Appropriation Bill No. 5, 2021-22
Third Reading
March 31, 2022
Honourable senators, I rise in my capacity as critic to speak to Bill C-15, An Act for granting to Her Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2022.
Bill C-15 puts into legislation $13.2 billion for the federal public administration as sought out through the Supplementary Estimates (C) 2021-22. This funding is requested by federal departments and agencies due, in part, to changes in budgetary needs not covered in any other supply bills.
I would first like to commend the work of our colleagues on the Standing Senate Committee on National Finance, who had the near-impossible task of reviewing the estimates documents, sifting through a 200-page document — line item after line item — and questioning departments and agencies concerning the additional authorities being requested. It is, indeed, nearly an impossible task, as the committee held just two meetings and heard from 26 witnesses as part of their revision process for the Supplementary Estimates (C) 2021-22.
Colleagues, while this sort of exercise seems to have become a common occurrence in this place over the last few years, it is nonetheless extremely concerning. We, as parliamentarians, are not being given enough time to provide effective oversight of government spending on behalf of Canadians. We are being asked, in a very narrow window of time, to approve over $13 billion in funding for federal departments, many of which continue to fail to meet their departmental planned targets. Other departments simply fail to report results with respect to various performance indicators.
All estimates documents include a section on the Departmental Plans, DPs, and the Departmental Results Reports, DRRs. The DPs lay out plans for the year for each department and agency, while the DRRs report on the performance of the plans. On paper, this is both useful for us parliamentarians in our oversight work but also for Canadians who are funding the administration of the federal public service.
The problem, however, is that Parliament does not set mandatory deadlines for the tabling of these plans and reports. That means parliamentarians could be asked to approve new funding before reviewing the DRRs, the results for the previous year. This is exactly the case for the fiscal year ending March 31, 2021. The DRRs for the 2020-21 fiscal year were submitted in February 2022, a full 10 months after March 31, 2021. This meant that all new government spending, beginning with the Main Estimates 2021-22, had to be considered without any information regarding the performance of each organization in the previous fiscal year.
To reiterate the importance of having the DRRs, here is the scenario before us right now: Later today, we will be asked to approve $75 billion in appropriations for the federal public administration as part of Bill C-16 for the 2022-23 fiscal year. However, we have absolutely no information on how departments performed in 2021-22 since the DRRs for the 2021-22 fiscal year are not yet submitted and likely will not be until well after the additional appropriations have been approved by Parliament.
If that doesn’t confuse you, what will?
In addition to this critical misalignment of priorities, federal departments are failing to meet their targets or are not reporting on them altogether. According to data published by the federal government, departments failed to meet 31% of the government’s performance indicators, while 16% did not report results for the most recent fiscal year.
The Department of National Defence and the Canadian Armed Forces, for example, failed to meet 46 targets, accounting for just over 37% of overall performance indicators, in the 2020-21 fiscal year. Moreover, the department did not provide results on 16 targets. Some of the performance indicators where the department failed to execute include the percentage of aerospace fleets that are serviceable to meet training and readiness requirements and the percentage of projects that meet the approved project development and approval timelines — low‑risk, low-complexity projects. Other performance indicators where the department failed to report results included joint force effectiveness in providing near real-time support to operations and senior decision makers.
While we are entering into an important era of global insecurity, one where countries are re-evaluating their defence policies and bolstering their military capabilities, it is imperative we have up-to-date, complete and relevant information from departments like National Defence so we, as parliamentarians, can effectively carry out our roles in reviewing spending decisions.
Honourable senators, furthermore, I would like to highlight an issue of poor planning within the federal administration, a recent trend we need to monitor more closely. As reported by the Parliamentary Budget Officer, spending lapses — that is, money approved by Parliament but is unspent and for which legal authority expires at the end of a fiscal year — reached record levels in 2021. The PBO suggests that spending lapses as a share of voted budgetary authorities were close to 7%, or roughly $13 billion, in 2020-21, increasing over time since 2017-18.
The bulk of the increased spending lapses over the last few years has been attributed to the extraordinary federal response to the COVID-19 pandemic. The argument is that Parliament was asked to approve unprecedented amounts of funding at record speeds to respond to a quickly changing environment. Even the government acknowledged at the start of the pandemic that the priority was to get money to households and businesses as quickly as possible.
