Appropriation Bill No. 4, 2022-23
Second Reading
December 13, 2022
Moved second reading of Bill C-36, An Act for granting to His 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 bill for the 2022-23 Supplementary Estimates (B).
The government is requesting Parliament’s approval of the planned voted spending that is detailed in the Supplementary Estimates (B) through the appropriation bill before us today.
As honourable senators will know, Parliament’s approval of the Minister of Finance’s federal budget does not authorize the government to spend funds.
Rather, appropriation bills serve as the vehicle through which payments from the Consolidated Revenue Fund are authorized for government programs and services.
Therefore, it is the responsibility of those of us in Parliament to authorize government spending through the estimates and their associated appropriation bills, like the one before us today.
I would note that the voted amounts in these supplementary estimates represent maximum “up to” ceilings or estimates.
Actual expenditures are published in quarterly financial reports, and total 2022-23 expenditures will be listed in the Public Accounts of Canada, which are tabled after the end of the fiscal year.
The estimates — together with the public accounts, Departmental Plans and Departmental Results Reports, which, I want to remind colleagues, were tabled on December 7 — provide important information and help us as parliamentarians scrutinize government spending.
Colleagues, this scrutiny is essential to a well-functioning democracy. Canadians must know and have access to a detailed breakdown of where their tax dollars are going. Accountability is achieved when the government is open and transparent about how taxpayers’ dollars are spent. Accountability and good governance go hand in hand. Good governance, therefore, builds public confidence and trust in government.
As honourable senators know, the supplementary estimates provide information on incremental spending requirements. These requirements were either not sufficiently developed in time to include in the Main Estimates or have been refined to account for recent developments.
To date for this fiscal year, the 2022-23 Main Estimates presented $397.6 billion in planned budgetary spending, composed of $190.3 billion in voted expenditures and $207.3 billion in statutory spending.
The 2022-23 Supplementary Estimates (A) proposed an additional $9.7 billion in planned budgetary spending, made up of $8.8 billion in voted expenditures and $860 million in statutory spending across 26 federal organizations.
These Supplementary Estimates (B) provide information on $25.8 billion in planned budgetary spending, which breaks down to $20.8 billion in voted expenditures and $5 billion in statutory spending.
Taken together, both these supplementary estimates propose roughly the same amount of new spending as last year. This year, however, many initiatives were not ready in time for the spring estimates, so they are included in the estimates this fall.
Although statutory authorities receive Parliament’s approval through separate legislation, they are included in these supplementary estimates to provide information on departments’ total estimated expenditures.
With these supplementary estimates, the government continues to invest in priority areas such as support for Indigenous peoples, disaster relief and affordable housing.
Notably, eight organizations are each seeking $500 million or more. They are: the Department of Crown-Indigenous Relations and Northern Affairs, requesting $6.3 billion; the Department of Indigenous Services, requesting $2.2 billion; the Department of Public Safety and Emergency Preparedness, requesting $1.7 billion; the Treasury Board Secretariat, requesting $1.4 billion; the Public Health Agency of Canada, requesting $1.4 billion; the Department of Foreign Affairs, Trade and Development, requesting $1.2 billion; the Department of Citizenship and Immigration, requesting $1.2 billion; and the Canada Mortgage and Housing Corporation, requesting $694.6 million.
Colleagues, allow me to go over a few of the major areas of spending in these supplementary estimates.
Let me first start with the government’s support for Indigenous peoples and their communities.
Colleagues, this government is deeply committed to a renewed nation-to-nation relationship with Indigenous peoples — a relationship that is based on recognition of rights, respect, truth, cooperation and partnership.
Indigenous nations have the right to self-determination and self-government and rightfully aspire to restoring strong and healthy communities. As part of Canada’s ongoing journey toward reconciliation, the government is making necessary investments to support Indigenous peoples and their communities.
Honourable senators, these investments are making a real difference. They are helping settle long-standing claims, they are building important infrastructure and they are supporting services that are vital to the physical, mental, social and economic health and well-being of Indigenous communities.
Honourable senators, I would also note that the government is continuing the important work of improving housing infrastructure, supporting education and child care, and responding to the Truth and Reconciliation Commission’s Calls to Action.
