Third Reading, Appropriation Bill No. 4, 2020-21
Honourable senators, Bill C-16 is the final instalment of the Main Estimates funding for government departments and agencies for this fiscal year.
The Main Estimates, which were tabled in March, sets out $125 billion in voted expenditures.
Departments and agencies have already received about nine twelfths of their Main Estimates funding in two previous supply bills. This is the final instalment of Main Estimates funding in the amount of $26 billion. The amount provided to each entity varies from $263,000 for the Northern Pipeline Agency to $5.4 billion for the Department of National Defence.
In addition to the remaining Main Estimates funding provided by Bill C-16, additional funding is also provided to some departments and agencies through Supplementary Estimates (B) as authorized by Bill C-17, which we just discussed a few moments ago. Supplementary Estimates (B) is requesting $21 billion.
Both bills, Bill C-16 and Bill C-17, are now before us this evening in this chamber.
This year, the Senate Finance Committee studied the Main Estimates and Supplementary Estimates (B) together, so the report tabled by Senator Mockler on Tuesday provides information on our study of both the Main Estimates and the Supplementary Estimates (B).
Our Finance Committee report is very detailed, and I thank Senator Mockler, Senator Forest and Senator Pate for their speeches yesterday. I will not repeat what is in the report but will focus on the challenges of reviewing the government’s spending plans.
In previous years, I have discussed the challenges and difficulties of linking new spending initiatives, such as budget initiatives, to the Main Estimates and the supplementary estimates documents. To address some of these issues, the government had initiated an estimates reform project in recent years but has now cancelled or discontinued the project. Pilot projects were implemented in two fiscal years, and there were some noticeable improvements for those two years. However, the problem of tracking new spending initiatives, including the COVID-19 initiatives, remains.
In addition, difficulties in obtaining information on individual departmental programs persist. For example, I have often spoken on the capital spending program of the Department of National Defence and how it is impossible to track their capital spending in the estimates and supplementary estimates to their spending plan in their Strong, Secure, Engaged defence policy.
This year, new challenges — or perhaps I should say problems — arose with tracking COVID-19 spending of the government. Honourable colleagues will recall that I previously indicated on numerous occasions that the government has failed to provide parliamentarians with the financial information they need to provide parliamentary oversight. Information that is provided is often dated, disjointed and provided in various locations, and information is often simply not provided. The problem has persisted to a greater degree since the COVID-19 programs have been implemented.
I have made numerous requests for information.
For example, on October 29, in this chamber, I asked Senator Gold why the government was refusing to provide current financial information to parliamentarians and Canadians in general. I specifically referenced the COVID-19 biweekly reports which the government ceased providing in early August.
On November 12, the Minister of Finance appeared before the National Finance Committee to discuss Bill C-9. At that time, I indicated to her that there was no requirement within that bill to publicly provide any financial or program information on the two programs, which were the subject of the bill, specifically, the wage subsidy program and the rent subsidy program.
I also told her that the biweekly COVID reports, which had provided some information on the COVID-19 programs, were discontinued on August 6 and that program and financial information were very much lacking. In fact, I told her that the lack of program and financial information is the biggest issue I have.
The President of the Treasury Board also appeared before the National Finance Committee on December 1 to discuss the Main Estimates and Supplementary Estimates (B). At that time, I asked him why he had not provided us with all the financial information we need as parliamentarians to do our jobs.
The estimates documents, which were the subject of those discussions, do not provide estimates of all government spending, and in order to track expenditures and match them up with the estimates or vice versa, we have to research The Fiscal Monitor, ministerial remarks, websites of Crown corporations, proceedings of committees of the House of Commons, reports of the Parliamentary Budget Officer and so on. Neither the Minister of Finance nor the Treasury Board President satisfactorily responded to my questions.
While Supplementary Estimates (B), and Supplementary Estimates (A) before them, include many COVID-19-related expenditures, it is not a complete accounting of these expenditures. I would like to summarize some of the problems encountered.
The Department of Employment and Social Development is requesting $28 billion for the Canada Emergency Response Benefit, or CERB, as we call it, in Supplementary Estimates (B). This is in addition to the $60 billion approved in Supplementary Estimates (A), for a total estimated cost of $88 billion.
