Honourable senators, I also rise to speak to Bill C-102, An Act for granting to Her Majesty certain sums of money for the federal public administration for the year ending March 31, 2020.
Bill C-102 is Parliament’s request for funds, as outlined in the 2019-20 Main Estimates. The 2019-20 Main Estimates present financial requirements of $302 billion for its 121 departments and agencies. Parliament is responsible for voting on $126 billion of this money, as indicated in Bill C-102. The remaining $176 billion has already been approved by other legislation.
Senator Mockler spoke at length earlier this week on many of the items that are included in the Main Estimates and in the supply bill. Senator Bellemare has also spoken. There is not much left for me to say. You will hear some things you’ve heard before.
The first item I want to talk about is the estimates reform project, which Senator Bellemare just spoke about. I think I have attended all the meetings during which that project was discussed. It is a very interesting project. A lot of work has been done on this project over the past four years, and a lot of preparatory work was done before that time.
I want to give you an idea as to how the Main Estimates operated three years ago and the progress that has been made in the subsequent three years.
Prior to last year, the Main Estimates were tabled before the budget was released. That was the 2018-19 Main Estimates. As a result, the Main Estimates did not include any new budget initiatives. Rather, new budget initiatives were included in supplementary supply bills for that year or, in some cases, didn’t show up until supply bills of future years.
Last year, the 2018-19 Main Estimates were tabled after Budget 2018 was released, so the funding for all new Budget 2018 initiatives were included in one budget implementation vote, which was called “Vote 40.” Vote 40 resided in Treasury Board, was centrally managed by Treasury Board and included $7 billion in new budget initiatives.
As the details of each new budget initiative were developed, and subsequently approved by Treasury Board, the corresponding funding was transferred to the respective department or agency so they could spend it.
That process last year was criticized by parliamentarians, the Parliamentary Budget Officer and the media for minimizing parliamentary oversight. People familiar with the process and what was happening were a little concerned — I know I was — that vote 40 was going to be a permanent fixture.
In essence, parliamentarians were asked to approve funding for all of the Budget 2018 initiatives before the departments and agencies had developed the details of the new programs; therefore, before the $7 billion had been scrutinized through the Treasury Board submission process.
At the end of last year, we were interested to see what happened to the $7 billion, because over the year it was being transferred out to government departments and agencies. There was a list of all the budgeting initiatives on the Treasury Board website.
As they were being transferred out, you could see it started out slowly at the beginning, and we were getting concerned. Even up to December it looked like a lot of the money had not been transferred out. But by the end of last year almost $5 billion of the $7 billion had been transferred out to the respective departments for program implementation. For a number of reasons, $2 billion was withheld by the Treasury Board, and $72 million remained unallocated. It seemed like they had control over the money.
This year, the new budget initiatives of $10 billion are allocated to respective departments or agencies. Each new initiative has its own separate vote. This has made it somewhat easier to track the new budget initiatives.
I don’t know how easy it will be as we get through the year. At least for the start of the year, when you go through the estimates document, you can see what the new budget initiatives are for each government department and agency.
The issue is that parliamentarians are still being asked to approve funding for new budget initiatives without sufficiently detailed information and before they have been scrutinized through the standard Treasury Board submission process.
An example of this is the new First-Time Home Buyers Incentive. That was reviewed by the Social Affairs Committee. We also looked at it a couple of months ago in the Finance Committee as part of the estimates process. At the time it was studied, the rules had not been released. Within the last couple of days those rules have now been released. That will have to be on our to-do list.
To give you an example of the problems associated with the approval of funding before a budget initiative is fully developed, the Parliamentary Budget Officer tracked the Budget 2016 initiatives through their subsequent estimates and found that 30 per cent had variations, both higher and lower, compared to the amount that was initially indicated in Budget 2016. This demonstrates the value of Treasury Board’s approval of developed budget initiatives and the problem when parliamentarians are required to approve these initiatives before they are reviewed and approved by the Treasury Board.
I was very interested in the reforming of the estimates process. Minister Joyce Murray, President of the Treasury Board, met with us on May 8 and provided an update on the estimates project.
