Second Reading, Appropriation Bill No. 3, 2019-2
Thank you, Your Honour. I have a prepared speech, but I want to pick up on some of the preliminary comments made specifically by Senators Mercer and Day. Sometimes I’m quite dismayed when people speak about the supply bill because they say, “It’s only the supply bill.” The supply bill provides money to the government so it can function. The supply bill usually provides almost 50 per cent of the funding. Without the supply bill, the government will shut down. It’s not just the supply bill, it’s a very important bill and we see several of these each year.
The Finance Committee does a lot of detailed work, especially around the time of estimates. The supply bill and the budget, there is a lot of extra hours put in. We do a lot of detailed work. Senator Joyal, I know this is your last day, so I want to tell senators about a comment you made on the Finance Committee several years ago. What you said was there is a lot of hard work and no glory. I thought that was a very good description of the Finance Committee.
The report that was tabled by Senator Mockler is very detailed. It goes through every individual item that is in the supplementary estimates and it gives an explanation. It is very detailed. I won’t get into every item because it would take more than the 45 minutes allocated to me. But I want to hit on a couple of areas that interest me. Every senator brings a different perspective to the questions when we get into the Finance Committee.
I want to speak briefly to the bill. It is requesting $4.9 billion, as Senator Mitchell indicated, and it’s additional funding for 39 organizations. If this funding is approved, government will have approval to spend a total of $308 billion in the current fiscal year. That’s a lot of money. We don’t see the $308 billion at one time, we see it in dribs and drabs. It’s up to $308 billion, and we’re going to get a request for more funding before the end of the fiscal year. It will be more than $308 billion.
Last year government had approval to spend $292 billion, so it has been a significant increase, up 5.5 per cent. We will see what the next supplementary estimates bring and the Finance Committee will keep an eye on that.
Bill C-2, along with the Main Estimates, provides government with $131 billion of the $308 billion that I mentioned earlier.
There is $177 billion approved by legislation other than a supply bill. There is a number of statutes that provide statutory funding for different kinds of programs. This $177 billion, we always refer to it as statutory funding because it’s approved by statutes other than a supply bill. The two amounts, the $131 billion in the supply bills and the $177 billion in statutory funding, provide government with total funding of $308 billion. Some of the senators stated that when I start speaking numbers, they just glaze over. I want to make sure you’re aware that it’s a significant amount of money.
The $177 billion in statutory funding is 57 per cent of the funding that government spends. It’s not included in the supply bill, and it is not reviewed by the Finance Committee.
I’ve spoken about this area previously, so again, I am recommending that this Finance Committee review statutory funding even if we are not required to approve it. Statutory funding is now well over 50 per cent of money spent by government and I feel that it is very important that we at least realize where the money is going.
When we met on Monday, we reviewed the funding requests from eight departments, and in addition, a representative of Electric Mobility Canada appeared before the committee to support the $165 million being requested by the Department of Transport for the iZEV Zero Emission Vehicles Program.
When we review the Main Estimates and the bill, supplementary estimates, there are several challenges we face when we start reviewing these requests for money. First, quite often the requests are for multi-year projects. When we look at something, it might look like a very small dollar amount. We have to look, not at the funding requested, but at the funding for those projects in the past years and talk about the future funding requests that are pending and will come in the future years. We have to look at the timelines. I will give an example: Treasury Board this year is requesting $5 million for a project called the financial and material management solution project. It appeared to be a minor item in their $527 million request. However, when we discussed it with them, we determined that the $5 million was for a project that is multi-year, impacts 18 government departments, and at this point in time it has already cost $139 million. I expect it will cost more in the future. That’s the sort of thing we have to keep an eye on in Finance Committee. The costs relating to those 18 departments are going to be reflected in those departments, so it’s a project we have to track.
The second area that we have to be conscious of is that funding being requested by an individual department may also impact the funding in other departments and agencies.
For example, Treasury Board has requested $44 million to compensate employees for damages related to the Phoenix pay system. However, we know that Phoenix impacted many government departments and agencies, and the costs to date exceed $2.6 billion. We were also told that the $44 million in these supplementary estimates for damages is only the beginning of payments for damages. That’s another area we have to look at from year to year.
When we spoke to the Treasury Board officials, we also discussed the status of the estimates reform project. The Finance Committee will know what it is, but the government was trying to do something with the estimates to bring them better in line with the budget. The past two years we had a pilot project underway, and the Main Estimates were tabled after the budget. As a result, the budget initiatives were included in the Main Estimates for those two years and it was a bit easier to follow. I found it easier. There were shortcomings, but I kind of liked what they were doing.
However, when we talked to the Treasury Board people, it appears that government may revert to the old way of tabling the Main Estimates before the budget, so I think they’re taking a step backwards. While the two-year pilot program had its shortcomings, I find it disappointing to learn that the government may actually revert to the old process rather than trying to improve the new process they’ve put in place for the past two years.
Of the $4.9 billion that is being requested by 39 government departments and agencies, Veterans Affairs is requesting the largest amount, $858 million, primarily to fund demand-driven programs and services for veterans. Treasury Board has the second-highest request, at $527 million, primarily to compensate departments, agencies and Crown corporations for the impact of collective bargaining agreements concluded between April 1 and October 18 of this year. The Department of National Defence, an area I am interested in, is requesting $177 million to support and upgrade the armoured combat support vehicle fleet for the Canadian Armed Forces. This one is part of a $2 billion contract. The department has committed to providing additional information to the committee on the payment schedule and delivery timelines. Again, there is $177 million in Bill C-2 and there’s still about $2 billion outstanding.
Departmental officials also discussed the underfunding of capital defence projects. Usually the capital defence projects have been underfunded by $2 billion a year for the past three years, so that department is now committed to providing some revised numbers.
The Department of Transport is requesting $165 million for their iZEV Zero-Emission Vehicles Program. Rebates of $2,500 and $5,000 are provided, with the dealer passing the rebate to the consumer and Transport Canada reimbursing the dealer. Senators were particularly interested in the details of the program, such as the number of vehicles receiving rebates and the impact the rebates have had on greenhouse gas emissions, which they were not able to tell us. That was a very interesting discussion we had with Transport Canada.
The departmental officials from Crown-Indigenous Relations and Northern Affairs, in reviewing their funding request for the committee, informed us that funding for the two new Indigenous services departments — if you remember a couple of years ago, there was one department split into two — has increased funding by $4 billion when compared to the funding provided to the original single department. It has gone from $14 billion to $18 billion. In addition, we were told that 8,300 federal employees were working at the two new departments, compared to the 4,600 employees who worked at the original single department.
Finally, the Department of Canadian Heritage is requesting $10 million to support local journalism. This is part of a $50 million program over five years announced in Budget 2018 — not the last budget but the budget before — and is in addition to the $595 million program announced in Budget 2019 to support Canadian journalism.
These are only a few of the items included in Bill C-2. The report just tabled by Senator Mockler provides a comprehensive list of items requiring funding. All departments appearing before the committee provided information relating to their funding requests and in some instances committed to providing additional information.
After we return in the new year, the Finance Committee will get some new work. We expect to receive Supplementary Estimates (B), which will be the final supplementary estimates for this year. They should come in February. Then the corresponding supply bill should come in March. We also expect to receive the Main Estimates for next year. We should get that in February as well.
In closing, I’d like to thank my colleagues for their questions during our Finance Committee meetings. As I said earlier, every senator brings a different perspective to our meetings. I would also like to thank our chair, Senator Mockler; our deputy chair, Senator Day, who at one time was also an excellent chair; as well as to our clerk and analysts. Thank you very much.