Moved second reading of Bill C-75, An Act for granting to His Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2025.

She said: Honourable senators, thank you for this opportunity to speak as sponsor of Bill C-75, which seeks approval of the spending outlined in Supplementary Estimates (A), 2024-25. These estimates were tabled in the other place by the President of the Treasury Board on May 23 and in the Senate later that day.

As per customary practice, once tabled in the Senate, the Supplementary Estimates (A) were referred to the Committee on National Finance for examination and report.

I know that we all would like to thank the National Finance Committee for the work they have done on Supplementary Estimates (A) and Senator Carignan for his able chairmanship of that committee. I also want to thank Senator Marshall, who is the critic for Bill C-74, Bill C-75 and the budget implementation act this year. She has been working overtime and double time. She asks very good questions in committee, and I learn a lot. I am grateful to her.

As I discussed in my earlier remarks on Bill C-74, the supplementary estimates generally contain spending that was not ready to be included in the Main Estimates, such as most items announced in the budget, as well as spending adjustments and other items that were unforeseen when the Main Estimates were prepared.

Bill C-75 seeks approval of the first of three supplementary estimates packages. Supplementary Estimates (B) will be tabled in the fall, and Supplementary Estimates (C) in the winter.

If approved, Supplementary Estimates (A) would increase voted budgetary spending by $11.2 billion, or 5.8%, over the Main Estimates, for a total of $202.8 billion. This includes $1.6 billion related to items announced in the most recent budget.

As a reminder, the numbers in the estimates are ceilings. It is possible that these amounts may not be fully spent over the course of the year. The actual expenditures are published in quarterly financial reports, with the total expenditures listed in the public accounts tabled each fall.

Much of the new voted spending in Bill C-75 is requested by the Department of Crown-Indigenous Relations and Northern Affairs for settlements with Indigenous peoples. This includes $1.8 billion for agricultural benefits claims. These funds would support the negotiation and settlement of agricultural benefits claims related to Treaties 4, 5, 6 and 10.

Senators, in my community, this is known as “cows and plows.” These are unresolved issues from the time that treaties were signed over a hundred years ago. This government is working to fulfill the treaty promises, and that is what this is about. “Cows and plows” is very important in my community.

There is also $1.5 billion for Federal Indian Day Schools and Indian Residential Schools Day Scholars settlements. This will be used for compensation, as well as administrative costs and legal services relating to these two settlements.

There is $1 billion to replenish the Specific Claims Settlement Fund, based on anticipated payments for negotiated settlements and tribunal awards up to $150 million. Specific claims are grievances against the federal government regarding alleged failures to fulfill historic treaty obligations or mismanagement of Indigenous lands and assets.

Again, these are very important ongoing negotiations by the government, settling issues that are long outstanding.

The supplementary estimates also include $447.9 million to settle historical claims. The federal government is involved in active discussions related to several such claims. This funding would ensure that the Department of Crown-Indigenous Relations and Northern Affairs is in a position to quickly implement negotiated settlements should agreements be reached.

Finally, there is $393.1 million for land-related claims and litigation, and another $303.6 million for a settlement providing compensation for individuals placed in Federal Indian Boarding Homes.

The Supplementary Estimates (A) also include additional spending for Indigenous Services Canada. For example, there is $769.7 million for water and waste water treatment. This includes the construction of new water and waste water infrastructure on reserves, repairs and upgrades to existing systems, facility operations and maintenance, training of system operators, water monitoring and testing, and development of local governance capacity.

Indigenous Services Canada is also requesting $633.5 million to improve services that impact the availability of safe and adequate housing for children on-reserve. This is part of the ongoing reform of First Nations Child and Family Services.

Immigration, Refugees and Citizenship Canada is seeking funding for support and services for migrants. This includes $411.2 million for the Interim Federal Health Program, which provides limited, temporary health care coverage to specific groups of foreign nationals, including asylum claimants and refugees, who are not yet eligible for provincial or territorial health insurance.

There is also $314.5 million for the Interim Housing Assistance Program, through which the government provides funding to provincial and municipal governments to address housing pressures resulting from increased volumes of asylum claimants.

Transport Canada is requesting $604.9 million to provide purchase incentives of up to $5,000 for eligible zero-emission vehicles. This will help make zero-emission vehicles more affordable for Canadians as we work toward meeting Canada’s 2030 emissions reduction target and reaching net zero by 2050.

Veterans Affairs Canada is requesting $471.4 million for compensation and administrative costs relating to a settlement with veterans. This is part of the Manuge class action settlement about the underpayment of benefits to disabled veterans for a 20‑year period beginning in 2003.

Colleagues, as I said earlier, $1.6 billion of the voted amounts in these estimates relates to funding announced in Budget 2024. This includes a couple of items that I have already mentioned, namely, the ones about zero-emission vehicles and health care for asylum claimants.

Some of the other items from the budget included in these estimates are as follows: $141.2 million for temporary accommodation and support services for asylum claimants; $121.3 million for the Inuit Child First Initiative, which provides a range of services to Inuit children, from medical and therapeutic services to accessibility infrastructure such as wheelchair ramps, to tutoring and summer camp; and $100.5 million for the Inuvialuit Regional Corporation in the Yukon and Northwest Territories to support the implementation of child and family services laws.

