Second Reading - Bill C-26, Appropriation Bill No. 6, 2020-21
Thank you, Senator Smith, Senator Gagné and Senator Galvez for your comments on Bill C-26. My comments will be on a number of individual measures outlined in the Supplementary Estimates (C) document that supports Bill C-26.
My first comment relates to the write-off of student loans. Similar to previous years, Employment and Social Development Canada is requesting a write-off of student loans. The write-off requested this year is $188 million. However, unlike previous years, officials from the department were not invited to appear before our Finance Committee to discuss the write-off, but some questions were posed to officials of the Treasury Board Secretariat.
The student loan portfolio was $22 billion at the end of March last year. In addition to the write-offs of student loans each year, which is usually studied by the Senate Finance Committee, other amounts are written off or forgiven under the authority of legislation other than an appropriation bill.
For example, last year, $26 million was also written off under the authority of the Financial Administration Act. Another $371 million was forgiven under the authority of the Canada Student Financial Assistance Act, while another $2 million was forgiven under the authority of the Canada Student Loans Act.
Since our Finance Committee has historically only studied amounts written off under the authority of appropriation bills like Bill C-26, Employment and Social Development Canada has been requested to provide additional information on loans forgiven and loans written off to ensure the Finance Committee has a complete picture of the student loan portfolio.
As a matter of interest, both the Parliamentary Budget Officer and the Auditor General of Canada have issued reports on Canada student loans. The most recent report issued by the Auditor General of Canada was issued less than a year ago, in July 2020.
Supplementary Estimates (C) also indicates that $200 million in statutory funding has been provided to the Department of Finance for the purchase of shares of the Canada Enterprise Emergency Funding Corporation, a Crown corporation established in May 2020. Senator Galvez spoke about this corporation in her speech. It is a subsidiary of the Canada Development Investment Corporation, another Crown corporation.
The newly created Canada Enterprise Emergency Funding Corporation has been mandated to assist in the delivery of the COVID-19 Economic Response Plan, specifically to provide emergency funding support for large Canadian enterprises facing challenges during the pandemic.
As of February 26 of this year, four loans have been approved in the amount of $1 billion, and $274 million of the $1 billion has been drawn down.
Finance officials responded to a number of questions in writing, and their response appears on the website of the National Finance Committee.
Officials provided information on standardized terms and conditions of loans issued to borrowers, but indicated that detailed terms and covenants of the loan agreements are commercially confidential and therefore not publicly available. This was also an issue raised by Senator Galvez in her speech.
Given that significant activities of government, including COVID-19 initiatives, are carried out by Crown corporations, it is important for parliamentarians to provide oversight in this area.
The Supplementary Estimates (C) document is generally easy to read. However, the document does not include all government spending. For example, spending related to the Canada Emergency Wage Subsidy program, EI benefits and the Canada child benefit are not included.
Treasury Board has, in Supplementary Estimates (C), provided a reconciliation of the amounts in the supplementary estimates to the fall economic statement. However, the problem remains. As stated by the Parliamentary Budget Officer, supplementary budget estimates do not include all planned spending, and therefore do not provide a complete picture of how much the government will spend.
I have raised this issue a number of times regarding inadequate disclosure of spending information, and I will continue to raise it in the future in this chamber.
The Treasury Board Secretariat’s funding request indicates a transfer of funds from six organizations, totalling $7 million, for the Financial and Material Management solution project. Officials indicated that this project began in 2015, impacts 14 departments, has cost $91 million to date and estimates it will cost another $29 million to complete in the next fiscal year.
It is important to track these projects because they are multi-year projects that cut across a number of organizations. If we look at the funding in any individual year, it does not convey the magnitude of the project.
The Auditor General of Canada conducted an audit of the acquisition of complex information technology projects within government and issued a report last month. At the time of her audit, government had 21 large IT procurements under way, valued at over $6 billion. These projects span several departments and organizations over several years.
The Chief Information Officer of the Treasury Board Secretariat provides strategic direction and leadership in information technology and supports, guides and oversees digital projects and programs.
Costs relating to the problematic Phoenix pay system are still being incurred by government, so it is important to exercise oversight of these large, multi-year projects that affect a number of organizations.
The Regional Air Transportation Initiative is outlined in the government’s fall fiscal update. Bill C-26 is proposing $44 million for the department of industry and its regional development authorities for the Regional Air Transportation Initiative. In its fall economic statement, government indicated that it would commit $206 million over two years for this initiative.
Officials appeared before our Finance Committee on March 8 — 23 days before the fiscal year end of March 31. Officials were unable to provide us with details of this program. They indicated that the program has yet to be launched and the process for determining funding has not yet been confirmed.
This raises concerns that $44 million of a $206 million program, which has to be delivered within 23 days, has yet to be designed.
This issue has been raised in previous years, and will be further pursued by members of our Finance Committee in the future.
Honourable senators, this concludes my comments on Bill C-26. I extend my appreciation to officials for their support during our committee meetings. I also thank the members of our Finance Committee for their excellent questions during our meetings on Supplementary Estimates (C).