First of all, for the Budget 2019 initiatives, she assured us that unspent funding on those budget initiatives will lapse. There was some concern that if the funding wasn’t spent it would be transferred to some other program and used for another purpose. She assured us that it will not be transferred to another program.
She also said that this is year two of the two-year pilot project to align the estimates with the budget. She said future initiatives will rest with the new Parliament. I was a little disappointed because I had hoped she would leave some sort of template so we could see what progress is contemplated into the future.
We were also told that the new Budget 2019 initiatives are not included in the 2019-20 departmental plans. In committee, we have to bear this in mind when we’re reviewing the departmental plans.
Honourable senators, I am not going to go through everything that is in the supply bill or in the estimates, but I want to talk about some of the things that we do in the Finance Committee.
One of the biggest challenges in studying the estimates is following the money from year to year and from department to department or among departments. When you look at an initiative, it could cover five or six departments and 10 years. You are trying to trace the money as it goes from agency or department and you’re going from year to year. Many of the projects span several years. The Phoenix pay system is a good example of this.
When we studied the Phoenix pay system, we had to look back to when it was started, what was spent in past years, how much is being requested this year and how much government expects to spend over the next five years. It is not just a matter of picking up the estimates book, looking at a certain dollar amount and saying, “What is that money for?” It’s broader than that. We have to see how the project has progressed.
The most straightforward item in the estimates is the rebate offered on the electric vehicles that Senator Boehm and I are planning to buy.
One of the more complex programs we studied was the funding for asylum seekers and refugees. This program spans eight government departments and agencies. This is a new budget initiative that is outlined in the Budget 2019 document. As you go through the budget document, you can see eight government departments and agencies involved. I want to talk about a couple of those departments to give you an idea of how complex the estimates can be.
First of all, the Department of Immigration and Citizenship is requesting $3 billion, of which $338 million is for new budget initiatives. Officials from the department informed us that the elevated number of asylum seekers, including those that have crossed into Canada irregularly, has challenged the asylum system. To address these challenges, the government plans to implement a comprehensive border enforcement strategy. I’m sure we’ll learn more about that in future Finance Committee meetings.
To support the strategy and to process 50,000 asylum claims each year, the government plans to invest $1.2 billion over the next five years across eight government departments and agencies. Of this amount, $452 million will be allocated to the Department of Immigration and Citizenship, with $160 million allocated this year. We’re looking at all the departments and we’re looking at a number of years.
Increased funding of $324 million is also being requested to assist provinces and municipalities in providing temporary housing to asylum seekers. You may recall that last year $150 million was provided to provinces and municipalities. Again, this spans more than one fiscal year.
The Immigration and Refugee Board of Canada is requesting $205 million. Even though they didn’t directly say it when they appeared before the committee, they are quite challenged in keeping up with the work they have to do.
Included in the $205 million for the Immigration and Refugee Board is $32 million from Budget 2018, which will be used to manage irregular migrants.
Also included in the $205 million is $57 million, which will be used to enhance the integrity of Canada’s borders and asylum system. This funding will be used to support the processing of 50,000 asylum claims annually as well as enable the board to participate in the implementation of the new comprehensive border enforcement strategy.
In summary, funding increases for the Immigration and Refugee Board will be used to increase capacity and speed up the process of refugee claims and appeals.
Over the past year, we have seen a number of studies into this topic. The Auditor General released an audit in his spring report. The Parliamentary Budget Officer released a report last year. The department itself did some work on the Immigration and Refugee Board. I think it was a former public servant, Mr. Neil Yeates, and there were many recommendations. There has been a lot of work done on that, because the departments and the board and all the departments involved in the refugee program are being challenged.
Officials informed us that in 2018 the Immigration and Refugee Board experienced the largest influx of refugee claim referrals since its inception in 1989. A total of 56,000 claims were received. At the end of 2018, there were almost 72 claims outstanding. In addition, wait times for refugee claims have also increased significantly over the past two years.
