Second Reading, Appropriation Bill No. 3, 2022-23
Honourable senators, I would like to begin by thanking Senator Gagné for her comments on Bill C-25. As the critic of the bill, I have a few other comments.
First of all, Bill C-25 is supported by Supplementary Estimates (A), and it is requesting $8.8 billion in voted expenditures, so that’s requesting parliamentary approval, and it is forecasting a net increase of $860 million in statutory expenditures. This will increase budgetary expenditures for this year to $199 billion and increase the forecast in statutory expenditures to $208 billion.
With respect to Supplementary Estimates (A), in my last speech, I was talking about tracking the budget initiatives, and we don’t see new budget initiatives in the Main Estimates because the Main Estimates are tabled before we get the budget. When we get Supplementary Estimates (A), we start looking for these new budget initiatives and usually Supplementary Estimates (A) includes a substantial number of new budget initiatives, but this year, Supplementary Estimates (A) only includes seven new budget initiatives, and that’s expected to cost $1 billion.
There are a total of 211 initiatives in Budget 2022, which are estimated to cost over $7 billion. So if you take the 7 that are in Supplementary Estimates (A) and the 22 which already have statutory approval, there are still 182 budget initiatives yet to be funded in future appropriation bills. We’ll be looking for them in Supplementary Estimates (B), Supplementary Estimates (C) and maybe even in the subsequent year.
This is just to give you an idea as to how difficult it is to keep track of the new budget initiatives, because the Main Estimates and the budget document are misaligned. They just don’t match up. We still have a lot of tracking to do for those 182 budget initiatives.
Last year, Supplementary Estimates (A) included about half of last year’s budget initiatives, and there were probably about 280 budget initiatives last year.
I don’t know why the government has included so few Budget 2022 initiatives in Supplementary Estimates (A), and the Parliamentary Budget Officer couldn’t provide any insight into that issue.
In addition, the $8.8 billion being requested in Supplementary Estimates (A) includes $1 billion for six initiatives from last year’s budget. You can see how there has to be a matching up between all of the estimates documents and the budget.
There are the 2021 initiatives. They have yet to be funded in future initiatives, but given the lack of information to determine which budget initiatives from last year remain unfunded, we can’t identify them. I did ask the Parliamentary Budget Officer if he could identify them, and he did say that they would go back and look, but I don’t expect them to be able to identify them.
I think part of the issue is with the $13 billion gap that I mentioned in my speech on the earlier bill.
Honourable senators may recall that I’ve mentioned many times the difficulty in tracking budget initiatives to determine if and when they are funded. The Parliamentary Budget Officer recently indicated that he’s now going to track the implementation of budget initiatives, and he’s going to present them in an online tracking table on his website.
That’s good news, and it’s going to greatly assist us as parliamentarians in our review of government spending, but he’s only providing us a stopgap solution to a problem that’s created because the government is tabling two spending documents. He’s just trying to give us some assistance in matching up the two spending documents.
The Supplementary Estimates (A) document provides details on the $8.8 billion being requested in Bill C-25. I went back and looked at how much time our committee spent studying the $8.8 billion, and my colleagues on the Finance Committee probably won’t be surprised to hear me say this, but we spent three and a half hours studying the $8.8 billion being requested. I just felt that it simply wasn’t enough time to properly review how the government intends to spend the $8.8 billion. What I find in committee when we have so many competing obligations with regard to the budget bill, the Main Estimates and Bill C-8 is that we are in a time crunch.
When you don’t have enough time to get answers to your questions, you feel that you haven’t done a good job of analyzing the information that is in the estimates document.
So we received testimony from Treasury Board officials, the Parliamentary Budget Officer and officials from five organizations requesting funding in Bill C-25.
The Department of Indigenous Services is requesting $2.2 billion for compensation and reforms to the First Nations Child and Family Services program and to Jordan’s Principle program. So this $2.2 billion increases total departmental funding for this year to $42 billion.
Both programs are ongoing, and testimony indicated that our committee should further review the funding for these two programs and how they are delivered and administered, because when we received testimony from the departmental officials, there were a number of questions that were unanswered and there was, especially on my part, some confusion with regard to how the two programs overlapped.
The Public Health Agency of Canada is requesting $1.5 billion. That would bring their total funding to date for this fiscal year to $10 billion. So the $1.5 billion being requested will be used to buy additional therapeutics for existing and emerging COVID-19 treatments.
Officials did tell us that most of the $1.5 billion was funding that was reprofiled, and I’ve been trying to find some information on the source of the reprofiled funds and haven’t quite come to a solution on that, so that’s another area that has to be earmarked for follow-up.
The Parliamentary Budget Officer indicated that the Public Health Agency of Canada is requesting funding for medical research and vaccine development. Funding for medical research and vaccine development has decreased significantly while funding for therapeutics, vaccines and personal protective equipment and rapid tests have increased, demonstrating the changing needs of the pandemic.