Honourable senators, as I’ve outlined, the programs and services to be funded by the proposed expenditures in Supplementary Estimates (A) will make tangible positive impacts in the lives of people throughout Canada.

I invite you to join me in approving these proposed investments by adopting Bill C-75. Thank you.

Thank you, Senator LaBoucane-Benson, for your remarks.

Honourable senators, Bill C-75 is the third appropriation bill for this year and is supported by Supplementary Estimates (A). The government is requesting parliamentary authority to spend $11 billion and has indicated that it already has statutory approval to spend $1.4 billion in budgetary expenditures, as well as $1.2 billion for non-budgetary expenditures.

The $1.4 billion in statutory budgetary expenditures will increase the government’s deficit, while the $1.2 billion in statutory non-budgetary expenditures will be recorded as assets or investment.

Last year, Supplementary Estimates (A) outlined $454.8 billion in spending for 2023-24, compared to $490 billion in Budget 2023.

This year, Supplementary Estimates (A) outlines $461.8 billion in spending for 2024-25, compared to $534.6 billion in Budget 2024. I expect the $534.6 billion in expenditures for this year to increase with the release of the Fall Economic Statement, so it is premature to estimate the final expenditure for this year.

We are not quite three months into the fiscal year, and we expect to see many more funding requests in Supplementary Estimates (B) and Supplementary Estimates (C), as well as the fall economic statement.

Expenditures have been on an upward trajectory for the past several years, increasing from $272 billion in 2014-15 to $497 billion last year and to $534 billion estimated for this year. However, as I have just indicated, the $534 billion is a preliminary amount because there are still nine and a half months left in this fiscal year.

Debt servicing costs have also increased, from $24 billion in 2014-15 to $47 billion last year and again to $54 billion this year. Department of Finance officials estimate that debt servicing costs will continue to increase into the future, with $64 billion in debt servicing costs estimated for 2028-29.

Since there are not enough revenues to pay for all of the government’s expenditures the government borrows each year, which has increased the debt. Total borrowing has increased from $967 billion in 2016-17 to $1.7 trillion as of March 31, 2024, as indicated in the government’s borrowing authority report, which was released last month. Increased borrowing, along with an increase in interest rates, results in increasing debt servicing costs.

The Department of Crown-Indigenous Relations and Northern Affairs Canada is requesting half of the $11 billion in Bill C-75. Almost all of the money requested by the department will be used to support claims and settlements, with the major ones being as follows: $1.8 billion will be used to support the negotiation and settlement of agricultural benefits claims related to Treaties 4, 5, 6 and 10. These numbered treaties are part of a series of 11 treaties made between the Crown and First Nations from 1871 to 1921.

A total of $1.5 billion will be used for the compensation, administration costs and legal services relating to two settlements: the Federal Indian Day School settlement, known as the McLean settlement; and the Indian Residential Schools Scholars settlement, known as the Gottfriedson Band class settlement agreement.

The figure of $1 billion is for the replenishment of the Specific Claims Settlement Fund. This fund will pay for specific claims resulting from grievances against the federal government regarding alleged failures to fulfill historic treaty obligations or mismanagement of Indigenous lands and assets. Specific claims settlements and tribunal awards valued at up to $150 million are paid from the Specific Claims Settlement Fund, and the $1 billion requested in Bill C-75 is based on anticipated payments for negotiated settlements and tribunal awards.

Funding is also being requested for other claims and settlements, but the three I just mentioned are the ones requesting a billion dollars or more.

In reviewing funding requests for specific claims and settlement agreements, there are a number of challenges in tracking these expenditures. It is not transparent. Funding for specific claims or settlement agreements may be requested in several supply bills over a number of years. As a result, we have to identify these amounts in a number of documents over several years. Funding for specific claims or settlement agreements may be requested in one or more fiscal years in an appropriation bill, but the expenditure may be recorded in a different fiscal year.

Some claims or settlements are recorded in the Public Accounts — that is, the financial statements of the government — as a “provision for contingent liabilities.” Last year, this account was increased by $22.5 billion, to $76 billion, yet we do not know which claims or settlements these are. This makes it impossible to track the funding requests in the appropriation bills for claims and settlements to the financial statements of the government.

Funding requests for claims and settlements are significant and, as a result, are frequently discussed in our committee meetings. The Parliamentary Budget Officer, in discussing claims and settlements with the committee, told us that it is a bit concerning that the claims and settlements have increased so much. He said it raises the question as to how firmly in control the government is with respect to these claims. He went on to say that the specific claims comprehensive claims process is very complex. Claims and settlements represent significant amounts requested in many appropriation bills. In addition, some claims are recorded as contingent liabilities, while others are included as a liability in the “provision for contingent liabilities.” As a result, it is difficult to obtain a complete picture of these expenditures.