It goes without saying that important progress is being made. For example, with the help of $5.6 billion in new funding announced since 2015, 137 long-term drinking water advisories have been lifted on reserve as of December 1. These new funds also prevented 230 short-term drinking water advisories from becoming long-term advisories.
In these Supplementary Estimates (B), $6.3 billion is allocated to the Department of Crown-Indigenous Relations and Northern Affairs. That represents an 86% increase over the department’s estimates to date for 2022-23. Allow me to provide a breakdown of some of the major items in this total.
As this chamber knows, the government is in active discussions with various Indigenous groups related to legal challenges.
Honourable colleagues, I want to assure you that the government is committed to resolving these challenges through respectful dialogue and mediation.
There is $3 billion being proposed in these supplementary estimates for out-of-court settlements to ensure that the department can quickly implement negotiated settlements should agreements be reached.
An additional $677.6 million in funding would go toward replenishing the Specific Claims Settlement Fund, and $673.5 million is earmarked for the settlement of the Blueberry River, Doig River, Halfway River and West Moberly First Nations’ Treaty 8 Land Entitlement specific claims.
It is important to note that specific claims are grievances against the federal government regarding alleged failures to fulfill our historical treaty obligations or mismanagement of Indigenous lands and assets.
Claims and tribunal awards valued at up to $150 million are paid from the Specific Claims Settlement Fund. The fund is therefore being replenished based on anticipated payments for negotiated settlements and tribunal awards.
Specifically in these supplementary estimates, the government is proposing $673.5 million for compensation and administration costs for the Federal Indian Day Schools and Sixties Scoop settlement agreements.
Childhood claims refer to a broad category of past and ongoing legal actions against the Government of Canada. This includes experiences Indigenous claimants had relating to residential schools, boarding homes, Indian hospitals, adoption, and foster care. The funding will be used to make compensation payments related to the Federal Indian Day Schools Settlement Agreement and to cover the cost of the ongoing management of childhood claims, including payments for existing agreements.
Lastly, $458.2 million is allocated for First Nation, Inuit and Métis housing. The funds would be used to support site planning and preparation, new construction, major and minor repairs, land and lot development, operations and maintenance, capacity support, and other housing-related needs.
Honourable senators, it will indeed take time to address the legacy of these historical wrongs and vital needs, but the government’s investments are making a difference. They are helping address inequalities that exist between Indigenous and non-Indigenous peoples in Canada.
I would now like to address the second major spending item in these supplementary estimates: funding for disaster assistance. From coast to coast to coast, Canadians have experienced various natural disasters brought on by climate change. The science is clear: These destructive events will continue, and without continued action to address climate change, their frequency will only increase.
As the government works to achieve a comprehensive climate plan, it also realizes that individual Canadians affected by natural disasters need support and relief.
In the event of a large-scale natural disaster, the government provides financial assistance to provincial and territorial governments. As honourable senators well know, federal funding to provinces and territories is based on a cost-sharing formula, with a wide range of eligible expenses. Those include items like cleanup and repairs to public infrastructure, property of individuals, small businesses and farms.
These supplementary estimates propose $1.5 billion — that is out of $1.7 billion — for disaster financial assistance to assist British Columbia with its response and recovery costs from recent natural disasters, including the 2020 flood and landslides as well as the 2021 fires, floods and landslides.
In its study, Treading Water: The impact of and response to the 2021 British Columbia floods, the Standing Senate Committee on Agriculture and Forestry shed light on challenges faced in southwestern British Columbia with flood control and emergency preparedness. I would like to commend the committee for their excellent work.
Honourable senators, although we have come a long way in our battle against COVID-19, we all know the pandemic is not over yet.
This is particularly the case in developing countries, which have struggled to obtain the proper testing and therapeutics.
The government believes Canada has an important role to play in vaccine equity around the world.
That is why these supplementary estimates propose allocating $732 million to the Department of Foreign Affairs, Trade and Development to provide developing countries with vaccines, testing and therapeutics to fight COVID-19.
This funding will be used to procure and distribute COVID-19 vaccines, diagnostic tests, and therapeutics, as well as to build capacity in developing countries’ health systems.
