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Third Reading, Appropriation Bill No. 5, 2021-22

Honourable senators, I rise today to speak to Bill C-15, Appropriation Act No. 5 for this fiscal year. It is the final appropriation act for this year and is requesting parliamentary approval for $13 billion.

I would like to start by thanking my colleagues on the National Finance Committee and also the officials who support the committee.

This appropriation act is supported by Supplementary Estimates (C), which specifies the amounts and broad purposes for which the funds will be spent. Supplementary Estimates (C) was studied by the Standing Senate Committee on National Finance. As a member of the Standing Senate Committee on National Finance, I, along with the other members of the committee, have studied the Main Estimates and supplementary estimates for this fiscal year, which will end today.

My comments focus on the challenges and problems in reviewing the government’s spending plans. I must say that in all my years of reviewing federal supply bills, I have never been so disappointed in the lack of direction of the government in addressing the problems related to their financial and accountability documents.

There are four issues that I will raise in my comments today. Regrettably, none of my comments are positive.

My first comment is on the non-alignment of the budget with Supplementary Estimates (C) and with all the estimates documents. I have spoken on this problem many times.

Because the Main Estimates are tabled on or before March 1 and the budget is not tabled until the month of April, the two spending documents do not match. New budget initiatives that are announced in the April budget are not included in the Main Estimates, so we will spend the remainder of the year, and maybe into subsequent years, trying to track the implementation of new budget initiatives in Supplementary Estimates (A), (B) and (C).

Despite knowing that the estimates documents do not match the budget, there is no attempt by government to address the problem. Rather, the government provides a “reconciliation” in each supplementary estimates document that purports to “reconcile” its proposed spending as per each supplementary estimates document with its proposed spending as per the budget. While the reconciliation is better than nothing, it is confusing and leaves many unanswered questions.

To demonstrate the problem that this misalignment causes, Budget 2021 indicated that there would be $49 billion in new budget initiatives in this fiscal year. However, Supplementary Estimates (C), which supports Bill C-15, indicates that there are $36 billion in new budget initiatives, not $49 billion. The reader is left to wonder how the government accounts for this difference of $13 billion.

Were budget initiatives not undertaken? If they weren’t undertaken, why not? And what are the implications?

Tracking the implementation of new budget initiatives is important because it identifies which initiatives are delayed so that the committee can follow up to determine the reasons why.

For example, Budget 2021 provided $2 million over two years to Innovation, Science and Economic Development Canada to support the implementation of a publicly accessible corporate beneficial ownership registry, and $1 million was allocated to this fiscal year.

This initiative is instrumental in assisting lawmakers to catch those involved in money laundering and tax evasion. Canada has long been seen as having weak anti-corruption laundering laws and enforcement. It is not possible to track the implementation of this Budget 2021 initiative. I have looked everywhere for it and simply cannot find it.

I read with interest an article in last week’s Senate clippings noting that Budget 2022 will be released on April 7, while the Main Estimates have already been released. The article included comments from the Parliamentary Budget Officer that the trend to later budgets is undermining Parliament’s oversight of government spending. I agree with his comments, as it is not possible to track government spending.

My second issue relates to the Public Accounts of Canada. The financial statements of the Government of Canada are called the public accounts. Each year, the public accounts are prepared for the fiscal year that runs from April 1 to March 31 of the following year.

There are three volumes to the public accounts. Each volume contains hundreds of pages of financial information, some of which is provided in summary form and some of which is provided in detail. Legislation establishes a deadline for the release of the public accounts. Specifically, the Financial Administration Act requires that the public accounts be tabled by December 31.

The information in the public accounts is required by legislators and the public to stay informed about the financial activities and financial position of the government. The public accounts for the year that ended March 31, 2021, were released unusually late. They were not released until December 14, just three days before the House of Commons adjourned for the Christmas break, and therefore just three days before the legislated deadline.

We reviewed the date on which the public accounts were released for the past 27 years, going back as far as 1994, and the tabling of the public accounts on December 14 was the latest we could find. We use the public accounts to review government spending, and they should have been released months earlier so they could assist us in our review of government spending during the fall sitting of Parliament.