The Department of Finance is forecasting an additional $1.9 billion in statutory budgetary expenditures relating to public debt service costs. These expenditures are authorized by the Financial Administration Act and are therefore not included in this bill, since the department already has spending authority.

Of the $1.9 billion, $764 million is for interest on unmatured debt, and just over $1 billion is for other interest costs. As a result of these additional amounts, the Department of Finance is indicating that interest on unmatured debt so far this year is $42.7 billion, while other interest costs are $5.6 billion. The recent budget indicates that public debt charges this year are estimated at $54 billion, so I expect Supplementary Estimates (B) and (C) will provide updated amounts for debt service costs for this fiscal year.

During our meeting with the Parliamentary Budget Officer, senators raised the possibility of debt service charges being reduced this year as a result of the recent decision of the Bank of Canada. Mr. Giroux indicated his office had not recalculated the government’s debt service charges for this year.

At our meeting with officials from the Department of Finance, we were told that the impact of the recent decision of the Bank of Canada to reduce the interest rate by a quarter of a percentage point has yet to be determined and will likely be disclosed in the Fall Economic Statement.

To clarify the relationship between the numbers in Budget 2024 and the estimates to date in Supplementary Estimates (A), Treasury Board has provided a chart entitled “Comparison of Budget 2024 and Estimates” because the numbers do not match. I have commented on this item previously.

While some of the information in the chart is helpful, the chart itself is misleading. While Treasury Board has included the Main Estimates and the Supplementary Estimates (A) in their calculation to show how government expenditures will reach the $534 billion in the budget, they have not included the funding amounts that will be included in Supplementary Estimates (B) or (C). Treasury Board needs to review this financial information, as it is not accurate.

Supplementary Estimates (A) is the first estimates document to be released since the tabling of Budget 2024. There are no new budget initiatives in the Main Estimates because the Main Estimates were tabled prior to the tabling of the budget.

Last year, Supplementary Estimates (A) had included $7.2 billion for 17 budget initiatives out of a total of 170. This year, Supplementary Estimates (A) includes just $1.6 billion for only 11 budget initiatives out of 200 initiatives for this year. This raises the question about why government is so slow in implementing its budget initiatives. While the PBO could suggest possible reasons, the government has not yet indicated why the implementation of budget initiatives is slower than in previous years.

In Budget 2023, the government made a commitment to reduce spending on consulting, professional services and travel by $500 million in 2023-24 and by $1.65 billion in 2024-25. It is too early to tell if the $500 million was saved last year. We may be able to determine this when the Public Accounts are tabled, but it is possible that the reduction of $500 million will not be discernible to parliamentarians.

However, for the $1.65 billion to be reduced this year on consulting, professional services and travel, funding approved for professional and special services for last year at this point in time was just over $20 billion, while $19.8 billion will have been approved at this point in time once this bill is approved. This is a reduction of about half a million dollars but, as I said, it’s too early in the fiscal year to determine whether spending for professional and special services has been reduced, as we still have nine and a half months left in this fiscal year.

Honourable senators, I conclude my comments on Bill C-75 by cautioning that we are only partway through the fiscal year, and this bill and Bill C-74, which I spoke to earlier, reflect partial and not complete expenditures for this fiscal year. There will be more requests for funding.

In addition, our Finance Committee is continuing its study of Supplementary Estimates (A), which forms the basis for this bill. This concludes my comments.

I have lots of concerns. I’m very concerned about the debt. I know that Senator Loffreda talked about it earlier tonight when he spoke to Bill C-69, but the debt keeps increasing, and it’s increasing at a fairly rapid pace, so, of course, our debt servicing costs are going up.

I do look at the details of what’s in the budget document, and I have noticed — and I raised this with the Department of Finance officials yesterday — if you look at what they think they’re going to borrow in the next five years, and if you look at Budget 2023 and the numbers of what they’re going to borrow in each year, and then look at the same in Budget 2024, the numbers go up quite significantly. It makes me wonder whether government has control of the debt.

With regard to expenditures, I mentioned in one of my speeches that expenditures have gone up quite significantly. What I notice in the budget document is that for the expenditures that they’re projecting to run the public service, I think it may be $150 billion, but what they’re showing is it has been on such an upward trajectory. This year, it’s going to go up again, but then, all of a sudden, next year it’s going to go down by about $8 billion and then it’s going to flatline. I looked at the numbers and thought, “I don’t think so because the government is spending at an annualized rate of 8%, and now they’re going to stop dead centre.”

The other concern I have is that — I can go on all night with the concerns.

More, more.

The other concern I have is this: For the capital gains tax — I’m not getting into the merit of the capital gains tax — a lot hinges on collecting that $6.9 billion this year. If they don’t collect that, there’s going to be a big hole in the budget, and they’re also expecting more revenue from that in future years, so that money better materialize.

All the numbers just seem to be moving like that — everything increases. There is no decrease. They may say in the future that they’re going to do something, but, when the time comes, it doesn’t pan out. I don’t know if that’s a start. The next time you ask me that question, I can fill you in some more.

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 LaBoucane-Benson, bill placed on the Orders of the Day for third reading at the next sitting of the Senate.)