In countries with low vaccination rates, the funding will support COVID-19 vaccine delivery, vaccine production, and outreach and awareness campaigns to increase vaccine confidence.
We all also know that COVID-19 is not done with us yet. As the virus continues to evolve, Canada will be prepared.
With this in mind, $696.2 million is proposed for the Public Health Agency of Canada.
The funding would support the continued development and acquisition of vaccine doses, including new formulations to provide the best protection against COVID-19.
With these investments, we will continue to address the impacts of COVID-19 both in Canada and abroad.
Honourable senators, we also know that Canada’s housing shortage is making it difficult for Canadians to find affordable housing. Budget 2022 proposed measures that, in partnership with actions taken by other orders of government, will put Canada on the path to double the construction of new housing and meet Canada’s housing needs over the next decade.
The Supplementary Estimates (B) include funding for the following housing measures in Budget 2022: $750 million to provinces and territories for transit and housing, which was authorized under Budget Implementation Act, 2022, No. 1; as mentioned earlier, $458.2 million for self-governing and modern treaty First Nation, Inuit and Métis housing; $441.6 million for the Rapid Housing Initiative, which aims to create new affordable housing for people and populations who are vulnerable; and $10.3 million to co-develop an urban, rural and Northern Indigenous housing strategy.
These supplementary estimates further build on those measures. In addition to funding announced in Budget 2022, I’m pleased to say that these estimates also contain funding for a number of other Canada Mortgage and Housing Corporation programs, such as $91.8 million for the Affordable Housing Innovation Fund; $38 million for the Federal Lands Initiative, which supports the transfer of surplus federal lands and buildings to be developed or renovated for use as affordable housing; and $27 million for the Rental Construction Financing Initiative.
At the end of the day, every Canadian deserves a safe and affordable place to live and raise their families.
Honourable senators, the proposed funding in these estimates demonstrates the government’s commitments to priorities at home and abroad, from investing in Indigenous communities to providing disaster financial assistance and providing programs for affordable housing.
If there is one thing that world current events have taught us, it’s that we are all in the same boat. The estimates show that the government is responding to immediate needs while continuing to make long-term investments that benefit all Canadians.
Before I conclude, I would like to thank, once again, the Standing Senate Committee on National Finance for its study. Thank you for your hard work. I appreciate the time you have devoted to studying the various financial bills throughout the year and especially during supply periods. Your input is greatly appreciated. Esteemed colleagues, I urge you to pass this bill without delay.
Thank you.
Honourable senators, I rise to speak to the government’s fourth appropriation bill this year, following Bills C-16, C-24 and C-25.
This appropriation bill is requesting approval to spend another $20 billion. In addition to the $20 billion being requested, the government already has parliamentary approval to spend $200 billion, which was approved by the previous three appropriation bills. Approval of this bill will increase spending approved by appropriation bills to $220 billion.
There is also another $215 billion approved by legislation other than appropriation bills, such as the Canada Health Transfer via the Federal-Provincial Fiscal Arrangements Act and public debt charges, which are approved by the Financial Administration Act.
I have said in this chamber a number of times that parliamentarians should spend more time reviewing statutory spending. The $215 billion in statutory spending is comparable to the $220 billion requested in appropriation bills. We studied the $220 billion in the appropriation bills, yet there is no comparable study of the $215 billion in statutory spending.
Honourable senators, government spending plans change many times throughout the year, and that presents a challenge for parliamentarians when reviewing those plans. To give you an idea of the complications of following the government’s spending, consider the following. Prior to April 1, we approved the first appropriation bill. Next, we received the budget bill, which approves some of the spending in the budget, but not all. In June, we received the second and third appropriation bills based on Main Estimates and Supplementary Estimates (A). In November, we received the Fall Economic Statement and the bill to implement some of the spending in the Fall Economic Statement, Bill C-32, which is before us this week.
In December, we received another appropriation bill based on Supplementary Estimates (B). This is Bill C-36, which is also before us today. Then in March, we will receive another appropriation bill, based on Supplementary Estimates (C). Some budget items and some fiscal update items are included in Supplementary Estimates (C).
Interspersed with all these bills, there are other bills that will provide parliamentary approval to spend money on other programs. For example, Bill C-31 was recently enacted, giving the government approval to spend on a dental program for children and a rental housing program.