Speaking of the Canada Emergency Wage Subsidy, former Minister of Finance Bill Morneau told senators in April 2020:
. . . we’re trying to get money to people as fast as we can and in the most practical ways we can. We think we have found the best way.
It is important to emphasize the difficult task the government faced at the start of the pandemic, which was having to ensure the health and safety of Canadians while providing financial supports for those impacted, and doing it in a manner that was quickest.
However, three years into the pandemic, when jurisdictions are cautiously beginning to loosen restrictions and reopen their economies on the advice of public health officials, we continue to see mismanagement of federal spending. To highlight this, Bill C-15 would grant Health Canada and the Public Health Agency of Canada $4 billion to procure rapid tests. Yet, this funding request has been duplicated in two other bills already before Parliament, Bill C-8 and Bill C-10.
The federal government has claimed the reason for this duplication is to ensure speedy procurement of rapid tests using the first authority available to them, whereby remaining requests would simply lapse. Colleagues, this is simply an unacceptable way of managing public finances. This type of exercise should not be allowed to become the norm. Federal departments should undertake serious diligence to ensure the best use of public resources the first time.
I share this sentiment of the Senate Finance Committee, which found this approach to be unclear and unacceptable. In my view, this illustrates poor planning on the part of the government and, once more, impedes our ability to carry out our directives as senators.
While spending lapses are expected in any budget, as authorities sought out by the departments are the estimations of their expenditure needs, the steady increase in spending lapses over the last several years could become problematic. We, as parliamentarians, should continue to monitor closely.
I welcome and echo the remarks of the Standing Senate Committee on National Finance in their review of the Supplementary Estimates (C), 2021-22, urging the government to end the practice of duplicating funding requests, as well as demanding clear explanations from the Treasury Board Secretariat in this regard.
Honourable senators, to conclude, I would urge the government to set mandatory dates for the tabling of departmental plans and departmental results reports. In doing so, this exercise would better align funding requests with past performance records. Moreover, the continued increases in spending lapses and frozen allotments suggest the government has made little progress in its spending plans and reporting guidelines. Therefore, I would urge the government to better prioritize funding requests to ensure effective and efficient uses of resources. Thank you so much.
Honourable senators, a substantial amount of the spending in Bill C-15 and the Supplementary Estimates (C) concerns Canada’s ongoing response to the COVID-19 pandemic. Yet again, we must reckon with the significantly worse health outcomes faced by low-income Canadians both prior to and during the pandemic.
Data from the Public Health Agency of Canada underscores that those with the least have been twice as likely as those most well off to die of COVID-19. The Public Health Agency links this horrific disparity to social and economic inequalities faced by people below the poverty line — from greater risk of underlying and disabling health conditions and lack of safe housing, to unsafe working conditions and not being able to afford to stay home from front-line gig work or minimum wage jobs.
In human, social and health terms, these unequal health outcomes are unconscionable. They also carry significant financial consequences. As the Parliamentary Budget Officer reminded the National Finance Committee during his testimony on the Supplementary Estimates (C), the financial burden includes:
. . . first, the costs on the individuals themselves by being prevented from working due to poorer health outcomes. . . . it reduces income and employment gains, and it also reduces attachment to the workforce. . . . individuals with poorer health outcomes tend to have weaker social networks, which can lead to further isolation . . . They often have to incur additional expenses: medication, drugs, supports, at-home supports and others.
There are also costs that have to be borne by society. . . . If people with poorer health outcomes have to withdraw from the labour force, that imposes costs on each and every one of us when jobs go unfilled.
There are also the costs of treating people. Those costs would be lower if they had better health outcomes in the first place. It is much more expensive to treat diseases and illnesses than it is to prevent them, generally speaking.
The most significant spending measure in Bill C-15 arises from the need to treat the results of health inequalities that we have neglectfully failed to prevent. Thirty per cent of the spending proposed by the bill — $4 billion — earmarked for procurement and distribution of additional COVID-19 rapid tests is linked specifically to trying to address COVID-19 risk among so-called vulnerable groups.
At the National Finance Committee, the Public Health Agency of Canada identified these populations as including groups such as Indigenous peoples, those of African descent, other racialized populations, those with disabilities, front-line service providers and essential workers. The committee had the opportunity to ask government officials whether these latest proposed measures are projected to close the gap in COVID-19 mortality for Canadians who have the least. Particularly, we asked how they would compare to income support measures that might have addressed underlying inequalities and allowed people to afford measures, from PPE to physical distancing, necessary to better protect themselves, their families and communities during the pandemic.