The Department of Public Safety is requesting $823 million, which will bring their total funding for this year to $1.7 billion. The $823 million is for the Disaster Financial Assistance Arrangements program, and will be used to provide money to provincial and territorial governments to help pay for the costs of responding to and recovering from natural disasters.
The $823 million is part of the $1.9 billion announced in last year’s budget, which raises the question as to why the funding is only being requested now. This is part of the age-old problem where we’re getting budget initiatives from one year ending up in a document of another.
The Department of National Defence is requesting half a billion dollars in military aid for Ukraine. Officials also provided us with an update of their defence policy and their defence investment plan, which is being updated and released this fall. In past meetings, the committee has had difficulty in obtaining current information on the department’s capital projects. The Parliamentary Budget Officer issued a report in March analyzing the status of the departmental capital spending plan for 2017 to 2037.
The department has planned to spend $164 billion on 348 capital projects over a 20-year period. The analysis shows slippage in the first four years of the plan to 2021, and we already identified that in earlier committee meetings. So this funding has now been pushed to future years, notably 2023 to 2028, thus presenting further challenges to the department to rapidly wrap up capital spending during those five years. Departmental officials indicated that their updated investment plan will be released publicly in the fall of the year.
The Canadian Air Transport Security Authority also testified before the committee. They are requesting $329 million in addition to its base funding of $567 million, which is included in the Main Estimates. CATSA, as we know it, has been criticized over the past number of months for increasing lineups at airports and delays in screening passengers. That’s been on the news quite prominently lately.
Their testimony focused on the reason for the delays in screening passengers. They indicated that 1,750 of their 7,400 screening officers were laid off during the pandemic, but only 1,250 returned to their jobs. They currently have 6,800 screening officers, and they are trying to recruit an additional 1,000 screening officers.
They said that the problem is not the adequacy of the funding. They said there would be sufficient funding if they received the additional $329 million, but the problem relates to the labour market and the staffing of screening officer positions by third‑party screening contractors.
In addition, staff must be adequately trained, as part of the problem can be attributed to new staff or even returning staff. Although officials told us otherwise, passengers who travel extensively have said that there are problems regarding the consistency of screening procedures from one airport to another, as well as problems regarding secondary screening.
The Department of Finance has indicated an increase in statutory authorities in the amount of $1.2 billion primarily attributable to interest on mature debt and other interest costs. This brings the total cost of interest so far this year to just over $24 billion compared to the $26.9 billion forecasted in Budget 2022. We anticipate additional increases in interest costs will be included in Supplementary Estimates (B) and (C) since interest rates are rising and that interest costs will probably exceed the $29.6 billion forecasted in Budget 2022.
As we know, the government has committed in Budget 2022 to rein in spending by $9 billion through two expenditure review exercises. The Parliamentary Budget Officer told us that, based on the information provided by government, operating and capital spending can only grow by 0.3% a year in order to achieve the $9 billion in savings. That restraint, he said, will be more severe than what was undertaken in the early 2000 and 2010s. In addition, there were several government priorities announced in the electoral platform last year which are not yet included in the budget, as well as other pressures to increase spending. He did not believe it was credible that there will be the level of spending restraint required to meet the $9 billion in savings.
Treasury Board officials also testified at committee. One of the frustrations in reviewing requests for funding is the lack of performance information from organizations which are requesting large sums of money. Many of these organizations do not meet a substantial number of the performance indicators, so we do not know what the funding has achieved. Despite the lack of accountability information, funding to these departments and agencies continues to increase. The Department of Indigenous Services, Infrastructure Canada and Environment Canada are three of these departments.
Treasury Board is responsible for the financial oversight of governments, specifically overseeing how the government spends money on programs and services and how it managed. It also oversees the financial management of government departments and agencies. In other words, it’s the manager of the public purse.
Treasury Board also has a policy on results which requires each department and agency within a minister’s portfolio to publish a departmental plan and departmental results report. Given that many departments receiving significant and increasing levels of funding do not meet many of their objectives and do not demonstrate what their funding is achieving, the question remains as to why Treasury Board does not require improved accountability information from those departments.
Because there is insufficient results information available for many departments and agencies, it’s not possible to determine what results are being achieved. Funding provided is often in the millions and billions of dollars.
Treasury Board should require departments and agencies to include relevant performance targets for all funding approved and insist that those departments and agencies meet a significant number of their performance indicators. Without this information, we do not know what the funding provided is actually achieving.
These conclude my comments, honourable senators, on Bill C-25. I again would like to thank my colleagues on the Finance Committee for their support, for their questions and for their enthusiasm, and also to send them off to the chair and to all the staff who support us during our committee meetings. Thank you.