To further complicate the process, the government will request approval for part of a program in one bill, while the funding for the remainder of the program will be requested in other bills. This was the process used for the new $30 billion child care program, in which $2.6 billion of the $30 billion was approved by the Budget Implementation Act, 2021, while approvals for the remaining amounts are being requested in appropriation bills.
There are also numerous other transactions that fall outside the appropriation bills and are not studied during our review of the appropriation bills and estimates documents. As I mentioned earlier, statutory spending so far this year exceeds $200 billion, Employment Insurance benefits are $24 billion, and the Canada Child Benefit is another $24 billion. There are also a number of other significant transactions that affect government spending that are not included in our study of the estimates, the supplementary estimates or the appropriation bills.
Honourable colleagues, my purpose in explaining the approval process for government spending is to convey to you the difficulties in tracking government spending. The process used by the government to obtain parliamentary approval to spend money is, as former president of the Treasury Board Scott Brison said, “totally irrational” or, as the Parliamentary Budget Officer recently said in a podcast with The Hill Times, “an absolute mess.” To Mr. Brison’s credit, he did attempt to fix the process or at least streamline it, but after his departure, no further work was undertaken by the government to simplify the process.
This government was elected in 2015 on a platform that promised open and transparent government. Specifically, the government promised to “change Parliament’s financial processes so that government accounting is more consistent and clear.” The commitment went on to say, “We will ensure accounting consistency among the Estimates and the Public Accounts.” We are still waiting for the government to honour that commitment.
Honourable senators, it is time for the government to fix the problem with the estimates process or at least make a start. Actually, it is past time.
This appropriation bill is requesting additional funding of $20 billion for 89 departments and agencies. Seven organizations are requesting over $1 billion each, and the Canada Mortgage and Housing Corporation is requesting $695 million. There is also $7 billion in statutory spending, for which approval has already been provided by other legislation. Included in this $7 billion is $2 billion for a one-time top-up to the Canada Health Transfer, just under $2 billion for assistance to Ukraine, $1.8 billion for COVID-19 tests and $750 million for provinces and territories for transit and housing. We don’t study any of that spending.
One of the overarching commitments of this government is their commitment to openness, transparency and accountability. I have often spoken in this chamber as to the lack of openness and transparency and the delay by government in tabling accountability documents such as the public accounts, the Debt Management Reports and the Departmental Results Reports. In fact, my comments so far today explain the difficulties in following the government’s array of spending plans.
The C.D. Howe Institute, a well-respected think tank, regularly provides a report card on the usefulness of the budgets, estimates and financial statements of the federal, provincial and territorial governments. The most recent report, released in September, reviewed the financial statements for 2020-21 and the budgets and estimates for 2022-23 of the federal, provincial and territorial governments.
Alberta was at the top of the class with an A, with the Yukon close behind with an A-. In the B-rating categories were Saskatchewan, New Brunswick, Ontario and Quebec. In the C categories were P.E.I. and Nova Scotia. In the D category was the federal government, Newfoundland and Labrador, Manitoba, British Columbia and the Northwest Territories. This was an improvement for the federal government because last year, it scored an F rating.
I do not understand why the federal government, with all the resources at its disposal, rated an F score last year on financial accountability documents and only a D score this year. The government should be able to do better than this. Canadians and parliamentarians deserve better.
The Departmental Results Reports were released on December 6, much too late to be of any use during our review of Supplementary Estimates (B), this Appropriation Bill C-36 and Bill C-32. A brief review indicates that 84 organizations established 2,676 performance indicators or targets, of which 1,331 met their target — just under 50%.
While a complete review of the Departmental Results Reports has yet to be completed, I can offer an example of the challenges a detailed review will identify. The government launched an Early Learning and Child Care strategy in 2020 at an estimated cost of $30 billion over five years. Objectives — or performance targets — included a 50% reduction in average fees of child care by the end of this month, the creation of 250,000 child care spaces over five years as well as the creation of around 50,000 child care positions. The department did not establish performance targets to annually measure the number of additional child care spaces created or the number of child care positions. Rather, the department is measuring whether access to early learning and child care has increased, with a target of 40,000 and a target date of March 31, 2022.