We also asked about the portion of pandemic spending, from the cost of PPE to vaccinations to mental health supports and so many other measures, related to the need to respond to emergency health situations created by social and economic inequalities that predated and were exacerbated by COVID-19.
In response, the Public Health Agency acknowledged its own previous research revealed “robust associations between income and health in Canada” and that “the direct economic burden of health inequities on health care costs is substantial.”
In 2016 alone, socio-economic inequalities cost at least $6.2 billion annually, or over 14% of total expenditures on acute care in-patient hospitalizations, prescription medication and physician consultations.
The Public Health Agency also indicated, however, that it had not conducted health policy modelling studies to determine the effects on pandemic spending and health outcomes if measures such as robust income supports had been in place to try and redress pre-existing inequalities for those most at risk of COVID.
We could find no department that has conducted such analyses. The failure of the government to provide this type of assessment results in a massive gap and wholly inadequate ability to plan, much less prepare for, future challenges. It thus significantly erodes confidence in the foundation upon which the Canadian health, social and economic policy decisions are being made. When policy is debated in Canada, whether here in Parliament, around kitchen tables, in the metaverse or on the streets, many are acutely aware of the consequences of the continued reaction to emergencies.
Too often, though, the real cost of failing to take proactive, preventative action is not in the balance when we weigh the challenges of decades of inaction. Instead, focus is zeroed in on the initial costs of bold measures to address poverty and inequality — from guaranteed livable basic income to housing strategies, disability benefits, universal mental health care, pharmacare, dental care, child care and education.
Too rarely do we consider the costs of failing to act, the costs we are repeatedly being asked to approve in order to patch some but not all of the wounds and not for everyone.
Poverty and related inequalities cost Canadian taxpayers tens of billions of dollars every year, particularly in emergency health care measures, the criminal legal system and responses like shelters or food banks that dangle the hope of survival while reminding people that they are constantly on the brink of crisis.
These are the hidden costs of policies characterized as pursuing fiscal prudence but which do not reach everyone in need or fail to provide enough support and further stretch social and health systems that already leave too many people behind. Much worse than financial cost, as we have seen during the pandemic, failure to redress these inequalities also costs lives.
I want to urge therefore that we recognize many of the measures in this bill as not only vital to COVID-19 responses but also the costs that Canadians continue to pay as a result of our country’s failure to shore up health and social safety nets, to redress social, health and economic inequality and, particularly, to work to support people in finding pathways out of poverty.
The costs of our inaction need to factor into how we analyze and evaluate government spending. They must also push us to consider how resources can be invested differently to bring about healthier, more just and equal communities for all of us. Meegwetch, thank you.
Honourable senators, I rise today to speak to Bill C-15, Appropriation Act No. 5 for this fiscal year. It is the final appropriation act for this year and is requesting parliamentary approval for $13 billion.
I would like to start by thanking my colleagues on the National Finance Committee and also the officials who support the committee.
This appropriation act is supported by Supplementary Estimates (C), which specifies the amounts and broad purposes for which the funds will be spent. Supplementary Estimates (C) was studied by the Standing Senate Committee on National Finance. As a member of the Standing Senate Committee on National Finance, I, along with the other members of the committee, have studied the Main Estimates and supplementary estimates for this fiscal year, which will end today.
My comments focus on the challenges and problems in reviewing the government’s spending plans. I must say that in all my years of reviewing federal supply bills, I have never been so disappointed in the lack of direction of the government in addressing the problems related to their financial and accountability documents.
There are four issues that I will raise in my comments today. Regrettably, none of my comments are positive.
My first comment is on the non-alignment of the budget with Supplementary Estimates (C) and with all the estimates documents. I have spoken on this problem many times.
Because the Main Estimates are tabled on or before March 1 and the budget is not tabled until the month of April, the two spending documents do not match. New budget initiatives that are announced in the April budget are not included in the Main Estimates, so we will spend the remainder of the year, and maybe into subsequent years, trying to track the implementation of new budget initiatives in Supplementary Estimates (A), (B) and (C).
Despite knowing that the estimates documents do not match the budget, there is no attempt by government to address the problem. Rather, the government provides a “reconciliation” in each supplementary estimates document that purports to “reconcile” its proposed spending as per each supplementary estimates document with its proposed spending as per the budget. While the reconciliation is better than nothing, it is confusing and leaves many unanswered questions.
