Appropriation Bill No. 1, 2021-22
Second Reading
March 30, 2021
Moved second reading of Bill C-27, An Act for granting to Her Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2022.
She said: Honourable senators, I rise for a second time today to introduce Bill C-27, Appropriation Bill No. 1, 2021-22. As a reminder, an appropriation bill is a mechanism for withdrawing the necessary funds from the Consolidated Revenue Fund to cover expenditures related to government programs and services. This is the first appropriation bill for the fiscal year beginning April 1, 2021.
As you know, an interim supply bill is a regular part of the normal supply cycle. Every winter in the Main Estimates, the government sets out the amounts it needs to fund its operations for the fiscal year ahead.
Soon afterwards, it tables the interim supply bill to authorize funding for the first three months of the fiscal year until parliamentarians can adequately study and approve the Main Estimates.
Last year, the government’s supply bills followed a different path. As you’ll recall, on April 20, 2020, in response to the extraordinary circumstances resulting from the onset of the coronavirus pandemic, Parliament passed a motion to temporarily modify Standing Order 81.
This resulted, among other things, in extending the study of the Main Estimates for 2020-21 until December — seven months later than in previous years.
This was the first time such an exceptional approach was taken for the business of supply. Typically, departments receive full supply for Main Estimates in June. However, it was necessary due to the extraordinary circumstances brought about by the spread of COVID-19. In addition, under the temporarily modified Standing Order 81, a second interim supply bill was also introduced in June for parliamentarians to consider. This was needed to support the programs and operations of federal organizations between July and December. This approach recognized the real cash pressures some departments and agencies were facing as they delivered core programs and services to Canadians and also responded to extraordinary pressures and the impact of the pandemic. It also respected Parliament’s right to a meaningful opportunity to study the government’s Main Estimates. This year, we’re back in a typical supply cycle.
The interim supply bill for fiscal year 2021-22 covers a portion of the government expenditures set out in the Main Estimates, which were tabled in the House of Commons on February 25. It requests a sum not exceeding $59.3 billion. This is spending that has already been included in the Main Estimates and does not represent new spending. As with typical interim supply bills, the amounts requested are based on twelfths of the amounts in the Main Estimates, notionally corresponding to monthly cash requirements. As for the Main Estimates, they provide information on $342.2 billion in proposed spending for 123 organizations, including $141.9 billion in voted expenditures and $200.3 billion in statutory expenditures.
Funding in the Main Estimates and in this interim supply bill will allow the government to continue to make investments Canadians need to address the effects of COVID-19 and help establish conditions for an economic recovery. It reflects the government’s response to the COVID-19 pandemic, from economic support to individual Canadians and businesses, to vaccine funding, expanded support for mental health tools and virtual care, among other investments. Of the $342.2 billion in proposed spending outlined in the Main Estimates, $22.7 billion is related to COVID-19 pandemic response.
In its response, the government launched programs like the Canada Emergency Response Benefit, the Canada Emergency Student Benefit and the Canada Emergency Wage Subsidy, and targeted support for regions, economic sectors and not-for-profit organizations helping Canadians. Doing so puts real pressure on many government departments as they continue to deliver not only the core programs and services, but also provide emergency measures.
Honourable senators, the government’s job is to ensure that all federal organizations can continue to deliver their core programs and services, but it is also to bring in emergency measures to provide the programs and services Canadians rely on every day to meet their needs when it comes to COVID-19.
These federal organizations simply must have the necessary financial capacity to do that. The interim funding proposed in the bill will provide them with the necessary funds until the Main Estimates are reviewed and debated and full supply is passed later this fall.
Honourable colleagues, I would also like to say a few words about the estimates process, interim supply being a part of that, and about transparency in government spending. The estimates are an essential component of our parliamentary system and help ensure accountability and transparency with respect to the government’s use of public funds.
Canadians and parliamentarians have the right to know, scrutinize and question how all public funds are spent. To that end, I would invite my honourable colleagues to consult all the additional information on the government’s spending plans in the recent estimates.
For each of the documents related to the Main Estimates, the government has published a detailed listing of the expenditure authorities approved by Parliament through other legislation, including a complete breakdown of planned expenditures by standard object, such as personnel, professional services, transfer payments and more. This information can also be found in GC InfoBase, a user-friendly online tool.
Honourable senators, the design of this type of digital tool and the publication of data sets on expenditures give us the opportunity to review and examine the government’s commitment to providing parliamentarians and Canadians with more information so that they know where public funds are going and how they are being spent. In order to continue fulfilling its duty to be accountable and open, the government also presents the actual expenditures from the public accounts at the end of each fiscal year.