However, CERB was transitioned to the EI program in September. The most recent Fiscal Monitor provided by the Department of Finance for September has now split the cost of the CERB program so that payments to individuals eligible for EI previously reported as CERB have now been reclassified as Employment Insurance benefits. While Supplementary Estimates (A) and (B) enable us to track the estimated cost of the CERB program, as well as program information such as the number of applicants, et cetera, this information is no longer being disclosed as of September 30.
Another example occurred last month when we passed Bill C-9, which authorized two COVID-19 programs: The Canada Emergency Wage Subsidy, and the Canada Emergency Rent Subsidy. The costs of these programs do not show up in the supplementary estimates because they are considered tax expenditures. High-level information on the wage subsidy program is disclosed in The Fiscal Monitor and on the Canada Revenue Agency website, but there is no information on the rent subsidy program in either The Fiscal Monitor or on the Canada Revenue Agency website.
A third example is the Canada Emergency Commercial Rent Assistance program, which was administered by the Canada Mortgage and Housing Corporation. It was announced in April and was initially estimated to cost $3 billion, but as of July, only $367 million of the $3 billion had been allocated. The last COVID-19 biweekly report in August indicated $644 million had been allocated to businesses, and then I saw nothing until I saw a press release on November 2, which stated that $2 billion had been paid to assist 138,000 businesses. However, there was no program or financial information available on an ongoing basis. This lack of information was raised with CMHC officials when they testified on Bill C-9. They indicated that they had met their reporting obligations by daily reporting to the Department of Finance and the Privy Council Office and weekly reporting to the provinces and territories. There is no consideration for giving information to parliamentarians.
Since the Canada Emergency Rent Subsidy program will now be administered by the Canada Revenue Agency, their officials assured us at committee that they would be providing information similar to the wage subsidy program. However, this information has yet to appear on their website.
Honourable senators, given the lack of information being provided by government, many parliamentarians are turning to the Parliamentary Budget Officer for information. Last month, the Parliamentary Budget Officer released a report on Supplementary Estimates (B). In that report, he concludes that:
. . . the amount of information that is publicly available to track this spending is lacking, thus making it more challenging for parliamentarians to perform their critical role in overseeing Government spending and holding it to account.
He further concludes that:
. . . there is currently no public document published by the Government which provides a complete list of all measures announced to date, or updated cost estimates. There is also no consistency to which organizations publicly report on the implementation of these measures.
In addition, the supplementary estimates that we studied at the Finance Committee do not include all the planned spending, since the document only provides details of organizations which make payments from the Consolidated Revenue Fund.
Some of the measures not included in Supplementary Estimates (B) are the Canada Emergency Wage Subsidy, the Business Credit Availability Program, the Canada Emergency Business Account, the enhanced benefits provided through the Employment Insurance Operating Account and the new benefits enacted in October 2020 through the Canada Recovery Benefits Act.
In his report on Supplementary Estimates (B), the Parliamentary Budget Officer makes an interesting observation. He discloses that:
While not all COVID spending is made public, federal departments and agencies are required to update the Government’s Central Financial Management and Reporting System with actual spending data on a monthly basis.
In other words, the information that I’m looking for as a parliamentarian is available. The government just isn’t providing it.
In addition to the direct COVID-19 spending reflected in Supplementary Estimates (A) and now Supplementary Estimates (B), the government has also provided liquidity support measures to targeted populations, many of which are delivered through Crown corporations.
These measures would include loans, guarantees and deferred tax payments and are generally repayable. However, they do impact the government’s exposure to risk because government is the sole shareholder of each of these corporations. Any gains or losses in these Crown corporation programs could affect the federal government’s bottom line. There are currently five Crown corporations providing liquidity support: The Bank of Canada, Farm Credit Canada, Export Development Canada, Business Development Bank of Canada and Canada Mortgage and Housing Corporation.
The Bank of Canada has put in place a number of COVID-19 programs for the federal government, the provinces, financial institutions and corporations, primarily to provide liquidity. However, the Bank of Canada is unique in that it publicly reports on a weekly basis the status of its liquidity supports. So the weekly growth in the Bank of Canada’s balance sheet as a result of their COVID-19 programs is easily accessible on their website, and officials are available to answer inquiries.