Officials also told us that there were 74,000 claims outstanding at the end of March 2019. If the additional funding had not been provided in Budget 2018, there would have been 83,000 claims outstanding.
The Canada Border Services Agency is also one of the organizations that is involved in this $1.2 billion initiative. In total, they are requesting $1.9 billion for the agency, of which $262 million is for new budget initiatives, and $135 million of the new funding is for sustainability and modernization of Canada’s border operations.
One hundred and six million dollars will be used to enhance the integrity of Canada’s borders and asylum systems. It’s worth noting that this $106 million is part of the $1.2 billion program spread over the eight different federal departments and agencies that I mentioned earlier, whose objective is to enhance the integrity of Canada’s borders and asylum systems. The agency will use this funding to implement the border enforcement strategy, the processing of the 50,000 asylum claims and the removal of failed asylum claims. Funding is also being requested to address the increased demand for visitor visas, work and study permits.
Funding of $1.5 million is also being requested to protect people from unscrupulous immigration consultants. This is in addition to the $11 million being requested by Immigration, Refugees and Citizenship Canada for the same program. I’m trying to remember which committee studied that. It might have been Social, but I don’t think it was.
The strategy around immigration consultants will have three components. As part the budget implementation act, the statutory framework will be enacted to regulate immigration consultants. New funding will increase criminal investigations, and there will be public education and outreach. Over five years this program is expected to cost $55 million.
Looking at those eight departments and agencies was the biggest area. We didn’t look at all of them, but they all have a hand in that program. Just to figure out who is doing what and with what money has been a challenge.
I want to talk about the Department of Indigenous Services, because they appear before Finance quite regularly. They are requesting $12 billion. That’s a significant increase when compared to $10 billion last year. They had expenditures of $4 billion in 2017-18. There has been a significant increase.
Of the $12 billion, $2 billion will be allocated to operating expenditures. Just over $9 billion will be in the form of grants and contributions, and $600 million will be for new budget initiatives.
Underlying this year’s increased requests for funding are two major pieces of legislation which significantly affect the department and its programs. We have spoken about these before.
Bill C-92, An Act respecting First Nations, Inuit and Métis children, youth and families, seeks to recognize and affirm Indigenous jurisdiction over child and family services.
The second piece of legislation is the department of Indigenous services act, which is included in Bill C-97, the budget implementation act. This act defines the duties and responsibilities of the Minister of Indigenous Services and was studied by the Standing Senate Committee on Aboriginal Peoples. The Standing Senate Committee on National Finance will use the bill, when enacted, as a guide when reviewing funding requests from the department.
As previously indicated, $9.5 billion is being requested by the department for grants and contributions, of which $1.7 billion is for grants and $7.8 billion is for contributions. The largest grant is $1.5 billion, and it is to support the new fiscal relationship for First Nations under the Indian Act. Officials told us that this new grant is based on co-developed criteria and will advance self-determination by enhancing predictability and flexibility of funding under this program. Department officials assured us that performance indicators, using quantitative criteria, will be used to report on this and other departmental programs.
Several senators on the committee were interested in the status of the long-term water advisory program. Sixty-six million dollars is being requested this year to eliminate boil water advisories on reserves. Officials told us that there are 50 boil water advisories in effect and that the department is on track to eliminate these by March of 2021. Officials also told us 6,842 housing units and lots are being built, renovated or serviced, of which 3,883 are now complete.
One of the interesting hearings that we had was something new and that is the Leaders’ Debates Commission. That was an interesting area. The Leaders’ Debates Commission was created last October by an order-in-council with the mandate to organize two leaders’ debates for the 2019 federal general election. The order-in-council also established the criteria that the leader of each political party must meet to participate in the leaders’ debates.
The commission is requesting just over $4 million to organize the two leaders’ debates, one in each official language. The commission is comprised of a commissioner supported by seven-member advisory board. The commission’s mandate includes the preparation of a report to Parliament following the 2019 debates outlying funding, lessons learned and recommendations to inform the potential creation of a more permanent Leaders’ Debates Commission.