Honourable senators, I note that the Government of Canada has committed to be open and transparent with Canadians and their representatives during the COVID-19 crisis. The government has implemented special measures to help individuals, businesses and communities across Canada during this difficult time. Parliament adopted many of these measures through emergency bills and they continue to help Canadians during this crisis.
Honourable colleagues, this bill is vitally important to the ongoing health and well-being of Canadians. I want to thank all of you for once again helping to protect Canadians at this difficult time. I also want to once again recognize the hard work of the members of the Standing Senate Committee on National Finance, which conducted an in-depth study of this bill. Their efforts were greatly appreciated.
Thank you. Meegwetch.
Honourable senators, Bill C-27 is the first supply bill for the new fiscal year, 2021-22. It’s referred to as the interim supply bill and it effectively provides an advance of funding laid out in the Main Estimates to allow the government to operate until the main supply bill is passed, which usually occurs in June.
I’m going to start by speaking about the supply bills from last year because the supply cycle, as we know it, flows from year to year, so it is important to look at the supply bills from the previous year. Initiatives from the previous years continue into the next year, so each year cannot be looked at in isolation. Last year was a different year because of the pandemic, so some pandemic — or COVID-19 — initiatives from last year will continue into the new year, and that is where I will begin my comments.
Last year was a challenging year for parliamentarians and others who were trying to track the government’s COVID-19 spending initiatives. The government started off with the disclosure of a biweekly COVID-19 report and provided this report to parliamentarians until early August. When Parliament was prorogued in early August, the government ceased providing the report and never resumed its disclosure. As a result, it became almost impossible to track COVID-19 spending. I raised this issue a number of times last year — on three occasions with Senator Gold in this chamber, with Finance Minister Freeland and with Treasury Board President Duclos.
The Parliamentary Budget Officer also indicated in a number of his recent reports that the information on COVID-19 spending is lacking. He said there’s no public document published by the government that provides a complete list of all COVID-19 measures announced to date or updated cost estimates. As a result, we can’t track this spending.
The Parliamentary Budget Officer also makes another interesting observation. He says that while not all COVID-19 spending is made public by the government, federal departments and agencies are required to report this information and update the government’s central financial management and reporting system with actual spending data on a monthly basis. In other words, the data is available. The government just won’t provide it to parliamentarians. The Standing Senate Committee on National Finance has also recommended in recent reports that the government resume disclosure of this COVID-19 spending information.
On March 10, the House of Commons’ Standing Committee on Government Operations and Estimates passed a motion regarding COVID-19 spending data. Apparently, they’re looking for the same data I’m looking for. Specifically, the motion read as follows:
. . . the committee send for, from the Treasury Board Secretariat, all monthly COVID-19 expenditures reports and COVID-19 spending data as disclosed by the chief financial officers of all respective departments and that these documents be provided to the committee no later than Wednesday, March 17, 2021, and then update this committee on a monthly basis by the 15th of the month.
So there are parliamentarians on the other side also looking for financial information on the government’s COVID-19 spending. I await with interest the response of the government on this matter.
To conclude, the government is refusing to disclose information on its COVID-19 spending to parliamentarians, thus making it difficult for us to provide the required oversight. While the government representatives do indicate that the government is transparent and accountable, I can assure my honourable colleagues that’s not the case. I work with these data on a daily basis, and while data are available at a very high level, detail is not sufficient in order to provide the oversight.
When you factor in other issues, such as the lack of a budget for two years; a proposed increase in the government’s borrowing authority, which is included in Bill C-14, currently in the House of Commons; and the refusal to provide basic financial information requested by parliamentarians, we should be concerned.
Honourable senators, interim estimate supply bills are generally not studied by the Standing Senate Committee on National Finance. Rather, interim supply bills are passed by the Senate, and issues relating to Interim Estimates are raised during our study of Main Estimates on the main supply bill. However, a review of Bill C-27 and its schedules, along with the cursory review of Main Estimates, does provide some information and raises some interesting questions.
First, neither the Main Estimates nor these Interim Estimates for next year identify COVID-19 initiatives. Once the pandemic was declared, the government identified its COVID-19 spending initiatives in all its estimates documents, including Supplementary Estimates (A) last year, Supplementary Estimates (B) and Supplementary Estimates (C).
However, the government is no longer providing this information. Honourable senators may recall that I asked Senator Gold two weeks ago why government is no longer providing this information. Without this information, it will be much more difficult for parliamentarians to track COVID-19 spending.
