Second Reading, Appropriation Bill No. 4, 2022-23
Honourable senators, I rise to speak to the government’s fourth appropriation bill this year, following Bills C-16, C-24 and C-25.
This appropriation bill is requesting approval to spend another $20 billion. In addition to the $20 billion being requested, the government already has parliamentary approval to spend $200 billion, which was approved by the previous three appropriation bills. Approval of this bill will increase spending approved by appropriation bills to $220 billion.
There is also another $215 billion approved by legislation other than appropriation bills, such as the Canada Health Transfer via the Federal-Provincial Fiscal Arrangements Act and public debt charges, which are approved by the Financial Administration Act.
I have said in this chamber a number of times that parliamentarians should spend more time reviewing statutory spending. The $215 billion in statutory spending is comparable to the $220 billion requested in appropriation bills. We studied the $220 billion in the appropriation bills, yet there is no comparable study of the $215 billion in statutory spending.
Honourable senators, government spending plans change many times throughout the year, and that presents a challenge for parliamentarians when reviewing those plans. To give you an idea of the complications of following the government’s spending, consider the following. Prior to April 1, we approved the first appropriation bill. Next, we received the budget bill, which approves some of the spending in the budget, but not all. In June, we received the second and third appropriation bills based on Main Estimates and Supplementary Estimates (A). In November, we received the Fall Economic Statement and the bill to implement some of the spending in the Fall Economic Statement, Bill C-32, which is before us this week.
In December, we received another appropriation bill based on Supplementary Estimates (B). This is Bill C-36, which is also before us today. Then in March, we will receive another appropriation bill, based on Supplementary Estimates (C). Some budget items and some fiscal update items are included in Supplementary Estimates (C).
Interspersed with all these bills, there are other bills that will provide parliamentary approval to spend money on other programs. For example, Bill C-31 was recently enacted, giving the government approval to spend on a dental program for children and a rental housing program.
To further complicate the process, the government will request approval for part of a program in one bill, while the funding for the remainder of the program will be requested in other bills. This was the process used for the new $30 billion child care program, in which $2.6 billion of the $30 billion was approved by the Budget Implementation Act, 2021, while approvals for the remaining amounts are being requested in appropriation bills.
There are also numerous other transactions that fall outside the appropriation bills and are not studied during our review of the appropriation bills and estimates documents. As I mentioned earlier, statutory spending so far this year exceeds $200 billion, Employment Insurance benefits are $24 billion, and the Canada Child Benefit is another $24 billion. There are also a number of other significant transactions that affect government spending that are not included in our study of the estimates, the supplementary estimates or the appropriation bills.
Honourable colleagues, my purpose in explaining the approval process for government spending is to convey to you the difficulties in tracking government spending. The process used by the government to obtain parliamentary approval to spend money is, as former president of the Treasury Board Scott Brison said, “totally irrational” or, as the Parliamentary Budget Officer recently said in a podcast with The Hill Times, “an absolute mess.” To Mr. Brison’s credit, he did attempt to fix the process or at least streamline it, but after his departure, no further work was undertaken by the government to simplify the process.
This government was elected in 2015 on a platform that promised open and transparent government. Specifically, the government promised to “change Parliament’s financial processes so that government accounting is more consistent and clear.” The commitment went on to say, “We will ensure accounting consistency among the Estimates and the Public Accounts.” We are still waiting for the government to honour that commitment.
Honourable senators, it is time for the government to fix the problem with the estimates process or at least make a start. Actually, it is past time.
This appropriation bill is requesting additional funding of $20 billion for 89 departments and agencies. Seven organizations are requesting over $1 billion each, and the Canada Mortgage and Housing Corporation is requesting $695 million. There is also $7 billion in statutory spending, for which approval has already been provided by other legislation. Included in this $7 billion is $2 billion for a one-time top-up to the Canada Health Transfer, just under $2 billion for assistance to Ukraine, $1.8 billion for COVID-19 tests and $750 million for provinces and territories for transit and housing. We don’t study any of that spending.
One of the overarching commitments of this government is their commitment to openness, transparency and accountability. I have often spoken in this chamber as to the lack of openness and transparency and the delay by government in tabling accountability documents such as the public accounts, the Debt Management Reports and the Departmental Results Reports. In fact, my comments so far today explain the difficulties in following the government’s array of spending plans.
The C.D. Howe Institute, a well-respected think tank, regularly provides a report card on the usefulness of the budgets, estimates and financial statements of the federal, provincial and territorial governments. The most recent report, released in September, reviewed the financial statements for 2020-21 and the budgets and estimates for 2022-23 of the federal, provincial and territorial governments.
Alberta was at the top of the class with an A, with the Yukon close behind with an A-. In the B-rating categories were Saskatchewan, New Brunswick, Ontario and Quebec. In the C categories were P.E.I. and Nova Scotia. In the D category was the federal government, Newfoundland and Labrador, Manitoba, British Columbia and the Northwest Territories. This was an improvement for the federal government because last year, it scored an F rating.