To demonstrate the problem that this misalignment causes, Budget 2021 indicated that there would be $49 billion in new budget initiatives in this fiscal year. However, Supplementary Estimates (C), which supports Bill C-15, indicates that there are $36 billion in new budget initiatives, not $49 billion. The reader is left to wonder how the government accounts for this difference of $13 billion.
Were budget initiatives not undertaken? If they weren’t undertaken, why not? And what are the implications?
Tracking the implementation of new budget initiatives is important because it identifies which initiatives are delayed so that the committee can follow up to determine the reasons why.
For example, Budget 2021 provided $2 million over two years to Innovation, Science and Economic Development Canada to support the implementation of a publicly accessible corporate beneficial ownership registry, and $1 million was allocated to this fiscal year.
This initiative is instrumental in assisting lawmakers to catch those involved in money laundering and tax evasion. Canada has long been seen as having weak anti-corruption laundering laws and enforcement. It is not possible to track the implementation of this Budget 2021 initiative. I have looked everywhere for it and simply cannot find it.
I read with interest an article in last week’s Senate clippings noting that Budget 2022 will be released on April 7, while the Main Estimates have already been released. The article included comments from the Parliamentary Budget Officer that the trend to later budgets is undermining Parliament’s oversight of government spending. I agree with his comments, as it is not possible to track government spending.
My second issue relates to the Public Accounts of Canada. The financial statements of the Government of Canada are called the public accounts. Each year, the public accounts are prepared for the fiscal year that runs from April 1 to March 31 of the following year.
There are three volumes to the public accounts. Each volume contains hundreds of pages of financial information, some of which is provided in summary form and some of which is provided in detail. Legislation establishes a deadline for the release of the public accounts. Specifically, the Financial Administration Act requires that the public accounts be tabled by December 31.
The information in the public accounts is required by legislators and the public to stay informed about the financial activities and financial position of the government. The public accounts for the year that ended March 31, 2021, were released unusually late. They were not released until December 14, just three days before the House of Commons adjourned for the Christmas break, and therefore just three days before the legislated deadline.
We reviewed the date on which the public accounts were released for the past 27 years, going back as far as 1994, and the tabling of the public accounts on December 14 was the latest we could find. We use the public accounts to review government spending, and they should have been released months earlier so they could assist us in our review of government spending during the fall sitting of Parliament.
My third issue relates to the Debt Management Report. The Minister of Finance has a legislated obligation to table the annual Debt Management Report in each house of Parliament on money borrowed during each fiscal year and on the management of the public debt. Specifically, the Financial Administration Act requires that within 30 sitting days after the tabling of the public accounts, the Minister of Finance must table the Debt Management Report for the same fiscal year.
Since the government withheld the 2021 public accounts until mid-December, they were able to push back the deadline for the 2021 Debt Management Report to March 28, which was just a few days ago. The Debt Management Report was finally tabled last Friday, on March 25 — a mere one day before the legislated deadline and 359 days after the fiscal year to which it relates.
Honourable colleagues may recall that I asked Senator Gold in this chamber when government would release the Debt Management Report. This report was of particular interest because it was the first year of the pandemic, during which the government borrowed $345 billion.
Given that the government continues to run large deficits, requiring the borrowing of significant amounts of money, the Debt Management Report should have been provided earlier to assist us in our review and oversight of government spending.
My fourth issue relates to the Departmental Results Reports. The Departmental Results Reports are part of the estimates family of documents. These reports support the estimates, supplementary estimates and appropriation bills, including Bill C-15. The reports were designed to focus on what departments and agencies are doing to achieve results for Canadians, while continuing to provide transparency on how taxpayers’ dollars are spent. However, in reviewing these documents, there are two significant problems.
First, the Departmental Results Reports were not provided to us until last month. In other words, we waited 10 months for reports that focused on a year that ended 12 months ago. We reviewed the Main Estimates, Supplementary Estimates (A) and (B), the budget and the fall fiscal update without the benefit of these reports. In summary, we had to review almost all government spending this year without knowing what the government had previously achieved.
The second problem relates to the quality of the information in the reports. The reports released last month indicated that there are 2,722 performance indicators for 86 organizations. Of the 2,722 performance indicators, 1,242 indicators were achieved. This is less than 50%. There were 739 indicators not met, while 741 indicators were categorized as “not available” or “to be achieved.” If 741 of 2,722 indicators provided no information, and there were 739 indicators not met, how can these reports be considered accountability documents?