Last year, the Senate approved Interim Estimates of $44 billion. This year, approval is being requested for $59 billion, an increase of $15 billion. As I indicated previously, the Interim Estimates provide funding for the government to operate until main supply is approved, usually in June. Therefore, I would expect Interim Estimates to request funding for about a third of the year. Last year, the government requested 35% of its Main Estimates funding, while this year it is requesting 41% of its Main Estimates funding.
While I appreciate that all or most of the funding for some initiatives, such as grants, may be requested in Interim Estimates, explanations for other amounts cannot be determined until we review the Main Estimates. For example, the Public Health Agency of Canada is requesting eleven-twelfths of some of its funding. This may be related to COVID-19 initiatives, but since the government no longer identifies COVID-19 initiatives, it is not possible to reach any conclusion.
Compare this to the funding requested in the Interim Estimates for the Leaders’ Debate Commission. Government is requesting eleven-twelfths of the Main Estimates funding in this bill. Since we are expecting an election this year, providing most of the funding upfront is plausible.
I would be remiss if I concluded my comments with no references to the financing of the government’s spending plans, including the Interim Estimates as outlined in Bill C-27.
Bill C-14, which is now before the other place, proposes to raise the government’s debt ceiling to $1.8 trillion from $1.1 trillion, which was established by Parliament in 2017. Given the concerns expressed by many individuals and organizations over the significant proposed increase in the government’s debt ceiling, I expect Bill C-14 will be referred to the Standing Senate Committee on National Finance for study, and I will reserve any other comments on the proposed borrowing until we study that bill.
Honourable senators, in closing, I thank my colleagues on the National Finance Committee for their excellent work. I also thank the clerk of our committee, Maxime Fortin, and her team for their support over the past year.
Honourable senators, this concludes my comments on Bill C-27.
Honourable senators, today I want to speak to Bill C-27.
The 2021-22 Main Estimates have been shaped by a pandemic. Now more than a year old, that pandemic has disproportionately ravaged the health, economic situation, safety and well-being of Canadians who are most marginalized. This devastating impact is not, however, only due to a virus and it will not be cured by a vaccine. Too often, policy choices in documents like these, made in places of privilege like this and the other place, result in actions that, however inadvertent, can seriously harm people.
Current economic policies normalize poverty and condone inequality, fail to ensure access to basic necessities and human rights, and leave people to fall through the cracks into need and into danger, into the streets and into institutions, not just during national emergencies but every day.
The ongoing COVID-19 response measures referenced in the Main Estimates include the Canada Emergency Wage Subsidy, Canada Emergency Rent Subsidy for businesses, and the Canada Recovery Benefit and Canada Recovery Caregiving Benefit for individuals who have lost jobs and income. These measures have mostly preserved the economic status quo by aiming to prevent those above the poverty line from dropping below it, instead of ensuring that no one is left behind in poverty.
People with the least are suffering and dying more during this pandemic.
Haunting the margins of these policies are the realities that 1 in 10 of us living in Canada — disproportionately women, newcomers, those who are racialized, those living with disabilities — are fighting through this pandemic without adequate supports to rebound out of poverty: women with disabilities who weren’t working or who lost work but couldn’t access CERB because they were on social assistance, relying on food banks and unable to afford masks or disinfectant; women trapped in isolation with an abuser without the economic means to leave, and with shelters full or presenting risk of COVID; women on the street facing fines for violating curfews or stay-at-home orders because they do not have a safe place to stay; women holding precarious part-time jobs that have been recognized as essential during this pandemic and which put them at risk of COVID-19, but which do not pay enough to meet even basic needs.
Bill C-27 arrives in this place under the looming shadow of a budget — anticipated in the coming weeks — that will make clear whether the government intends to return Canada to the status quo or if it will insist on meaningful recovery that moves all of us definitively forward, not only from this pandemic but from the circumstances of poverty and inequality that exacerbate its worst effects.
This chamber’s National Finance Committee and its counterpart in the other place have both been clear on the need to address individual Canadians’ economic insecurity and marginalization as part of recovery. They have both called unanimously for urgent consideration of a national guaranteed livable basic income. The majority of senators in this place have urged the same. Will the government heed this advice? Will it recall its commitment to implementing the calls for justice of the National Inquiry into Missing and Murdered Indigenous Women and Girls, including the call for a guaranteed livable income that would help to redress sexism and racism, and help women to be safer?
The government has repeatedly recognized the harmful human social and economic costs of poverty and has committed to eliminating poverty.