My third issue relates to the Debt Management Report. The Minister of Finance has a legislated obligation to table the annual Debt Management Report in each house of Parliament on money borrowed during each fiscal year and on the management of the public debt. Specifically, the Financial Administration Act requires that within 30 sitting days after the tabling of the public accounts, the Minister of Finance must table the Debt Management Report for the same fiscal year.

Since the government withheld the 2021 public accounts until mid-December, they were able to push back the deadline for the 2021 Debt Management Report to March 28, which was just a few days ago. The Debt Management Report was finally tabled last Friday, on March 25 — a mere one day before the legislated deadline and 359 days after the fiscal year to which it relates.

Honourable colleagues may recall that I asked Senator Gold in this chamber when government would release the Debt Management Report. This report was of particular interest because it was the first year of the pandemic, during which the government borrowed $345 billion.

Given that the government continues to run large deficits, requiring the borrowing of significant amounts of money, the Debt Management Report should have been provided earlier to assist us in our review and oversight of government spending.

My fourth issue relates to the Departmental Results Reports. The Departmental Results Reports are part of the estimates family of documents. These reports support the estimates, supplementary estimates and appropriation bills, including Bill C-15. The reports were designed to focus on what departments and agencies are doing to achieve results for Canadians, while continuing to provide transparency on how taxpayers’ dollars are spent. However, in reviewing these documents, there are two significant problems.

First, the Departmental Results Reports were not provided to us until last month. In other words, we waited 10 months for reports that focused on a year that ended 12 months ago. We reviewed the Main Estimates, Supplementary Estimates (A) and (B), the budget and the fall fiscal update without the benefit of these reports. In summary, we had to review almost all government spending this year without knowing what the government had previously achieved.

The second problem relates to the quality of the information in the reports. The reports released last month indicated that there are 2,722 performance indicators for 86 organizations. Of the 2,722 performance indicators, 1,242 indicators were achieved. This is less than 50%. There were 739 indicators not met, while 741 indicators were categorized as “not available” or “to be achieved.” If 741 of 2,722 indicators provided no information, and there were 739 indicators not met, how can these reports be considered accountability documents?

The delay in tabling the Departmental Results Reports and the poor quality of the data make scrutinizing spending more difficult when we review the government’s requests for billions of dollars. We need to know what results government programs have achieved in the past in order to assess their request for additional monies.

Honourable senators, my last comment relates to a study that was done by the C.D. Howe Institute. For senators who are not familiar with this organization, the C.D. Howe Institute is a reputable research institute. It is widely considered to be Canada’s most influential think tank. Last December, the C.D. Howe Institute released a report on the financial information presented to legislators and the public by Canada’s federal, provincial and territorial governments.

They concluded that massive increases in spending and borrowing in response to COVID-19 and the ambition for new social programs have coincided with some serious backsliding in the transparency and timeliness of financial information, notably at the federal level.

The three documents on which they focused were the budget, the estimates and the public accounts, all of which I have just discussed.

The researchers assigned letter grades that reflected how readily an interested but non-expert user could find and understand the information that the documents should contain. The years reviewed included the financial statements for 2019-20 and the budget and estimates for 2020-21.

Receiving an A grading were Nova Scotia, New Brunswick, Saskatchewan, Alberta, B.C. and Nunavut. Ontario received a B rating. Receiving a C rating were Newfoundland, P.E.I., the Yukon, Manitoba and Quebec.

The federal government earned an F grade. One of the reasons for the federal government’s F grade was the lack of a budget in 2020. The report indicated they were on track for a C grade in their report card for 2022. My question is: Why only a C? Why not an A or even a B?

The report also said that the federal government’s budget for last year was late — it was released in April — and that it buried key numbers under hundreds of pages of marginally informative and repetitive material — not a performance consistent with the importance of its fiscal policy nor the example the federal government should set.

Just to conclude, I will summarize my comments as follows: The government’s financial and accountability documents are provided much too late to be of any significant benefit. The lateness of the documents diminished their usefulness. I refer specifically to the Public Accounts of Canada, the Debt Management Report and the Departmental Results Reports.

In addition, the government’s budget and its estimates documents indicate different spending plans, and they should be aligned. Departmental Results Reports should provide the information on the results of their spending in their reports.

Honourable senators, for the government to leave this issue unresolved, it is a disservice to parliamentarians and the public. The issues I have raised should be addressed. Thank you.

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