However, the Departmental Results Report indicates results are not available for 2019-20, 2020-21 or 2021-22 — just no results available. As well, there are no performance targets or criteria to measure whether child care fees have been reduced by 50% by the end of this month. Without this performance information, the government does not know whether its $30-billion child care strategy is successful.
In his report on the Main Estimates in March, the Parliamentary Budget Officer provided an overview of the increase in Indigenous spending within the two Indigenous departments. Spending in the two departments has increased from $14 billion in 2018-19 to $57 billion so far this year.
A significant part of the funding in Indigenous Services Canada is for out-of-court settlements, with $20 billion related to the compensation for Indigenous children and families harmed by the underfunding of child and family services. The government and the Assembly of First Nations had reached an agreement in principle to disburse the funds, but the Canadian Human Rights Tribunal did not support the agreement in principle. Officials from Indigenous Services Canada had informed the Finance Committee that the federal government and the Assembly of First Nations would seek a judicial review of the Canadian Human Rights Tribunal’s decision rejecting the $20 billion settlement.
Honourable colleagues may recall that I had asked Senator Gold a question on this matter last month. At a recent Finance Committee meeting, department officials and Treasury Board officials assured the committee that the $20 billion is frozen and that “it remains in our appropriation. . . . It’s dedicated to compensation, and it cannot be spent on other priorities.”
Last week, the Assembly of First Nations passed a resolution urging Canada to place a minimum of $20 billion earmarked for compensation into an interest-bearing account and compensate all victims covered by both the tribunal’s rulings and the class action. Given the significant funding provided to both departments for various claims and settlements, it is important for our Finance Committee to continue its oversight of these significant expenditures.
Supplementary Estimates (B), which supports this Bill C-36, includes $2 billion in statutory spending for the Canada Health Transfer. This is in addition to the $45 billion disclosed in the Main Estimates. This $2 billion was provided to jurisdictions to reduce backlogs of surgeries and other procedures during the pandemic.
The Canada Health Transfer is the largest transfer to provinces and territories to help pay for health care. Our health care system is in crisis, and provinces and territories have asked the federal government for a $28 billion increase in health care funding, which they say will increase the federal contribution toward health care costs from the current 22% to 35%. There is no provision in any spending document for any additional funding for the Canada Health Transfer.
Honourable senators, our government is facing significant economic challenges, along with problems in delivering basic government services. Inflation has taken hold, and Canadians are struggling to cope with the increasing costs of food, fuel and other necessities.
On December 5, four Canadian universities published Canada’s Food Price Report 2023, which predicts food prices will continue to increase between 5% to 7% in 2023, with the costs of vegetables, dairy and meat increasing the most. Food bank usage is up across the country. Interest rates continue to rise even though the government had assured Canadians that interest rates would remain low. Given the increase in inflation, Canadians are now borrowing more to make ends meet.
Homeowners are facing increased mortgage payments. Some Canadians who purchased homes when housing prices peaked now have mortgages that exceed the value of their homes.
Increased interest rates and more borrowing are also increasing government’s debt servicing costs to the extent that government’s debt servicing program is now one of its most expensive programs. Along with these economic challenges, economists are warning of a recession as we head into 2023.
Canadians cannot access health care. More Canadians have no family doctor, and there are long lineups for services at clinics and emergency rooms. Surgeries and diagnostic services are postponed, and our health care providers are overwhelmed. Especially concerning is the impact that the lack of health care services is having on our children. Over-the-counter medications for children are in short supply.
The government is challenged to provide other public services. There are lineups at passport offices. Applications by veterans for financial assistance and services are backlogged, and of the 2.2 million immigration applications outstanding, approximately 1.2 million are backlogged.
Even access to information requests are backlogged while the objective of the Access to Information Act is, “. . . to enhance the accountability and transparency of federal institutions . . . .” Canada’s Information Commissioner recently told a standing committee in the other place that the government failed to meet its legislated timelines on more than 30% of the 400,000 access to information requests made in the last year.
Honourable senators, Canadians are waiting for their government to take a leadership role. How much longer must they wait?
Are senators ready for the question?
It was moved by the Honourable Senator Gagné, seconded by the Honourable Senator Gold, that this bill be read a second time.
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.)