Canada’s experience with the Guaranteed Income Supplement for seniors and the Canada child benefit has shown that guaranteed income programs can meaningfully lift people out of poverty in ways that contribute to jobs, economic growth and GDP. Pilot programs in Manitoba and Ontario have demonstrated that the security provided by guaranteed livable income makes people more likely to seek out work, start businesses, pursue education and artistic endeavours, and participate positively in their communities.
The CERB and its successor programs have proved that Canada has the ingenuity and the capacity to deliver a program on the scale of a national guaranteed liveable income. So why hasn’t guaranteed livable income happened yet?
I have to imagine that part of the reticence is cost — sticker shock, if you will — because guaranteed livable income at first glance, at least, appears to involve significant and recurring outlays. The Parliamentary Budget Officer suggests that a starting annual cost might be $79 billion.
This amount does not, however, account for tens of billions of dollars in savings each year from rolling some existing federal income supports, such as the GST tax credit, into a guaranteed livable income program. Nor does it account for the tens of billions of dollars more in savings as a result of replacing provincial and territorial social assistance programs in a way that provides a more effective springboard for transitioning out of poverty.
More fundamentally, however, Canada routinely absorbs without question into its budgets and estimates the costs of not addressing poverty, costs that, if pulled together as a line item, would amount to at least $72 to $84 billion per year. The cost of poverty includes extra spending on emergency health care costs and on police and prisons. It also includes increased costs of programs that treat the worst symptoms of poverty but still, at the end of the day, keep people on the brink of economic crisis — programs like food banks and homeless shelters.
Another part of the conversation about how to pay for guaranteed livable income includes taxes. Think for a minute about how provincial and territorial social assistance programs, the very programs that guaranteed livable income measures aim to replace, are scrupulously designed based on an apparent fear that poor people will be selfish or greedy or be seen as doing well while they are receiving income supports. People are prevented from being able to keep assets like cars or accumulate savings that would help give them gain income security and ways of getting out of situations of crisis.
If people are able to find a job, any earnings in excess of a couple hundred dollars are clawed back at 100% and can even put them at risk of losing health care benefits. Who else in Canada is ever expected to work under these conditions?
Contrast this with how we treat and what behaviour we appear to accept as a reality for Canadians who have the most earnings. As colleagues like Senator Downe have emphasized, Canada loses billions of dollars each year through tax avoidance and tax evasion measures that allow those in Canada who are earning the most to pay significantly less than their fair share of tax. In 2019, Canada lost at least $8 billion of tax revenue to tax havens. Remedying these types of practices alone could net Canada an estimated minimum of $10 billion to $15 billion per year.
The problem doesn’t stop here, however. Between 1980 and the present day, the rate of income tax on Canada’s highest earners has dropped from 43% to 33%. Their corporate tax has dropped from 36% to 15%. At the same time, 90% of the benefits of capital gains tax breaks, stock option tax breaks and the dividend tax credit go to the richest 1%.
These too are costs that Canada has chosen to bear in its budgeting process. For example, a mere 1% tax on those with wealth over $20 million would generate $10 billion per year. A body like the Law Commission of Canada could play a vital role in guiding us through a systemic, evidence-based consideration of tax reform.
The current system means that the 40% of Canadians with the least financial resources hold only 1.2% of this country’s wealth, and last year during a pandemic and economic crisis, the wealth of Canada’s 44 richest people increased by at least $53 billion.
As we anticipate a budget that is promising to deliver economic recovery for all, all eyes will be on a Finance Minister whose career has included tracing the surging income inequality that has resulted as the economy transforms through technological advances and globalization.
Just this afternoon, many of us received a message from Deputy Prime Minister Freeland advising that:
No matter what it takes, I know that our entire team won’t stop working to have your back. We will keep building a better, stronger and more resilient Canada. . . . [W]e are . . . preparing to meet the tests of the future.
A growing number of Canadians believe that guaranteed livable income needs to be part of that future, and P.E.I. is ready to pilot implementation.
Measures like a national childcare initiative are part of the solution as well, but they are not on their own an adequate response for women working two or three precarious minimum-wage jobs who are not paid enough to afford housing or food for their children. As basic income advocates remind us, the reality is that poor people need money. They need the reassurance of economic stability; the confidence to be able to forgo an inadequate wage to re-skill, return to school or launch a business; and the freedom to plan for a future. A future is something that many of us take for granted. A future should not be a luxury reserved for only the most privileged.
Bill C-27 represents business as usual. Like many Canadians, we look forward to this government delivering on its promise to build back better for all with a budget that provides recovery, has the backs of — and provides futures for — all. Meegwetch, 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.)