Information on the COVID-19 programs of the other four Crown corporations had been provided in the biweekly COVID-19 reports. However, as noted previously, the government ceased providing this information as of August 6. As a result, financial and program information on the COVID-19 programs of these Crown corporations is lacking.
In October, the Parliamentary Budget Officer released a report on Crown corporations’ COVID-19 liquidity support, indicating that the increases in liquidity supports by those four Crown corporations have provoked questions from several parliamentarians regarding the budgetary risks associated with these financial commitments.
In his report, the Parliamentary Budget Officer indicated that the liquidity supports for the Crown corporations — and I’m not referring to the Bank of Canada here but the other four Crown corporations — represent extraordinarily large expansions of their financial operations in the billions of dollars. He concluded that the public reporting on the probable or potential budgetary costs of these liquidity supports has been lacking.
He also said that the government, within its economic and fiscal snapshot in July — the current fiscal update came after this report — included estimates for the net profits or losses expected on these liquidity measures but they were combined with other activities, so there was only a net amount.
He went on to say that, upon request, Finance Canada provided him with the five-year profile for aggregate gains and losses for enterprise Crown corporations on a confidential basis. In other words, additional information is available but, again, it will not be provided to parliamentarians.
Honourable senators, last weekend, I read an article about a CBC investigation — and I have read several since then — on the billions of dollars that the federal government handed out during the first eight months of the pandemic and the lack of details surrounding the programs. The article indicated that CBC had compiled the figures from federal government websites, corporate financial reports, the Office of the Parliamentary Budget Officer, and through access-to-information requests. Yes, I can confirm that the CBC did not get all their information from the Government of Canada, because the government quite simply has refused to disclose it.
Kevin Page, our former Parliamentary Budget Officer and now head of the University of Ottawa’s Institute of Fiscal Studies and Democracy, says that the numbers disclosed in November’s fiscal update are estimated numbers and not the actual monies that are going out the door.
Honourable colleagues, I have been requesting program and financial information on the COVID-19 programs for several months. CBC’s investigation included a search of corporate reports filed by 2,000 corporations. I have made several conclusions based on those reports.
The CBC article also cited costs associated with PPE-related expenditures and cites costs per type of equipment. It is a sad state of affairs when parliamentarians have to resort to CBC to obtain information on COVID-19 spending.
CBC related an interesting exercise in their article with which I can relate. For example, in seeking information on the “one-time, tax-free payment for seniors,” CBC said they had to follow a maze of websites of the Office of the Parliamentary Budget Officer, spreadsheets and legislative costing notices that provided three different totals for the program, ranging from $2 billion to $2.5 billion. That is the sort of exercise I do when I’m trying to track expenditures.
That experience is consistent with my experiences when information has to be gleaned from the website of the Office of the Parliamentary Budget Officer, the departmental website, Crown corporation websites, ministerial briefing notes and other sources deemed reliable.
Even former Parliamentary Budget Officer Kevin Page, who worked within government for many years, says he can hardly make sense of the recent 223-page fall economic update. He said, “It’s impossible to read. I have done this for years and I can’t even follow the money.” He wonders if someone in government is actually trying to obscure the data. “I hope it’s not deliberate,” he said.
In closing, I refer my honourable colleagues to the Finance Committee report on Bill C-9, which was adopted last month, and our report on Main Estimates and Supplementary Estimates (B), adopted by the Senate yesterday.
The Finance Committee, in reporting on Bill C-9, recommended that the government reinstate the publication of the biweekly COVID-19 report and publish timely, monthly updates on all of its COVID-19 programs. The Finance Committee also recommended that the government identify indicators to assess the performance of its financial support programs, providing timely and meaningful data on actual results.
The Finance Committee report on Main Estimates and Supplementary Estimates (B), which was approved yesterday, further recommends that the federal government provide clear and consistent monthly reports on the costs and performance of all its COVID-19 programs.
Honourable senators, it is time for the federal government to implement the recommendations of the Standing Senate Committee on National Finance. Parliamentarians and Canadians should not have to seek this information from sources outside government.
In closing, I refer colleagues to the Finance Committee report on Bill C-9 and our report on Main Estimates, adopted by the Senate yesterday.
Honourable senators, the government should stop talking about transparency of spending and start being transparent about its spending. Thank you very much.