The delay in tabling the Departmental Results Reports and the poor quality of the data make scrutinizing spending more difficult when we review the government’s requests for billions of dollars. We need to know what results government programs have achieved in the past in order to assess their request for additional monies.
Honourable senators, my last comment relates to a study that was done by the C.D. Howe Institute. For senators who are not familiar with this organization, the C.D. Howe Institute is a reputable research institute. It is widely considered to be Canada’s most influential think tank. Last December, the C.D. Howe Institute released a report on the financial information presented to legislators and the public by Canada’s federal, provincial and territorial governments.
They concluded that massive increases in spending and borrowing in response to COVID-19 and the ambition for new social programs have coincided with some serious backsliding in the transparency and timeliness of financial information, notably at the federal level.
The three documents on which they focused were the budget, the estimates and the public accounts, all of which I have just discussed.
The researchers assigned letter grades that reflected how readily an interested but non-expert user could find and understand the information that the documents should contain. The years reviewed included the financial statements for 2019-20 and the budget and estimates for 2020-21.
Receiving an A grading were Nova Scotia, New Brunswick, Saskatchewan, Alberta, B.C. and Nunavut. Ontario received a B rating. Receiving a C rating were Newfoundland, P.E.I., the Yukon, Manitoba and Quebec.
The federal government earned an F grade. One of the reasons for the federal government’s F grade was the lack of a budget in 2020. The report indicated they were on track for a C grade in their report card for 2022. My question is: Why only a C? Why not an A or even a B?
The report also said that the federal government’s budget for last year was late — it was released in April — and that it buried key numbers under hundreds of pages of marginally informative and repetitive material — not a performance consistent with the importance of its fiscal policy nor the example the federal government should set.
Just to conclude, I will summarize my comments as follows: The government’s financial and accountability documents are provided much too late to be of any significant benefit. The lateness of the documents diminished their usefulness. I refer specifically to the Public Accounts of Canada, the Debt Management Report and the Departmental Results Reports.
In addition, the government’s budget and its estimates documents indicate different spending plans, and they should be aligned. Departmental Results Reports should provide the information on the results of their spending in their reports.
Honourable senators, for the government to leave this issue unresolved, it is a disservice to parliamentarians and the public. The issues I have raised should be addressed. Thank you.
Thank you for your speech, and I share your concerns on many fronts. I am particularly in agreement with you that the National Finance Committee is too often asked to review billions of dollars of government spending in so little time. Tracking money is not always an easy task, and for Supplementary Estimates (C) we were limited to two meetings. We only heard from 5 of the 70 departments seeking funding. This is unfair for committee members, and although we do commendable work — we do great work, and, like me, I know you take this work very seriously — it seems as if it’s always a race against the clock for us to conduct our reviews.
In all of your years of experience, what would you propose to do to fix this issue? Do you have a solution that could allow us more time to review the estimates? Is it more meetings? Is the parliamentary financial cycle too restrictive and uncompromising? I know Senator Smith proposed mandatory dates. I would like to know your opinion.
I think the government should look at earlier tabling of some of the documents, like the Main Estimates and the supplementary estimates. I think they should also look at the possibility of doing pre-study on some of the bills that are over in the House of Commons. For example, Bill C-8 is over there now. I expect the National Finance Committee will get it. It’s a very complicated piece of legislation, but its arrival, I expect, will coincide with our study of Main Estimates, and possibly Supplementary Estimates (A). I would like to see more time given to the pre-study.
I’d also like to see more frequent meetings. I find that the pandemic has had a terrible effect on the National Finance Committee. One meeting a week is not sufficient. We should go back to our two time slots, and we should also have the ability to have those extra meetings when the Senate sits.
Are honourable senators ready for the question?
It was moved by the Honourable Senator Gagné, seconded by the Honourable Senator Gold, that the bill be read a third time. If you are opposed to the motion, please say “no.”
I hear a “no.” Those in favour of the motion who are in the Senate Chamber will please say “yea.”
Those opposed to the motion who are in the Senate Chamber will please say “nay.”
In my opinion, the “yeas” have it.
I see two senators rising.
Do we have an agreement on a bell between the government liaison and the Opposition Whip?
If any senator in the chamber is opposed, please say “no.” The vote will take place now.