The last department I want to talk about is the Department of National Defence. I’ve spoken previously on that department, especially its new defence policy that was released in June of 2017 and the difficulty in obtaining information on estimated and actual costs of the capital projects.
The National Finance Committee has undertaken a study on military procurement. We have just finished reviewing our interim report. That also gets into this area of estimated and actual costs. Without this information, it’s not possible for parliamentarians to track the progress of military capital projects.
For example, the department’s defence policy indicates that just over $6 billion would be spent in 2017-18 on capital projects, yet actual costs were only about $4 billion. That’s about a $2 billion shortfall. The following year, it indicated that just over $6 billion would be spent. We now know that just over $4 billion was spent. Again, there was a shortfall of about $2 billion.
For this year, when we were reviewing the Main Estimates and when we were looking at this bill, defence policy indicates that just about $6 billion will be spent on capital projects, yet the Main Estimates is only requesting $3.8 billion. That’s, again, indicating a shortfall in excess of $2 billion.
This year we explored more about exactly what is in the capital projects. The department indicated that they have 333 capital projects in the new defence policy. Of the 333 projects, the department’s website identifies 17 major projects, and they are identified as 17 transformational and major Crown projects, including the Arctic and offshore patrol ships, the Canadian Surface Combatants, the Future fighter capability project, and the Medium Support Vehicle System.
Departmental officials indicated that of the $3.8 billion requested in the 2019-20 Main Estimates and also now included in this bill, three projects have the highest estimates. They said that $300 million is being requested this year for the Arctic and offshore patrol ships, and this would be ice-capable offshore patrol ships that are being constructed by Irving Shipbuilding Inc. The department’s website indicates that this project will cost in excess of $1 billion. There is a lot of interest in tracking exactly from the time that the project commences right until it finishes. That is usually over a number of years.
Three hundred million dollars is also being requested for the Fixed-Wing Search and Rescue Aircraft Replacement Project. Sixteen new sensory equipped aircraft will be acquired to replace the search and rescue fleets, a CC-115 Buffalo and CC-138 Hercules aircraft. The department’s website indicates that the total cost of this project will also exceed $1 billion.
The third project is also another $300 million project. It’s being requested for the Medium Support Vehicle System Project. New support vehicles will be required to transport troops, cargo and equipment and to perform unit-level and combat services. The department’s website indicates the total cost of this project will also exceed $1 billion.
The fourth project being funded this year is the Canadian Surface Combatant Project, which will provide 15 Canadian surface combatants constructed by Irving Shipbuilding. Two hundred and fifty million dollars is being requested in this bill for this project. The project will also cost an excess of $8 billion.
While these four major projects are being undertaken by the Department of National Defence, financial information has been difficult to obtain. Given the magnitude of the costs and the significance of these projects to Canada, more information should be available to parliamentarians.
At the last Finance Committee meeting with officials of the department, they committed to providing the dollar amount for each of the 17 major projects included in the defence policy for 2019-20. They also committed to providing the dollar amount included for each of the 17 major projects included in the 2019-20 estimates request.
Last month government announced it would spend $15 billion for new ships, including two more Arctic and offshore patrols ships to accompany the six Arctic and offshore patrol ships currently being constructed by Irving Shipbuilding.
Also promised are 16 multipurpose vessels to be constructed by Seaspan Shipyards. These capital projects will be discussed during future committee meetings.
Honourable senators, one general comment I would like to make relates to the committee’s study of 2019-20 Main Estimates which support the supply bill. The Main Estimates provide an overview of the spending plans of all of the government departments and many of its agencies. Many issues are raised during our committee meetings. As I mentioned previously, these issues carry forward into future years.
In closing, I thank Senator Bellemare for her second reading speech. I also thank the chair of our committee, Senator Mockler, Vice-chair Senator Pratte and Senator Day and all my colleagues for thoughtful and interesting questions. Thank you also to our clerk, Ms. Lemay, to our analysts Mr. Smith and Mr. Pu, and to all the staff who make our committee successful.
I look forward to our next supply bill which I expect will be forwarded during the next new parliamentary session. Thank you.