I do not understand why the federal government, with all the resources at its disposal, rated an F score last year on financial accountability documents and only a D score this year. The government should be able to do better than this. Canadians and parliamentarians deserve better.
The Departmental Results Reports were released on December 6, much too late to be of any use during our review of Supplementary Estimates (B), this Appropriation Bill C-36 and Bill C-32. A brief review indicates that 84 organizations established 2,676 performance indicators or targets, of which 1,331 met their target — just under 50%.
While a complete review of the Departmental Results Reports has yet to be completed, I can offer an example of the challenges a detailed review will identify. The government launched an Early Learning and Child Care strategy in 2020 at an estimated cost of $30 billion over five years. Objectives — or performance targets — included a 50% reduction in average fees of child care by the end of this month, the creation of 250,000 child care spaces over five years as well as the creation of around 50,000 child care positions. The department did not establish performance targets to annually measure the number of additional child care spaces created or the number of child care positions. Rather, the department is measuring whether access to early learning and child care has increased, with a target of 40,000 and a target date of March 31, 2022.
However, the Departmental Results Report indicates results are not available for 2019-20, 2020-21 or 2021-22 — just no results available. As well, there are no performance targets or criteria to measure whether child care fees have been reduced by 50% by the end of this month. Without this performance information, the government does not know whether its $30-billion child care strategy is successful.
In his report on the Main Estimates in March, the Parliamentary Budget Officer provided an overview of the increase in Indigenous spending within the two Indigenous departments. Spending in the two departments has increased from $14 billion in 2018-19 to $57 billion so far this year.
A significant part of the funding in Indigenous Services Canada is for out-of-court settlements, with $20 billion related to the compensation for Indigenous children and families harmed by the underfunding of child and family services. The government and the Assembly of First Nations had reached an agreement in principle to disburse the funds, but the Canadian Human Rights Tribunal did not support the agreement in principle. Officials from Indigenous Services Canada had informed the Finance Committee that the federal government and the Assembly of First Nations would seek a judicial review of the Canadian Human Rights Tribunal’s decision rejecting the $20 billion settlement.
Honourable colleagues may recall that I had asked Senator Gold a question on this matter last month. At a recent Finance Committee meeting, department officials and Treasury Board officials assured the committee that the $20 billion is frozen and that “it remains in our appropriation. . . . It’s dedicated to compensation, and it cannot be spent on other priorities.”
Last week, the Assembly of First Nations passed a resolution urging Canada to place a minimum of $20 billion earmarked for compensation into an interest-bearing account and compensate all victims covered by both the tribunal’s rulings and the class action. Given the significant funding provided to both departments for various claims and settlements, it is important for our Finance Committee to continue its oversight of these significant expenditures.
Supplementary Estimates (B), which supports this Bill C-36, includes $2 billion in statutory spending for the Canada Health Transfer. This is in addition to the $45 billion disclosed in the Main Estimates. This $2 billion was provided to jurisdictions to reduce backlogs of surgeries and other procedures during the pandemic.
The Canada Health Transfer is the largest transfer to provinces and territories to help pay for health care. Our health care system is in crisis, and provinces and territories have asked the federal government for a $28 billion increase in health care funding, which they say will increase the federal contribution toward health care costs from the current 22% to 35%. There is no provision in any spending document for any additional funding for the Canada Health Transfer.
Honourable senators, our government is facing significant economic challenges, along with problems in delivering basic government services. Inflation has taken hold, and Canadians are struggling to cope with the increasing costs of food, fuel and other necessities.
On December 5, four Canadian universities published Canada’s Food Price Report 2023, which predicts food prices will continue to increase between 5% to 7% in 2023, with the costs of vegetables, dairy and meat increasing the most. Food bank usage is up across the country. Interest rates continue to rise even though the government had assured Canadians that interest rates would remain low. Given the increase in inflation, Canadians are now borrowing more to make ends meet.
Homeowners are facing increased mortgage payments. Some Canadians who purchased homes when housing prices peaked now have mortgages that exceed the value of their homes.
Increased interest rates and more borrowing are also increasing government’s debt servicing costs to the extent that government’s debt servicing program is now one of its most expensive programs. Along with these economic challenges, economists are warning of a recession as we head into 2023.
Canadians cannot access health care. More Canadians have no family doctor, and there are long lineups for services at clinics and emergency rooms. Surgeries and diagnostic services are postponed, and our health care providers are overwhelmed. Especially concerning is the impact that the lack of health care services is having on our children. Over-the-counter medications for children are in short supply.
The government is challenged to provide other public services. There are lineups at passport offices. Applications by veterans for financial assistance and services are backlogged, and of the 2.2 million immigration applications outstanding, approximately 1.2 million are backlogged.
Even access to information requests are backlogged while the objective of the Access to Information Act is, “. . . to enhance the accountability and transparency of federal institutions . . . .” Canada’s Information Commissioner recently told a standing committee in the other place that the government failed to meet its legislated timelines on more than 30% of the 400,000 access to information requests made in the last year.
Honourable senators, Canadians are waiting for their government to take a leadership role. How much longer must they wait?