, and it is forecasting a net increase of $860 million in statutory expenditures. This will increase budgetary expenditures for this year to $199 billion and increase the forecast in statutory expenditures to $208 billion.
With respect to Supplementary Estimates (A), in my last speech, I was talking about tracking the budget initiatives, and we don’t see new budget initiatives in the Main Estimates because the Main Estimates are tabled before we get the budget. When we get Supplementary Estimates (A), we start looking for these new budget initiatives and usually Supplementary Estimates (A) includes a substantial number of new budget initiatives, but this year, Supplementary Estimates (A) only includes seven new budget initiatives, and that’s expected to cost $1 billion.
There are a total of 211 initiatives in Budget 2022, which are estimated to cost over $7 billion. So if you take the 7 that are in Supplementary Estimates (A) and the 22 which already have statutory approval, there are still 182 budget initiatives yet to be funded in future appropriation bills. We’ll be looking for them in Supplementary Estimates (B), Supplementary Estimates (C) and maybe even in the subsequent year.
This is just to give you an idea as to how difficult it is to keep track of the new budget initiatives, because the Main Estimates and the budget document are misaligned. They just don’t match up. We still have a lot of tracking to do for those 182 budget initiatives.
Last year, Supplementary Estimates (A) included about half of last year’s budget initiatives, and there were probably about 280 budget initiatives last year.
I don’t know why the government has included so few Budget 2022 initiatives in Supplementary Estimates (A), and the Parliamentary Budget Officer couldn’t provide any insight into that issue.
In addition, the $8.8 billion being requested in Supplementary Estimates (A) includes $1 billion for six initiatives from last year’s budget. You can see how there has to be a matching up between all of the estimates documents and the budget.
There are the 2021 initiatives. They have yet to be funded in future initiatives, but given the lack of information to determine which budget initiatives from last year remain unfunded, we can’t identify them. I did ask the Parliamentary Budget Officer if he could identify them, and he did say that they would go back and look, but I don’t expect them to be able to identify them.
I think part of the issue is with the $13 billion gap that I mentioned in my speech on the earlier bill.
Honourable senators may recall that I’ve mentioned many times the difficulty in tracking budget initiatives to determine if and when they are funded. The Parliamentary Budget Officer recently indicated that he’s now going to track the implementation of budget initiatives, and he’s going to present them in an online tracking table on his website.
That’s good news, and it’s going to greatly assist us as parliamentarians in our review of government spending, but he’s only providing us a stopgap solution to a problem that’s created because the government is tabling two spending documents. He’s just trying to give us some assistance in matching up the two spending documents.
The Supplementary Estimates (A) document provides details on the $8.8 billion being requested in Bill C-25. I went back and looked at how much time our committee spent studying the $8.8 billion, and my colleagues on the Finance Committee probably won’t be surprised to hear me say this, but we spent three and a half hours studying the $8.8 billion being requested. I just felt that it simply wasn’t enough time to properly review how the government intends to spend the $8.8 billion. What I find in committee when we have so many competing obligations with regard to the budget bill, the Main Estimates and Bill C-8 is that we are in a time crunch.
When you don’t have enough time to get answers to your questions, you feel that you haven’t done a good job of analyzing the information that is in the estimates document.
So we received testimony from Treasury Board officials, the Parliamentary Budget Officer and officials from five organizations requesting funding in Bill C-25.
The Department of Indigenous Services is requesting $2.2 billion for compensation and reforms to the First Nations Child and Family Services program and to Jordan’s Principle program. So this $2.2 billion increases total departmental funding for this year to $42 billion.
Both programs are ongoing, and testimony indicated that our committee should further review the funding for these two programs and how they are delivered and administered, because when we received testimony from the departmental officials, there were a number of questions that were unanswered and there was, especially on my part, some confusion with regard to how the two programs overlapped.
The Public Health Agency of Canada is requesting $1.5 billion. That would bring their total funding to date for this fiscal year to $10 billion. So the $1.5 billion being requested will be used to buy additional therapeutics for existing and emerging COVID-19 treatments.
Officials did tell us that most of the $1.5 billion was funding that was reprofiled, and I’ve been trying to find some information on the source of the reprofiled funds and haven’t quite come to a solution on that, so that’s another area that has to be earmarked for follow-up.
The Parliamentary Budget Officer indicated that the Public Health Agency of Canada is requesting funding for medical research and vaccine development. Funding for medical research and vaccine development has decreased significantly while funding for therapeutics, vaccines and personal protective equipment and rapid tests have increased, demonstrating the changing needs of the pandemic.
The Department of Public Safety is requesting $823 million, which will bring their total funding for this year to $1.7 billion. The $823 million is for the Disaster Financial Assistance Arrangements program, and will be used to provide money to provincial and territorial governments to help pay for the costs of responding to and recovering from natural disasters.
The $823 million is part of the $1.9 billion announced in last year’s budget, which raises the question as to why the funding is only being requested now. This is part of the age-old problem where we’re getting budget initiatives from one year ending up in a document of another.
The Department of National Defence is requesting half a billion dollars in military aid for Ukraine. Officials also provided us with an update of their defence policy and their defence investment plan, which is being updated and released this fall. In past meetings, the committee has had difficulty in obtaining current information on the department’s capital projects. The Parliamentary Budget Officer issued a report in March analyzing the status of the departmental capital spending plan for 2017 to 2037.
The department has planned to spend $164 billion on 348 capital projects over a 20-year period. The analysis shows slippage in the first four years of the plan to 2021, and we already identified that in earlier committee meetings. So this funding has now been pushed to future years, notably 2023 to 2028, thus presenting further challenges to the department to rapidly wrap up capital spending during those five years. Departmental officials indicated that their updated investment plan will be released publicly in the fall of the year.
The Canadian Air Transport Security Authority also testified before the committee. They are requesting $329 million in addition to its base funding of $567 million, which is included in the Main Estimates. CATSA, as we know it, has been criticized over the past number of months for increasing lineups at airports and delays in screening passengers. That’s been on the news quite prominently lately.
Their testimony focused on the reason for the delays in screening passengers. They indicated that 1,750 of their 7,400 screening officers were laid off during the pandemic, but only 1,250 returned to their jobs. They currently have 6,800 screening officers, and they are trying to recruit an additional 1,000 screening officers.
They said that the problem is not the adequacy of the funding. They said there would be sufficient funding if they received the additional $329 million, but the problem relates to the labour market and the staffing of screening officer positions by third‑party screening contractors.
In addition, staff must be adequately trained, as part of the problem can be attributed to new staff or even returning staff. Although officials told us otherwise, passengers who travel extensively have said that there are problems regarding the consistency of screening procedures from one airport to another, as well as problems regarding secondary screening.
The Department of Finance has indicated an increase in statutory authorities in the amount of $1.2 billion primarily attributable to interest on mature debt and other interest costs. This brings the total cost of interest so far this year to just over $24 billion compared to the $26.9 billion forecasted in Budget 2022. We anticipate additional increases in interest costs will be included in Supplementary Estimates (B) and (C) since interest rates are rising and that interest costs will probably exceed the $29.6 billion forecasted in Budget 2022.
As we know, the government has committed in Budget 2022 to rein in spending by $9 billion through two expenditure review exercises. The Parliamentary Budget Officer told us that, based on the information provided by government, operating and capital spending can only grow by 0.3% a year in order to achieve the $9 billion in savings. That restraint, he said, will be more severe than what was undertaken in the early 2000 and 2010s. In addition, there were several government priorities announced in the electoral platform last year which are not yet included in the budget, as well as other pressures to increase spending. He did not believe it was credible that there will be the level of spending restraint required to meet the $9 billion in savings.
Treasury Board officials also testified at committee. One of the frustrations in reviewing requests for funding is the lack of performance information from organizations which are requesting large sums of money. Many of these organizations do not meet a substantial number of the performance indicators, so we do not know what the funding has achieved. Despite the lack of accountability information, funding to these departments and agencies continues to increase. The Department of Indigenous Services, Infrastructure Canada and Environment Canada are three of these departments.
Treasury Board is responsible for the financial oversight of governments, specifically overseeing how the government spends money on programs and services and how it managed. It also oversees the financial management of government departments and agencies. In other words, it’s the manager of the public purse.
Treasury Board also has a policy on results which requires each department and agency within a minister’s portfolio to publish a departmental plan and departmental results report. Given that many departments receiving significant and increasing levels of funding do not meet many of their objectives and do not demonstrate what their funding is achieving, the question remains as to why Treasury Board does not require improved accountability information from those departments.
Because there is insufficient results information available for many departments and agencies, it’s not possible to determine what results are being achieved. Funding provided is often in the millions and billions of dollars.
Treasury Board should require departments and agencies to include relevant performance targets for all funding approved and insist that those departments and agencies meet a significant number of their performance indicators. Without this information, we do not know what the funding provided is actually achieving.
These conclude my comments, honourable senators, on Bill C-25. I again would like to thank my colleagues on the Finance Committee for their support, for their questions and for their enthusiasm, and also to send them off to the chair and to all the staff who support us during our committee meetings. Thank you.
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.)
Honourable senators, when shall this bill be read the third time?
(On motion of Senator Gagné, bill placed on the Orders of the Day for third reading at the next sitting of the Senate.)
